Systemic Issues In Risk Management In Projects – Why The AS/NZS 4360 Approach Is Not Enough

A systems thinking approach to risk analysis in projects can provide new insight into project management performance, project management maturity and the underlying sources of project risk. To demonstrate this we need to move outside the usual AS/NZS 4360 risk paradigm, and apply a systems thinking approach to risk identification, assessment and treatment. When we do this from first principles, the first outcome of interest is that we identify a much wider range of non-trivial risks than we typically see in an AS/NZS 4360 risk register, or in risk reports to management. The additional risks often arise from the performance of people, internal politics, unwritten rules and other sensitive or “unspeakable ” issues. Since these issues can make or break a project, their absence from risks registers and risk reporting systems, although understandable, means that the AS/NZS 4360 risk processes are ineffective. Applying a systems approach to the assessment of risks is also necessary, if we are to gain a rich insight into the root causes of risk in large, complicated projects. This is analogous to using the “six whys – why, why, why ….. ” approach to get to causes – but using more powerful techniques such as cognitive mapping and other systems tools, to gain insight into the relationships, time-delays and feedback often involved