My good friend and former colleague at the University of Southampton, Professor Emeritus Chris Chapman, has written a new book, Enlightened Planning, published by Routledge on 10 July 2019. The publisher's information about the book is available here.
Many of you may be familiar with some of the important books Chris has written previously with Stephen Ward, another of my former colleagues at Southampton: Managing Project Risk and Uncertainty and How to Manage Project Opportunity and Risk (the updated and retitled 3rd edition of Project Risk Management Processes).
I was delighted to accept the invitation from Chris to write an endorsement for his new book.
Chris Chapman has written an important but challenging book. It is important because it addresses matters central to most organisations: how to make important decisions when confronted by significant uncertainty. I shall return to the challenges later.
This book describes two journeys. The first is the one we readers are invited to join, an intellectual exploration as concepts are developed from relatively simple matters through to ideas that seem deceptively simple at first but are embedded in a subtle matrix of nuance that requires profound understanding and interpretation. The second is Chris Chapman’s own journey along roughly the same route, but with many of the bumps and wrinkles smoothed out to make the lives of his readers easier. This second journey, interwoven through the first, provides the justification for the steps along the way. It explains the practical circumstances in which the main concepts were developed, with case studies from some of Chris’s large clients emphasising the significant practical value and the substantial benefits that can be obtained for modest investments of time and effort.
Here I must declare an interest. I joined Chris at the University of Southampton in 1978. With a background in operational research and mathematical modelling, an understanding of psychology and a fascination with decision-making, I was drawn quickly into risk management with Chris. Our first work together was with Acres, examining the reliability of an LNG facility proposed for the high Arctic, using software Chris had developed with BP and adapted by us for the specific reliability context, combined with semi-Markov analysis that seemed innovative at the time. We went on to work together on other large projects: hydroelectric developments in Alaska and northern Alberta, upstream oil and gas off Newfoundland and oil and gas pipeline transport in Alaska, some of which are described in this book. Although our paths have diverged geographically since then, and we often use slightly different words to describe similar things, the approaches I learned from Chris, and those we developed together, are still central to my own international risk management practice.
In particular, my risk management work has always had a strong focus on practical value, on how risk management can be used to support better decisions, with a clear recognition that analysis by itself is not sufficient. This is echoed strongly in this book: uncertainty must be analysed, but only so far as is necessary to add value and make a sound decision, one that can be explained and justified clearly to stakeholders. Enlightened planning, as described by Chris in this book, provides a window into how this might be achieved.
Some of the core concepts in this book that I still use regularly (albeit sometimes using different words) are risk efficiency and opportunity efficiency, diagrams like histogram and activity trees that explore and explain important uncertainties and their inter-relationships, graphs that demonstrate key sensitivities and their practical implications, and illustrations of the differences between options so decision makers can evaluate outcomes outside the constraints of simplistic one-dimensional metrics.
Another important concept that resonates strongly with me and my colleagues at Broadleaf is that developing an understanding of the structure of uncertainty is an unequivocally necessary precursor to quantification. We have seen far too many examples of quantitative models where understanding was clearly lacking and the outcomes were at best misleading, often technically incorrect and at worst fatally flawed.
A core concept that Chris develops is clarity efficiency. This reflects the notion that there should be a balance between the amount of effort that is devoted to exploring important decisions (with the context and uncertainty that surrounds them) and the understanding that is generated for those who must make those decisions. Making such trade-offs is a critical part of enlightened planning, just as it is of risk management as we practise it.
This brings me back to the challenging aspect of this book – you need to read it carefully and with close attention to detail to form the necessary understanding and to get the most from it. There is no ‘magic formula’ that you can extract and apply in a few minutes. The answer does not leap off the page, but must be absorbed as concepts are developed along the path described here. You must follow the path, without shortcuts, to gain the enlightenment that Chris offers. Your understanding will almost certainly be different in detail from Chris’s or mine, but the effort you apply will be well worthwhile.
Dr Dale F Cooper
Director, Broadleaf Capital International