In today’s dynamic markets and environments, organizations and projects need risk management that creates numerous alternative paths to project success, making businesses less susceptible to “black swan” failure events that easily wipe out a single critical path(Perrow, 1984). Black swan events are qualitatively and quantitatively extreme, but they are inevitable in complex infrastructure, as is described in a Harvard Business Review article on business risk:
“[In] a world of tame randomness, around two-thirds of changes should fall within certain limits (the –1 and +1 standard deviations) and that variations in excess of seven standard deviations are practically impossible. However, this is inapplicable in real life, where movements can exceed 10, 20, or sometimes even 30 standard deviations. Risk managers should avoid using methods and measures connected to standard deviation, such as regression models, R-squares, and betas.” (Taleb et. al., 2009).
Project managers need to continuously think about risk and uncertainty. With the right methodologies, Knowledge Exchange platforms can enable a new “social/knowledge” approach to generation of probable/possible scenarios and planning stories, opening up a new way to socialize and prepare for threats and opportunities.