Collaborative Risk Management in the Construction Industry

Tony McDonald
No construction project will ever be risk free. However risk management has now become an integral part of the management of projects and the methodology has taken significant steps forward in recent years, towards establishing a more satisfactory team-based framework.

Tight financial constraints make this team-based framework more important than ever. The main stakeholders involved in a construction project - owner, project manager, designer and contractor – typically perceive different and individual types of risks to the project. A collaborative approach to risk management will integrate these individual perspectives into a coherent and rounded risk management strategy, ultimately benefiting the project and all those concerned with it.

A collaborative approach to risk management will integrate these individual perspectives into a coherent and rounded risk management strategy...

My own approach is informed and influenced by my former role as programme risk manager on a key defence programme. In the public sector, the stakes are especially high – the client is accountable to the government and to the taxpayer if things go wrong. The government is increasingly promoting a collaborative approach to managing its projects, recognising that this shared responsibility results in better allocation and handling of the risks involved.

Both the public and private sectors stand to benefit. Organisations need to be able to demonstrate they’re managing their risk appropriately - not only doing risk management but doing it well. When performed well, risk management allows the leadership of a project to demonstrate that they are in control.

When performed well, risk management allows the leadership of a project to demonstrate that they are in control.

A single focus on the project’s objectives is the starting point for an open and honest environment that doesn’t seek to attack when problems arise – but rather explores jointly to find the best way of managing the risk. This is about working together to get maximum value from any project or programme. Avoiding a compartmentalised mind-set is important – and that includes not dumping the risk on one party. Traditionally contractors have tended to be on the receiving end of this and it’s a practice that benefits no one.

Most professions within the industry agree that this is an eminently sensible approach. But in reality there are barriers to embedding this joint framework into everyday practice and this is the challenge we currently face as risk management practitioners.

Risk is something of a latecomer to the collaborative way of working...

Risk is something of a latecomer to the collaborative way of working, perhaps because it has not always been seen as an integral part of the overall management of a project. Fortunately this is no longer the case, but we are playing catch-up to some extent. The required culture change will inevitably take some time to permeate all sectors but we are seeing very encouraging moves in the sectors.

Collaboration is also contractually challenging. I’ve been active on the APM’s Risk Specific Interest Group for many years and I currently serve as a committee member. We’re now attracting interest from a much wider field than previously, and our four annual events are very well attended.

This is an exciting time for risk management at Faithful+Gould and I am relishing my new role as UK Head of Risk Management. We already have team members who are PMI and APM risk management qualified, and we are encouraging all interested staff to pursue these pathways. We are also providing in-house training for staff to further empower them to support their clients. I anticipate that we’ll be recruiting in this area too.