Systemic risk assessment: a case study

Project Risk Registers have been used extensively for many years. However, they do not account for the interaction between risks, for example, the occurrence of one risk exacerbating other risks or portfolios of risks being more significant than the sum of the individual risks. This leads to the need to consider ‘risk systemicity’ as a part of risk analysis. This paper reports on a specific case for a large multinational project based organization, one that the authors had been involved with in the analysis of a number of projects that had massive cost overruns. Following these analyses the organization was persuaded of the importance of risk systemicity. The organization therefore engaged the authors to develop a ‘Risk Filter’. This filter is a tool for identifying areas of risk exposure on future projects and creating a framework for their investigation. The ‘Risk Filter’ is now used on all projects ever since its introduction; by the end of May 2003 it had been used by nine divisions, on over 60 major projects, and completed by 450 respondents. It is also used at several stages during the life of a project to aid in the risk assessment and management of each project, and contributes to a project database.

[1]  Kenneth H. Rose,et al.  Book Review: A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fourth Edition , 2001 .

[2]  D. Sterman,et al.  Misperceptions of Feedback in a Dynamic Decision Making Experiment , 1989 .

[3]  Terry Williams,et al.  Risk-management infrastructures , 1993 .

[4]  J. U. M. Smith,et al.  Project Risk Management: Processes, Techniques and Insights , 1998, J. Oper. Res. Soc..

[5]  Robert Fildes.  Scenarios: The Art of Strategic Conversation , 1998, J. Oper. Res. Soc..

[6]  N. Dalkey,et al.  An Experimental Application of the Delphi Method to the Use of Experts , 1963 .

[7]  R. Stake.  The art of case study research , 1995 .

[8]  Michael Pidd,et al.  Systems Modelling: Theory and Practice , 2004 .

[9]  Colin Eden,et al.  Coping with strategic risk , 2001 .

[10]  Fran Ackermann,et al.  Learning from project failure , 2004 .

[11]  Kenneth G. Cooper.  System Dynamics Methods in Complex Project Management , 1997 .

[12]  J. Walsh.  Managerial and Organizational Cognition: Notes from a Trip Down Memory Lane , 1995 .

[13]  C. Eden,et al.  Analysing and comparing idiographic causal maps , 1998 .

[14]  D. Hillson.  Effective Opportunity Management for Projects: Exploiting Positive Risk , 2003 .

[15]  Colin Eden,et al.  Preface: Managerial and Organizational Cognition , 2009 .

[16]  Fran Ackermann,et al.  Modeling for Litigation: Mixing Qualitative and Quantitative Approaches , 1997 .

[17]  Herman Steyn,et al.  Knowledge management in project environments , 2005 .

[18]  Karlos Artto,et al.  Managing Risks in Projects , 1998 .

[19]  J. K. Hull.  Application of risk analysis techniques in proposal assessment , 1990 .

[20]  M. Oakes.  Statistical Inference: A Commentary for the Social and Behavioural Sciences , 1986 .

[21]  J. Bryson,et al.  Visible Thinking: Unlocking Causal Mapping for Practical Business Results , 2004 .

[22]  Fran Ackermann,et al.  The role of feedback dynamics in disruption and delay on the nature of disruption and delay (D&D) in major projects , 2000, J. Oper. Res. Soc..

[23]  Lutz E. Schlange.  Scenarios: The art of strategic conversation , 1997 .

[24]  C. Eden,et al.  The Amoebic Growth of Project Costs , 2005 .

[25]  Colin Eden,et al.  Contrasting Single User and Networked Group Decision Support Systems for Strategy Making , 2001 .