Influence Diagram PMP Significance & Exam Preparation

From my experience as a project manager for over 10 years and a PMP-certified practitioner, I can attest to the fact that the understanding of influence diagrams can change the entire project management approach and improve how one performs on the project management exam. I struggled to understand the relevance of influence diagrams in my first attempt at my PMP exam. The more advanced tools of project management have certainly changed over the years, but the influence diagram is one of the most useful tools in the influence diagram toolbox.

In this article, I have prepared all of the details that you will need while studying for the exams and even for practicing the project manager role later on.
 

Compared to standard flowcharts that show sequence, these are designed to assist managers in understanding all of the variables that exist in a project and what impact they each have throughout the entire duration of the project. As the term suggests, influence diagrams model the relationship between variables including the decisions of the manager, uncertainties of the business, and the set goals for the specific project.

The first time I came across influence diagrams, it was their combination of superb simplicity and depth functionality that struck me. Influence diagrams in project management help us form visual models that explain relationships of different parts with varying levels of complexity. They are very helpful when it comes to uncertainty - an aspect that we as project managers deal with on a day to day basis.

The influence diagram in PMP context underwent a lot of shifts over the years. Originally constructed in the 1970s as decision making aids, they have now become part of the PMBOK® Guide and the PMP exam system. Strengths of these diagrams in comparison to other visual representation aids is that they focus on relationships.

Some key aspects of an influence diagram include:

• Decision nodes (typically shown as rectangles): Choices that need to be made by a project manager
• Chance nodes (typically shown as ovals): Uncertainties or random variables
• Value nodes (typically shown as diamonds): Goals or outcomes
• Arrows: Relationships and influences of nodes on one other

To illustrate, when launching a new software product, you could create an influence diagram that depicts how various marketing budget decisions (which is a decision node) impact potential market awareness (which is a chance node) and, consequently, sales revenue (which is a value node).

To get straight to the point of what I suspect some of you want to know: how crucial are influence diagrams for the PMP exam? From what I have heard and in those conversations I've had with other recent candidates, it is safe to say that in regard to the influence diagrams for the PMP examination, they appear in somewhere between 5 and 8 percent of the questions on the exam. And that is quite a lot.

The Project Management Institute (PMI) usually assesses your grasp of influence diagrams in the following ways:

• Through straightforward questions about their parts and arrangement.
• Through questions embedded in a context where you must determine the most suitable application for the influence diagram.
• Through questions that require analyzing the provided materials to draw conclusions and extract information from the influence diagram.
• Through questions that check your understanding of the relationship between influence diagrams and other processes in project management.

Do keep in mind that the questions on the PMP exam are presented in context rather than with definitions. This means you must know what an influence diagram is and when and how to use it in multiple project situations. Most candidates struggle with this knowledge of practical application.

Learning how to create influence diagrams will improve your chances of passing the PMP exam and will help you become a better project manager. In this article, I will share my approach to creating effective influence diagrams.

Step 1: Identify the Decision Nodes

List down all the major decisions which, in your opinion, need to be made in your project. This list may include, but is not limited to, the following items:

• Outsourcing of certain activities
• Vendor selection
• How to allocate scarce resources
• Schedule yardsticks baselining

Step 2: Identify and Map the Uncertainties

Now list the factors that are uncertain which can potentially affect your project. Including but not limited to the following:

• Market environment
• Technical difficulties
• Availability of resources
• Responses of stakeholders
• Dependencies external to the organization

Step 3: Define Value Nodes

List down the project objectives which, in your opinion, are going to be the end results for their best practical achievement. These objectives may include:

• Completion of project within estimated spending
• Meeting customer expectations
• Quality achieved
• Taking advantage of the business value

Step 4: Draw the Relationships between the nodes

This stage is where the power of the influence diagram starts to show the most effectiveness. Draw directionally marked connecting lines and directional arrows to the most important nodes:

• Relations between arrows from decision nodes which describes chance nodes illustrates how decisions 'impact' level of uncertainty.
• Relations between arrows from chance nodes depicting to value nodes describes 'uncertainties election' outcomes decisions depend on.
• Relations between arrows showing chance nodes depict interdependence of and uncertainties umlaut each other.
• Without a doubt, defining arrow direction is critical as turns "must" indicate flow of influence

When I observe the project managers create misleading diagrams, their influence diagrams do nothing but mislead the users to make poor decisions.
 

It is particularly important for project managers studying for the PMP exam to understand how influence diagrams rank among other tools designed for other decision-making processes. To illustrate, here's a comprehensive comparison table.

Always remember that an influence diagram is perfect within project management systems when you need to get an idea of the complex relationships, whereas decision trees offer better utility for sequential decision making.

The multidisciplinary aptitude of the influence diagram in the context of PMP has always been acknowledged from one edition of the PMBOK® Guide to another. Currently, influence diagrams are focused on in more detail in the following areas of knowledge:

• Project Risk Management: For identifying and analyzing the connections between risks and their possible impacts.
• Project Integration Management: For analyzing how different decisions affect the project.
• Project Stakeholder Management: For showing the influence and relationships of the stakeholders.

What draws my attention is the manner in which the treatment of this influence diagram has changed throughout the different editions of PMBOK. More recent editions seem to apply them for a broader context for broader decision making.

Some of these connections include:

• Identify Risks: Influence diagrams aid in envisioning the possible relationships between risks.
• Perform Quantitative Risk Analysis: Influence diagrams aid in organizing in probabilistic estimation.
• Plan Risk Responses: Influence diagrams help analyze the effect various response strategies will have on the situation.
• Develop Project Management Plan: Influence diagrams are useful in demonstrating how various components of the plans will influence one another.

While studying, note this observation in particular: the benefit that the influence diagram brings to the candidates seeking for PMP is that it provides means to visualize complex relationships that are hard to fathom in the context of projects.
 

After mentoring numerous PMP candidates, I have set for myself these five pointers on mastering influence diagrams for PMP examination:

Tip #1: Pay Attention and Identify Influence Diagram Related Concepts in Examination Questions

Even though questions may not have the term influence diagram, they might be testing the underlying concepts. Pay attention to: "influences between project elements," "relationship between decisions and outcomes," or "uncertainties concerning project objectives." These phrases indicate the question is geared toward testing influence diagram understanding.

Tip #2: Try to Construct Influences Diagrams with Simple Building Blocks Under Timed Conditions

You need to be swift in your analysis of influence diagram questions. Train yourself by taking 2 to 3 minutes and try to sketch simple influence diagrams based on different scenarios. With time, your mind will learn to quickly structure relations between project components.

Tip #3: Learn The Relationship Between Influence Diagrams and Risk Management

The influence diagram process for the Project Management Professional (PMP) Certification is often closely related with risk management processes. Make sure to analyze how influence diagrams assist in both qualitative and quantitative risk assessments.

Tip #4: Analyze the Support Influence Diagrams Offer Towards Decision Making

Go beyond just making the diagrams and consider the decision-making processes influenced by them. Use influence diagrams that have already been completed and determine the impacts of certain decisions to the anticipated results.
 

Understanding Influence Diagrams throughout a project management career stretches far beyond the realm of examinations. As it is directly related to systems thinking, fusing multiple domains together in logic using reason.

In Traditional Project Management / The Waterfall Approach

Influence Diagrams in traditional project management assist with:

• Launching during the planning phase
• Identifying dependencies drown out of work packages
• Identifying scope risks
• Visualizing how scope changes control schedule and budget

Exam Tip: In the project preparation phase, focus your attention on WBS, and dependency and risk identification questions which put Influence Diagrams in the mix with WBS.

Influence Diagrams in Agile / Scrum Environments

These frameworks force for more active and constant alteration making influence diagrams far more volatile and agile to turn adapt:

• Concerning uncertainty and decision making focus geared towards sprints
• Backlog items are prioritized depending on their value affects on the final delivery
• Continuous risk assessment

Exam Tip: In participants strive for ease in questions during refinement sprit planning or enhancing the product backlog.

Hybrid Models

In hybrid approaches, influence diagrams are used to connect traditional and agile elements by:

• Enabling teams to understand how decisions made in one methodology affect other methodologies.
• Enabling integrated risk management at different levels of a project.
• Enabling various strategic communication with team members from different methodologies.

Important note for PMP exam preparation: Be on the lookout for case study questions wherein influence diagrams were used to assist in the coordination of activities amongst teams utilizing various methodologies.

Current PMP exams contain elements from all these methods, so be ready to use concepts of influence diagrams in different contexts. Being able to explain the influence diagram in PMP across the various interlaced boundaries will help you greatly.

To aid in mastering influence diagram concepts in PMP, these are the recommended tools and resources:

Software Tools

• Microsoft Visio: Comes with pre-made templates for constructing influence diagrams
• Lucidchart: Possesses very good online diagramming tools with influence diagram shapes
• draw.io: Decent effect for use with free software that aids in the construction of influence diagrams
• yEd Graph Editor: Best known for building complex influence diagrams with numerous nodes

Study Resources

• PMI's Practice Standard for Project Risk Management: Features comprehensive content on the use of and influence diagrams in risk analysis
• Decision Analysis for the Professional by Peter McNamee and John
• Celona: Great treatment of influence diagrams
• PMP Exam Prep by Rita Mulcahy: Has practice questions pertaining to influence diagrams
• PM PrepCast: Offers a simulator containing questions designed to assess understanding of influence diagrams

So, the last section of the work is focused on these other tools.

• Establish a study group concentrating on decision tools: Each member builds and critiques influence diagrams for different scenarios of the same project.
• Construct a library of influence diagrams: Create a set of diagrams for various project types and situations in order to recognize patterns more easily.
• Reverse-engineering of outcomes: Work with the end-results of a project and identify what influences are there in the project, then work your way up towards the objective.
• Practice analyzing the same scenario using both influence diagrams and decision trees. This will help you understand the applications of both tools while comparing them to one another.

Keep in mind that we want to cultivate the ability to create and interpret influence diagrams on projects as opposed to simply memorizing what influence diagrams are.
 

Apart from passing examinations, the mastery of influence diagrams has several advantages for practitioners of project management. These include:

Decisions made with an influence diagram are more effective

In my case, influence diagrams have fundamentally changed the way I approach decisions with more than one underlying layer of complexity. Knowing how A affects B enables me to understand how classes of decisions can direct outcomes. Having a visual representation of all the options available to me means that I can focus on the variable with the most leverage.

Enhanced Communication with Stakeholders

Combining influence diagrams for stakeholder communication is one of the most beneficial diagram applications I have come across. An influence diagram is useful when describing complex project interdependencies to team members or even executives. It simplifies everything for you.

Enhanced Risk Management

The use of influence diagrams in relation to risk management is equally important. Understanding how certain project risks interrelate to one another and objectives makes a project easier to manage, as opposed to listing risks without considering their relationships and dependencies. Influence diagrams provide a lot of value in the way they organize information.

Development of Systems Thinking

The most remarkable benefit of influence diagrams is the development of a person's systems thinking abilities. A collection of tasks associated with a project will transform into an intricate network of interrelated components making up that particular project. You will understand that a project is more than just a collection of discrete tasks.

One of my mentees summarized it brilliantly after learning to work with influence diagrams:

"I used to play checkers with my projects, one move at a time. Now I'm playing chess and thinking several moves ahead, understanding how each piece affects the entire board."
 

In this extensive guide, we highlighted the importance of influence diagrams for preparing for the PMP examination and for practicing professionally.

Don't forget to consider the points stated above:

• For any influences diagrams on decisions, uncertainties, and objectives, the relationships formed by these elements can be visualized, and these relationships can be better explained and understood in the form of diagrams.
• Rather than sequential decisions, they pay attention to relationships.
• The PMP examination evaluates your grasp of influence diagrams along with requisite structural competencies and application skills across varying contexts.
• Not only does your performance on the examination improve with mastering influence diagrams, your overall project management proficiency does as well.

In any case, with your continued preparation towards the PMP certification, I suggest that you try to develop influence diagrams for different project situations. Every diagram that you construct adds to your understanding while enhancing your systems thinking skills.