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Risk management - marching army impacts when multiple critical paths

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Paul Cornfield PM II| Airbus Defence And Space Welwyn Garden City, United Kingdom
I run a large, high risk project and there are several major risks outstanding. The direct impact of each is a relatively small cost, but we are supporting a large team and there are damages linked to delivery dates. The consequential impact of delays is very significant. Risks that occur off the critical path will therefore have a relatively low impact, where those that do impact the critical path will have a very high impact.
We run a Monte-Carlo Schedule Risk Analysis method to estimate the programme schedule which gives a good estimate on the total programme schedule risk exposure, against which I can estimate the marching army risk exposure. However, I cannot see an easy method to build this into the risk register, and therefore scale, manage and report on the individual risks appropriately.
All risk management courses I've reviewed only consider the risks individually, assuming their impacts are independent. Does anyone know a method to risk management in this scenario where there is inter-dependency between the risks?
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Danny PMP, PgMP
Community Champion
Senior Consultant Tokyo, Japan

While I haven’t used Monte Carlo simulations before, in addition to the risk register and Monte Carlo simulation, consider managing interdependent risks in a complex project by creating a Risk Dependencies Matrix to track how risks affect each other, particularly those on the critical path. Additionally, use Key Risk Indicators (KRIs) to monitor trigger points that signal when risks are likely to materialize. Finally, build a risk dashboard to visualize and report on the interdependent risks and their potential impact on project delivery.

I also found this article below, which might be useful for you. I suggest you reach out to the researchers if needed:

Monte Carlo Dependency Estimation
1810.02112 (arxiv.org)
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Paul -

This is a great question! What I've done in the past is in parallel with the independent coverage of risks within the register is to have a risk network diagram which shows the relationships between different risk events. You can also show the potential "perfect storm" scenarios around key milestones if there are a set of specific risks which come together to impact that milestone using something like MS Project's timeline view.

The key is to ensure that the information presented to stakeholders (primarily risk response owners) matters to them sufficiently for them to actually take action.

Kiron
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Keith Novak Tukwila, Wa, United States
I don't know of an easy way but what you describe is very common when it comes to safety related risks. Combinations of risks can be added to your risk register as their own discrete risks such as If A and B (or A and not B) then... The most common example is redundancy where you have a primary system and a backup and both failing is a different scenario than just one.

Having a network diagram or defining that sort of deterministic logic is helpful but but you can also go through the tedious process of assessing combinations of risks and whether they create a unique situation.

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