FEATURED PAPER
By Pascal Bohulu Mabelo
South Africa
Abstract
Organisations involved in “risky” initiatives should implement risk treatments to reduce residual risks to levels acceptable to relevant stakeholders and ensure efficiency and effectiveness—to protect the organisation (or project) from potential losses or threats to its continued operations. Both the PMBoK (on Project Management) and ISO 31000 (on Risk Management) concur that Project Risk Management (PRM) should aim at increasing the “likelihood of success” in projects.
Like in the “Five Chinese Brothers” story (Appendix A) where the brothers work together to defeat justice, five inadvertences bedevil Project Risk Management. Though they do not necessarily work in the same order as the Five Chinese Brothers, they do a disservice to project delivery, mostly in Large Infrastructure Projects. Whereas the Chinese Brothers used each one’s special aptitude to escape an execution sentence, these insidious “Five Foes” have so obstructed risk management efforts that PRM’s significance and utility are increasingly questioned by executive management. No wonder, less and less attention and resources are devoted to its proper implementation in LIPs.
To the concerns raised in three previous articles (Mabelo, 2023a; Mabelo, 2023b; Mabelo, 2024) the author now adds two other issues that plague PRM and the delivery of Large Infrastructure Projects. Thus, five (three plus two) inadvertences in conventional PRM are unveiled as follows:
- Ignoring “project life cycle” in PRM
- Ignoring the project-specific context
- Employing the PRM intermittently
- Throwing money at treating risks
- Implementing the PRM in a silo
This paper essentially discusses these five flaws or inadvertences as the “Five Foes of Project Risk Management” that work insidiously to diminish the otherwise significant contributions of Risk Management in Large Infrastructure Projects (LIPs) and other industries—they bring woes!
Risk Management and Project Delivery
Organisations involved in “risky” initiatives such as large and complex projects should implement risk treatment measures. Projects inherently entail risks, stemming from their forward-looking nature encapsulated in the Latin word “projectum” (viz, that which is thrown ahead). Nobody can effectively (not to mention, accurately) predict the future in the current VUCA environment (i.e., Volatility/Vulnerability, Uncertainty, Complexity, Ambiguity). Therefore, the imperative of risk management, especially in Large Infrastructure Projects (LIPs), is to protect an organisation from potential losses or threats to its continued operation (Ang, 2023). Failure is not an option in LIPs.
Despite advances in the LIPs industry, Project Risk Management (PRM) is employed “merely as one of the many knowledge areas” of modern project management. However, the PMBoK (on Project Management) and ISO 31000 (on Risk Management) concur that the aim of Project Risk Management (PRM) should be none other than to increase the “likelihood of success” in projects:
- “The objectives of Project Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project.” (PMBoK, 2013)
- “Risk Management increases the likelihood of an organisation [e.g., project] performing as planned by [1] identifying and [2] managing barriers to meeting objectives in advance […]” (ISO 31000, 2018)
Owing to the VUCA nature of today’s infrastructure projects, it is no longer a matter of whether project outcomes might stray from objectives, but rather the extent and impact of those deviations. Despite this realisation, inadequate Project Risk Management remains a persistent factor of project failure in diverse organisational landscapes—and it is getting worse (Clancy, 2014; Nevine, 2015).
Chronic delays and cost overruns on recent multi-billion projects, locally and abroad, attest to the high prevalence and severity of the issue (Flyvbjerg et al., 2003; Nevine, 2015). A comparative review of the Chaos Report (Standish Group) from 1994 to 2009 reveals that there has been no major improvement in terms of project outcomes. Excluding the 1994 data of successful projects (16%), the remainder gives a standard deviation σ = 3.5%, suggesting no significant improvement has been recorded during that period. Any apparent reductions in failure rate between 1998 and 2002 could be attributed to a heightened focus on project delivery due to the 1997/1998 Financial Crisis.
Indeed, there was a surge in the rate of “challenged” projects over the same period (Mabelo, 2016). Interestingly, this sluggishness occurred between 1990 and 2010 while Earned Value, process-based methodologies, global certifications, and Agile practices were tenaciously promoted in the industry.
More…
To read entire paper, click here
Author’s note: An excerpt from this paper, titled, “Unveiling the Five Foes of Project Risk Management—Why Conventional PRM Fails in Large Infrastructure Projects,” was recently presented at the PMI South Africa Summit on July 4, 2024.
How to cite this paper: Mabelo, P. B. (2024). The Five Foes of Project Risk Management; featured paper, PM World Journal, Vol. XIII, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/06/pmwj143-Jul2024-Mabelo-The-Five-Foes-of-Project-Risk-Management-FINAL.pdf
About the Author
Pascal Bohulu Mabelo
Johannesburg, South Africa
Pascal Bohulu Mabelo, MBA, MSc (Industrial), BSc (Civil), Pr. Eng, Pr. CPM, Pr. PMSA, PMP, has more than 25 years of professional experience and possesses a wide range of technical and managerial skills on large and complex infrastructure projects. He has worked in large infrastructure projects as a design engineer, project/programme manager, project consultant and project management executive. Pascal was honoured to serve as the national chairman of Project Management South Africa (PMSA), the leading Project Management professional association in Southern Africa.
Pascal has published the book: “Managing Engineering Processes in Large Infrastructure Projects” (Cambridge, 2021); he has also published, “How to Manage Project Stakeholders—Effective Strategies for Large Infrastructure Projects” (Routledge, 2020) and “Operational Readiness—How to Achieve Successful System Deployment” (Routledge, 2020). Through various publications, journal articles, and conference presentations, he assiduously promotes the application of Systems Thinking and/or Systems Engineering principles, concepts, and practices to unravel complexity in Large Infrastructure Projects (LIPs) to address their persistent risks of failure and their massive, even pernicious, cost and schedule overruns.
His other papers can be viewed at https://pmworldlibrary.net/authors/pascal-bohulu-mabelo/
Pascal is currently a Director and Principal Consultant at E 6 Project Consulting or E6PC; for comments, further information, and clarifications he may be contacted at Consult@e6pc.com.
