The VUCAlity of Projects: A New Approach to Assess a Project Risk in a Complex World

Thordur Vikingur Fridgeirsson, Helgi Thor Ingason, Haukur Ingi Jonasson and Bara Hlin Kristjansdottir
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Thordur Vikingur Fridgeirsson: School of Technology, Reykjavík University, 102 Reykjavik, Iceland
Helgi Thor Ingason: School of Technology, Reykjavík University, 102 Reykjavik, Iceland
Haukur Ingi Jonasson: School of Technology, Reykjavík University, 102 Reykjavik, Iceland
Bara Hlin Kristjansdottir: School of Technology, Reykjavík University, 102 Reykjavik, Iceland

Sustainability, 2021, vol. 13, issue 7, 1-13

Abstract: The “projectification” of Western societies has been consolidated by a number of studies and now calls for various adaptations in the managerial framework of project management. Faster rates of change in complex environments antagonize the traditional risk assessment approach and demand a more dynamic approach. A framework commonly used for understanding the challenges of complexity in the modern business environment is VUCA. VUCA stands for volatility, uncertainty, complexity, and ambiguity. In order to mitigate the impact of a VUCA environment on complex projects, organizations and project leaders need to know the type and severity of challenges they are dealing with in each unique project. This study explores the VUCA framework in the context of projects and suggests that the VUCA approach can enhance the conventional risk assessment procedure. The study also drafts an accessible diagnostic tool to assess the VUCA dimensions a project is facing, so that project managers can effectively isolate “fat tail” risk events. The tool is tested on five complex projects in the manufacturing industry and its effectiveness is discussed.

Keywords: project preparation; decisions; risk assessment; risk management; VUCA (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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