4 Steps to Control Risk

If you feel like calling the fire department to extinguish the issues that constantly flare up on your jobs it’s time to take a minute and assess why the risk is so high. Risk Management is a real part of project management and in the world of construction one unattended issue can quickly grow from an ember to a wildfire.

While insurance exists to help insulate you from risks below are a few steps to help you douse risks before they threaten your project …

1.Identification. Risks pop up all over the project and the first step is to immediately and correctly identify and document the risk. Risks typically start as small little issues that may not seem dangerous. Having a process in place that allows for your team to easily identify issues and document their details is critical to providing transparency to the project team that something is occurring.

2. Evaluation. Once the issue has been documented it’s up to you to evaluate how big of a risk this issue possess at this time. Since risks usually show up all at once it’s important that your process allows for your team to quickly evaluate the level of impact this issue will have on your project. Research and homework must be done to provide a comprehensive understanding of the issue and the risk it possesses so that informed decisions can be made.

3. Resolution. Once the issue has been identified and the risk evaluated it is time to execute the resolution plan. This works the same for both positive and negative risks. Resolution is the project team’s decision on what to do with the identified risk. Common options are:

  • Avoid the risk. For example, reject the questionable material that arrived on site.
  • Transfer the risk. This is exactly what insurance is for.
  • Mitigate the risk. Enforce processes or policies to minimize the impact the risk has on the project.
  • Accept the risk. Weather delays are a good example, there’s no choice but to accept that weather will wash out a day of your schedule but a good project manager will have a plan to lessen the impact.

4. Communication. The final step is to ensure that everyone on the team is in the loop on what caused the issue to occur, how it will be handled and what to do moving forward to prevent similar issues from showing up. Having a tool, like FACS, that has a detailed Issue tracking module allows your project team to easily identify risks as they occur, provides a framework to evaluate and rank issues by highest risk, generate a resolution plan and communicate the decision with the whole team. This way, the next time an issue is identified or observed by the project team, they will be easily able to access historical data and won’t have to start from scratch.