Article
Can the “VUCA Meter” Augment the Traditional Project Risk
Identification Process? A Case Study
Thordur Vikingur Fridgeirsson *, Helgi Thor Ingason * , Svana Helen Björnsdottir and Agnes Yr Gunnarsdottir
Citation: Fridgeirsson, T.V.; Ingason,
H.T.; Björnsdottir, S.H.;
Gunnarsdottir, A.Y. Can the “VUCA
Meter” Augment the Traditional
Project Risk Identification Process? A
Case Study. Sustainability 2021, 13,
12769. https://doi.org/10.3390/
su132212769
Academic Editors: João Carlos de
Oliveira Matias and Paolo Renna
Received: 21 October 2021
Accepted: 16 November 2021
Published: 18 November 2021
Publisher’s Note: MDPI stays neutral
with regard to jurisdictional claims in
published maps and institutional affil-
iations.
Copyright: © 2021 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
School of Engineering, Reykjavik University, Menntavegur 1, 101 Reykjavik, Iceland; svanahb@ru.is (S.H.B.);
agnesyg1996@gmail.com (A.Y.G.)
* Correspondence: thordurv@ru.is (T.V.F.); helgithor@ru.is (H.T.I.)
Abstract:
In this rapidly changing and fast-growing world, sustainability is an important paradigm.
However, the constantly growing level of uncertainty leads to increased strain in decision making.
This results in a growing need for a more effective and extensive approach for identifying project risk
in particular events that are not easily detected but can have a severe impact, sometimes referred to
as Black Swans or “fat tail” events. The VUCA meter is a normative approach to identify project risk
by assessing in a structured way events that may be volatile, uncertain, complex, and ambiguous
and might contribute to the project risk. In this study, the VUCA meter is benchmarked against
a traditional risk identification process as recommended by PMI
®
. Firstly, two workshops, each
referring to the respective risk identification method, were conducted. Secondly, a Delphi survey
was run to investigate if the VUCA meter would capture Black Swan risk events that are bypassed by
the traditional risk identification approach. The results clearly indicate that the VUCA meter can be
developed to be a significant addition to the conventional risk identification process for large projects
that are at an early stage. The VUCA meter facilitates a discussion that gets people to think beyond
the traditional framework for identifying project risk factors. As a consequence, “fat tail” events, that
are not apprehended with the conventional technique, are captured by the VUCA meter.
Keywords: project management; risk management; risk identification; risk assessment; VUCA
1. Introduction
The Vadlaheiðargöng project is a 7.5 km mountain tunnel at the north coast of Iceland
connecting the city of Akureyri with Fnjoskadalur. The initial business model for the tunnel
project was presented in 2002. It was assumed that the construction and the operation of
the tunnel would be a private-public enterprise with high feasibility and limited technical
difficulties [
1
]. Road tolls would recover all costs within 20 years plus a macroeconomic
gain of 8% [
2
]. When market financing folded due to the international finance crisis in
2008, the arrangement was modified and the Icelandic government guaranteed a loan to
make the construction possible. When the construction commenced, the Vadlaheiðargöng
project soon hit some serious unforeseen problems. In the beginning of 2014, a major hot
water leak, due to unexpected geothermal activity in the mountain, was detected making
drilling impossible due to heat and steam. To be able to proceed, the contractor had to
move the equipment to the other side of the mountain and continue drilling from there.
Unfortunately, in April 2015, a major unexpected cold water leak was discovered on the
new drilling site. The water completely floated the tunnel causing serious problems. A
famous news clip from this period shows a TV reporter rowing a boat inside the tunnel to
investigate the conditions. The tunnel was scheduled to be ready for traffic in 2016 (the
initial plan assumed 2011). However, it was only operative in December 2018, more than
two years later than planned [
1
]. The cost overrun in 2017 was estimated at 44%. However,
it should be noted that in the presented cost overrun number, the cost of finance was not
included and the real total cost overrun is thus much higher [
3
]. In July 2019, it was noted
Sustainability 2021, 13, 12769. https://doi.org/10.3390/su132212769 https://www.mdpi.com/journal/sustainability
