Complexity and Risk Management

Introduction

New approaches to risk management are emerging in response to increasingly large and complex project environments and systems with unpredictable risks.

These include the application of complexity sciences to help organisations understand how complexity influences risk management.

What is complexity?

As complexity means different things to different people, there is no universally accepted definition, and within a single operating environment, a mix of simple and complex elements can exist.

The formal study of complex phenomena is known as complexity science and includes a broad range of disciplines, such as chaos theory, systems thinking, resilience theory, network theory, social theory, and computational theory.

Application of the complexity sciences has attracted interest from several fields including risk engineers, managers and practitioners due to their potential to improve the control of complex operating environments and related challenges such as risk and project management.

What is a complex system?

A complex system is an entity comprised of a large number of highly energised and interconnected contributing parts. In nature, some examples of complex systems are the weather and rainforests.

The human world has also produced complex systems, including social structures such as political systems and economies, as well as large organisations, global communications networks, cities, and major projects.

As the systems constructed by humans become more complex, risk engineers and other professions are striving to learn from natural complex systems in order to better understand the behaviour and challenges of human complex systems.

Sources:

The content on this page was primarily sourced from:

• Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus

• Webinar titled ‘An Introduction to Complexity and How it Influences Risk Management’, Session 1', delivered to REBOK community on 30 April 2019 by Warren Black, Principal and Founder, Complexus and Geoff Hurst, Principal, ENGENEOHS

Further Reading

• James Gleick, Chaos: Making a New Science
• John H Holland, Complexity: A Very Short Introduction
• Neil Johnsson, Simply Complexity.