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Risk Doctor Briefing: Managing Risk in Complex Projects

SERIES ARTICLE

Dr David Hillson FIRM, HonFAPM, PMI Fellow

The Risk Doctor 

UK
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Some people say that complex projects are not the same as other “ordinary” projects, and so they need to be managed differently. When we consider the risk angle, there are three questions to answer:

  1. Are complex projects inherently different from other projects? Complexity is a continuous variable, so it might be hard to tell if a particular project is complex or not. Complexity is not just a function of scale – a project can be large but simple, or small and complex. Instead complexity arises from the structure of the project and the way its elements relate together. It involves unpredictability, where it is not always clear how a change in one part might influence other parts. It is usually hard to see how variations in input might affect the overall output for a complex project, due to the number of interconnections and dependencies within project elements. The behaviour of complex projects is often ambiguous, which means that complex projects are always risky.
  2. Are complex projects exposed to different types of risk? Complex projects are subject to the same sorts of risk that are found in any project. However the unpredictable nature of complex projects also results in particular types of unforeseeable risk. These have various names: they are sometimes known as unknown-unknowns, or Black Swans, or ontological risks, or emergent risks. These risks are hard to identify in advance and difficult to assess accurately, and the standard risk response strategies are often not effective in treating them.
  3. Do these types of risk require managing differently? The fact that some risks are unpredictable means that we cannot use the normal proactive risk process to prepare for them, because we cannot see them coming. Instead we need to develop an approach that will be effective in addressing emergent risks in complex projects. Two key strategies will help when unforeseen risks emerge: 

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About the Author

Dr. David HillsonDr. David Hillson 

The Risk Doctor 

Dr David Hillson CMgr FRSA FIRM FCMI HonFAPM PMI-Fellow is The Risk Doctor (www.risk-doctor.com).  As an international risk consultant, David is recognised as a leading thinker and expert practitioner in risk management. He consults, writes and speaks widely on the topic and he has made several innovative contributions to the field. David’s motto is “Understand profoundly so you can explain simply”, ensuring that his work represents both sound thinking and practical application.

David Hillson has over 25 years’ experience in risk consulting and he has worked in more than 40 countries, providing support to clients in every major industry sector, including construction, mining, telecommunications, pharmaceutical, financial services, transport, fast-moving consumer goods, energy, IT, defence and government. David’s input includes strategic direction to organisations facing major risk challenges, as well as tactical advice on achieving value and competitive advantage from effectively managing risk.

David’s contributions to the risk discipline over many years have been recognised by a range of awards, including “Risk Personality of the Year” in 2010-11. He received both the PMI Fellow award and the PMI Distinguished Contribution Award from the Project Management Institute (PMI®) for his work in developing risk management. He is also an Honorary Fellow of the UK Association for Project Management (APM), where he has actively led risk developments for nearly 20 years.  David Hillson is an active Fellow of the Institute of Risk Management (IRM), and he was elected a Fellow of the Royal Society of Arts (RSA) to contribute to its Risk Commission. He is also a Chartered Fellow of the Chartered Management Institute (CMI) and a Member of the Institute of Directors (IOD).

Dr Hillson can be contacted at [email protected].