5 Ways Companies Mismanage Capital Projects Risk

5 WaysCompaniesMismanageCapital ProjectsRiskA PERSPECTIVE

PRESENTED ON ENGINEERING NEWS-RECORD WEBINARSEPTEMBER 2016 | OLFA HAMDI

Any use of this material without specific permission of the author is strictly prohibited

This presentation is notabout "Best Practices"This presentation is meant to provide you with useful new ways of looking at theproject world that would help you make the right decisions to manage your projectrisks.Best project leaders are critical thinkers!

OLFA HAMDI - [email protected]

OverlookingControllable Risks

Preventable risks (your baseline) include:

Your technology

Your soil conditions

Your site utilities ; Your facility conditions

Your machinery and inventory

Weather conditions; Permitting

Known labor considerations

PREPARING FOR A CONTROLLABLE RISK IS NO LONGERRISK MANAGEMENT; IT'S DOING ONE'S JOB WELL!


1

Primarily Managing RiskRetrospectively

Lessons learned, as developed and stored at projects closeout, are not constant! What is true for one construction project may be counterproductive to another. Correlations are not constant. Is your team fighting the last war?

RECOGNIZE THE INCONVENIENT TRUTH THAT IT IS VERY DIFFICULT TO USE PASTDATA TO PREDICT THE FUTURE

2


Mechanically ManageProject Risks

Mistakes include reducing RM to a TemplateRequirement

Standardization failure Abandoned during execution Missed Opportunity For Critical Input to

Authorization GateMissed opportunity to tap into the value that comes

with risk

RISK MANAGEMENT SHOULD BE A PRACTICALEXERCISE


3

Not Managing Risk in Real-Time

Project managers are responsible for making sure that their company takes only therisks that it wants to take. Failing to first understand overall shared risks and monitorand manage risks in real time on both sides of the contract increases the chancesthat the relationship loses its drivers; thus, negatively affecting the project.

CONSTRUCTION RISK MANAGEMENT IS A DYNAMIC PROCESS.

4


Focusing on Process,Not Decisions

Smart asset intensive companies work to

improve project employees’ ability to incorporate

appropriate levels of risk when making choices.

How to cope quickly with uncertainty, rather than the

uncertainty itself, becomes the priority

How to turn negative into positive is recognized to

be a formal critical soft skill across the organization

RISK MANAGEMENT IS ABOUT PEOPLE, BECAUSEPEOPLE MAKE THE DECISIONS!


5

The future of risk management forcapital projects is in creating new ways

to continuously EXPERIENCEmaking risk factored decisions


"IF THE RISK IS BIG, WE HAVETO EXPERIENCE IT FIRST"

Project Execution RiskSimulation Room™

Focus on people, decisions and consequences

A shift in the cultural view of risk management : transitioning from the problem-

solving mode to the opportunity development mode

Active learning with real execution management, negotiation and claims cases

Embedded into the organization

Grounded in systems thinking theory and IDR

EXPERIENCING CAPITAL PROJECTS RISKS™

©OLFA HAMDI - [email protected]

E X P E R I E N C I N GP R O J E C T R I S K

C O N T I N U O U S L YE V A L U A T I N G Y O U RA S S U M P T I O N S

W I L L I N G N E S ST O C H A L L E N G E

" B E S T P R A C T I C E "

T A P P I N G I N T O T H EP O T E N T I A L V A L U EO F U N E X P E C T E DD E V E L O P M E N T S



Look for ways toExperience Risk!The world most project and business managers currentlyinhabit often appears to be unpredictable, uncertain, and evenuncontrollable.Put simply, our industry needs to build upon the nineteenth-century emphasis on predictability and control to give way to anew appreciation for the power of uncertainty and the value ofunexpected developments.

Olfa Hamdi [email protected] @OlfaHaamdiwww.workpackaging.org

Thank you

5 Ways Companies Mismanage Capital Projects Risk

Leadership & Management

Transcript of 5 Ways Companies Mismanage Capital Projects Risk