This is the best definition of risk I have ever come across:

Risk provides us with opportunities while exposing us to outcomes that we may not desire

Diversity Dashboard

Risks are not simply negative outcomes – bad things that may occur – risks are also positive outcomes – good things that may occur.

Risks are inherent in business and particularly in the construction sector.

Research has identified these factors on construction projects which create uncertainty:

  • each design is unique – risks relate to design errors, process, changes to designs and failure to carry those designs out
  • there are many external influences such as weather, pandemics, global supply chains, political issues (Brexit), community objections, regulators and stakeholders
  • each site is unique – there may be environmental, archaelogical or other unknowns under the soil or in buildings to be demolished
  • there are many members in the project team who need to be organised for short or long periods, interacting with each other, ensuring materials are on site when needed as well as many risks to their healthy, safety and wellbeing
  • each project takes months (or years) – so the many tasks need to be carefully managed, coordinated and integrated
  • property laws are complex with issues such as access, rights of way, rights to light, nuisance, trespass, party walls and crane oversailing to be negotiated
  • each product is unique – risks relate to technology, cost, quality of materials etc.

We recognise that construction is uncertain and our contracts include early or advance warning processes and change mechanisms to allow the parties to be flexible and change the project objectives based on new factors, knowledge and events.

Construction can also be volatile – many projects depend on a stable geo-political landscape. Construction can be complex – huge infrastructure projects like High Speed 2 in the UK take decades to complete. Construction can also be ambiguous because decisions and objectives need to be continually adapted to meet new circumstances.

What should you do?

Make sure you consider positive, neutral and negative impacts on your project when identifying risks. Don’t fall down the trap of assuming risks are the same as hazards or just things that will cost you more money, take more time or affect the quality of the finished product.

Embrace the VUCA nature of construction with great project management tools or processes to ensure the debate doesn’t end when the first sod on site is cut.

Risk data from Risk Management in Construction, 2012. The Diversity Dashboard by Dr Deborah Swallow and Eilidh Milnes (2013) considers cross-cultural issues, many of which will impact whether your contract is effective for managing the project team and achieving success.

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