![]() ![]() “And if you improve the performance of your subcontractors-they will goon and deliver that improved performance on their next jobs too.” Risk is Allied to Opportunity “Show the rest of the industry how it’s done,” Whiting said. They can also exploit opportunities and be part of overall industry improvement. When companies not only ensure they comply but actually go beyond compliance by managing project risks, they can reduce associated commercial stress. He believes regulations around safety, quality, and compliance exist to “keep free enterprise fair” by ensuring those who do the right thing are not at a disadvantage compared to those who cut corners. “In the short-term, if a business doesn’t follow regulations, they can save some money, but they can then suffer a much larger penalty down the track.” “At the end of the day, there is only one way to succeed-doing a job well in all its aspects,” Whiting said. Whiting said this is avoidable, and managing project risks like these can benefit the whole industry. Recent years have seen an increased emphasis on risks associated with non-compliant products and non-compliant work. “Risk management as a discipline is becoming far more prevalent for the success of projects, programmes and indeed the construction industry.” Regulatory Risk is Not a Bad Thing “Risk management as a discipline is becoming far more prevalent for the success of projects.”Īccording to RICS, the success of construction projects can be gauged on the “ability of the professional team to mitigate threats and maximise opportunities in relation to the overall objectives of the project.” However, as the Royal Institute of Chartered Surveyors (RICS) noted in its Guidance Note, Management of Risk, the further a project advances through the lifecycle, the harder it becomes to make changes that can mitigate, manage or avoid them. Risks exist at every stage of the project lifecycle, from design through to commissioning and handover. McKinsey and Co in a recent report on supply chain risk outlined four main risk types: “manageable surprises,” which are hard to predict but manageable like supplier bankruptcy “brewing storms” which will have a high impact but can be predicted beforehand, such as regulatory changes “business challenges” which are low-impact and can be managed easily and, “black swan events” which are hard to anticipate and have severe impacts, such as the COVID-19 pandemic. The construction risk manager acts as a champion to improve processes and approaches, leading the company to new ideas and improved overall business management. What’s more, in many companies, there is often a construction risk manager, an individual hired especially for risk management. ![]() Safety and managing project risks are something Whiting believes any competent person can do. “Construction risks, in addition to occupational health and safety, are complicated by dynamic, ever-changing conditions that create daily risks to contractual and legal obligations, productivity, schedule, budget overruns, assets, environment and reputation,” Whiting added. They get distracted, or even ignore, other crucial risks and opportunities,” Whiting said. “Individuals and organisations often become engrossed in immediate risk exposures and their effects, such as COVID-19. They don’t always receive as much attention because they don’t always seem as urgent, according to Jim Whiting, construction risk manager and Director of Soteris. Managing workplace health and contractor risks is fundamental in construction, still many other kinds of risks can compromise projects, profits, and reputations. Building anything involves managing project risks-and while the spotlight recently has been on health and safety, particularly in relation to COVID-19, there are many other areas of the project management construction process where a good construction risk management plan can save you time, money and heartache.
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