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What Can Go Wrong Will Go Wrong

Managing a large-scale construction project is no small task. There are many moving parts, stakeholders with which to communicate, supplies to order, funding to obtain, permits to acquire, and safety to consider. With this understanding, it may not be a surprise to hear that time delays are quite common within construction projects. However, recent reports by Cornerstone Projects LTD sighted that 90% of construction projects experience time delays and finish behind schedule. Ninety percent! But that’s not all we know. The majority of these delays even occur within the first half of the project, because that is when any changes will have the greatest impact on the subsequent steps. These time delays not only delay the completion of the project but are also extremely costly, inefficient, and wasteful. So, what is causing these delays?

The International Journal of Managing Projects in Business published an article in 2018 highlighting the 10 most common causes of time delays on construction projects as the following:

Weather and climate significantly impact projects with more temperamental and extreme weather conditions, especially in Southeast Asia and anywhere along the Gulf Coast. These areas can have extreme typhoons, hurricanes, winds, flooding, and heat that prevents work from being done. The issue with this type of delay is that it is completely out of the control of the crew and even the best managers cannot prevent it. The only way to ensure this does not put a project behind schedule is to plan to work during the seasons when weather like this is less likely to occur. Furthermore, managers must incorporate the probability of weather delays into their overall timeline and add some cushion dates in the projections, so nothing falls behind.

Poor communication, lack of coordination, and conflicts between stakeholders are extremely common and completely avoidable mistakes. One stakeholder may need a certain vessel to complete their portion of the project, but another stakeholder may need to finish their step with that vessel first. If delays with the first occur due to a staff member being sick or lack of organization, it destroys the timeline for all other portions of the project. Every crew working on the project needs to be communicating exactly how much time they need, which pieces of equipment they need, and when they need it in order to ensure a smooth completion of the project.

Material shortages and financial issues have become increasingly relevant due to the supply chain issues resulting from the COVID-19 pandemic. Many companies had to close for the safety of their employees, and this has led to a shortage in certain materials – especially ones that take several months to procure. This issue can be compounded when the construction project is dealing with items that are increasing in demand like certain safety equipment, construction drones, or heavy construction equipment. Because there are many factors at play with delays caused by equipment shortages, there is not one clear-cut solution. However, planning well in advance and identifying which equipment will be needed at every step will ensure ample time to reserve your equipment and organize who uses it and when.

Worksite injuries, labor shortages, and a lack of qualified employees also go hand in hand with delays to a project’s timeline. When improper training or disregard for safety protocol results in workplace injuries, it not only costs money for medical bills, but it also costs time and labor to replace the injured employee. Especially with employees who operate specialized equipment, having backup replacements for when these employees fall sick or have personal emergencies that prevent them from working will save time and money in the long run.

Though hiring extra employees and investing in planners, emergency managers, and ensuring equipment is rented for longer than is actually needed to seem like expensive and avoidable costs, these steps can actually save money in the long run. Pew Researchers discovered that every extra dollar invested in risk mitigation will save 6 dollars that would have been spent on responding to and recovering from the emergency or setback. Especially for larger-scale projects that lose hundreds of thousands of dollars on wasted time and equipment for every extra day the project is delayed, spending enough beforehand on comprehensive risk mitigation and planning will significantly save money and benefit the company in the long run. Construction projects have a lot of moving parts, and a lot of things can go wrong that are completely out of the control of the project manager. Because of these inevitable risks, managers need to ensure they have prepared properly for and mitigated every risk that IS preventable, like poor communication, workplace injuries, and lack of experienced workers. What can go wrong will go wrong, so ensure that what does not have to go wrong won’t. Invest now to save later.

Works Cited:

Durdyev, S., & Hosseini, M. R. (2019). Causes of delays on construction projects: a comprehensive list. International Journal of Managing Projects in Business, 13(1), 20–46. https://doi.org/10.1108/ijmpb-09-2018-0178

Gerardi, J. (2021, December 28). Common Construction Mistakes | ProEst. ProEst. https://proest.com/construction/tips/common-mistakes/

Lightbody, L., & Fuchs, M. (2018, January 11). Every $1 Invested in Disaster Mitigation Saves $6. The Pew Charitable Trusts. https://www.pewtrusts.org/en/research-and-analysis/articles/2018/01/11/every-$1-invested-in-disaster-mitigation-saves-$6

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Controls to Reduce Risk & Pitfalls to Avoid

Introduction

There are numerous controls to avoid and reduce the risks to your project or organization. Though the risk is not always avoidable, there are ways to alter it. Below are proven controls used to alter risk.

Controls

– Engineering Controls: these are controls that reduce risk using engineering methods. This can include:

1. How one designs a project

2. The material used in a project

3. How one substitutes materials to meet technical and economic needs

– Administrative Controls: there are a variety of controls that reduce risk through administrative actions:

1. Creating signs, placards, posters, and visible warnings

2. Creating programs, standard operating procedures (SOPs), instructional material, and having policies in place

3. Conducting training and practicing plans before they are used

4. Limiting how exposed personnel are to hazards by reducing their time in an area and where they are working by policy and proper training. 

– Physical Controls: these controls act as barriers to protect personnel. These can include:

1. Personal protective equipment (PPE)

2. Fences

3. Personnel/Supervisors that oversee safety

Pitfalls to Avoid

In addition to knowing some of the common controls used in risk management, it is important to know the mistakes (pitfalls) you should avoid. Below is a list of common pitfalls seen in risk management:

– Over Optimism: overlooking root causes and not being honest with risks associated with your project/company.

– Misrepresentation: relying on one or very few perspectives (*this skews your data!)

– Alarmism: “worst case” events are included in assessments regardless of their likelihood (*they should be considered, but not given the highest priority!)

– Indiscrimination: All risks are given the same value or priority (*not all risks are the same priority!)

– Prejudice: subjective opinions are used rather than facts in assessing risk.

– Inaccuracy: using poor information or data to assess your risks.

Conclusion

The controls mentioned above are only some of the ways to alter risk, and we encourage you to use these controls in addition to your own. On top of this, your organization or project may experience pitfalls not mentioned above. There is no simple “one-size-fits-all” approach to risk management. However, controls like these can inspire you or your organization. We hope that after reading this, you learned a new way to approach risk management for your next project.

Source Used

Greenert, J. (2010). “OPNAV INSTRUCTION 3500.39C.” Department of the

Navy, Office of the Chief of Naval Operations, p. 1 – 41.

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Preparedness at the Individual Level

Risk Education

Preparedness Starts with You!

Risk is everywhere. From the moment you get in your car to go to work until the moment you swallow your last midnight snack before bed, you encounter different risks of different severities. It is also becoming increasingly obvious that both the number and severity of emergencies and disasters people face every year are drastically increasing with climate change, overpopulation, and pollution. Climate change expert and Vox journalist Umair Irfan writes that the number of disasters has increased by 5 times in the last 50 years. Furthermore, USA Facts shares that “The number of natural disasters that cost over a billion dollars has increased over the last forty years, rising from an average of three per year in the 1980s to 13 per year during the 2010s”.

This increase in disasters causes an increase in available information regarding disaster trends and social habits that can be used to improve emergency management policy, but it can also cause disaster desensitization. When people hear about disasters so frequently, especially when they occur with relatively little time in between, the events lose their excitement, shock, and horror. This can consequently lead to less personal preparedness, as people cannot afford to anticipate every possible hazard or live in a constant state of fear and readiness. Many people accept certain levels of risk in their lives to be effective and efficient members of society, but it is essential to find a balance between accepting some inevitable risks while still having a personal plan in case a hazard is encountered.

So what can you, as an individual without formal emergency management training do to reduce risk and assess the vulnerabilities in your own life? The first thing to do is make a list of all the possible or likely hazards you could face in your day-to-day activities, including car accidents, sickness, weather events, or serious injuries. Then create the possible outcomes and results of those hazards, always thinking worst-case scenario. For example, say a large flood hits your town. Should you evacuate? What items will you bring from your house? Where can you go? What if you lose WIFI or cell reception? Do you have backup food and water? What if someone is injured? Are you near a hospital or do you have emergency medical supplies? These are just a few small examples of things to think about, but there are hundreds of other hazards and actions to think about well in advance of the disaster.

It can be overwhelming to know what to do and expensive to take actions like buying a backup generator or retrofitting your home, but luckily, risk management experts from all over the world have provided many different lists and steps to take to move toward being more prepared.

The following is a list compiled by the international nonprofit organization Habitat for Humanity:

This is not a comprehensive list, but one that has some helpful ideas about where to start on your personal preparedness journey.

Being personally prepared is bigger than just you and your family. Your actions have impacts on your entire community, and this is especially obvious financially. Picture this: You fail to retrofit your home, and a massive flood destroys it. Because, in your confidence or lack of preparedness, you did not purchase flood insurance, you are unable to afford to rebuild. You either must take out loans from the bank or government, or you must move altogether, leaving your town to have to foot the bill on the reparations. Now imagine if many people within the same community are in a similar situation, but the town is unable to afford the reparations of all these homes. It is not ideal to leave the damaged homes as they are, because that would be visually polluting, unsafe, and reduce the number of citizens (and therefore taxpayers) who can live there. It becomes a huge, expensive task, all because people failed to be personally prepared.

Life is risky, and the number of risks is only increasing as society develops. However, do not allow the increase in disasters to desensitize you to the importance of vigilance, preparedness, and planning. You want to ensure that you, your family, and your community are resilient and safe when disasters strike, and you can only do that by understanding the possible vulnerabilities you face and taking preemptive measures to reduce their impacts. Preparedness starts with you!

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Relational coordination

Risk Management

When cooperating across sections there may arise a line of potential problems, mainly in regards to the communicative aspect. These problems arise as a result of the clashing of different expertise, authorities and cultural differences. In relation to this a professor within the field of management by the name of Jody H. Gittel has come up with her theory of relational coordination. This theory is mainly focused on the public sector, it is however still applicable for international private organizations. By using this theory as a tool, this theory can help analyse the interpersonal processes, which could potentially be barriers for optimal efficiency. This theory has furthermore been the foundation for multiple Danish consultants, whom have come with their own additions to this theory. Consultants such as Carsten Hornstrup claim that the definition of a good relationship is subjective, and a certain relationship can therefore be seen in two completely opposite ways. A relevant factor in this is the individuals authoritative position within the hierarchy of the organization, whereas leaders will often have a more positive outlook on the relation.

Jody H. Gittel has put up a negative and positive spiral with the purpose of illustrating what indicates a positive and negative relationship. The reason it is illustrated as a spiral is that, a relation is heavily built upon the communication and likewise. There is therefore no real ‘starting point’ and one should try to improve one of the following aspects, in order to breakthrough the next until it comes into full circle.

The theory of relational coordination is based on two different dimensions: Relations and communication. The quality of these aspects are defined as such:

Relations:

  1. Mutual goals: Same interpretation of the mission objective within an organization, where a task is solved based on a set of common, clarified goals. This is also synonymous with the organization’s vision, so it is crucial that everyone is on the same page regarding the overall goal.
  2. Mutual knowledge: To which degree are the different groups familiar with each others professional field and competences? This is not only about perfoming one another’s list of duties, but also knowing and understanding them.
  3. Mutual respect: Whether the different groups feel acknowledged for their contribution to solving the common task. This is where the higher placed personnel may show a lack of respect other groups, which ultimately affects the common engagement in a negative way

Communication:

  1. Frequent and timely: This indicator revolves around whether communication is timed correctly, often and interpreted in a meaningful way. The overall coordination suffers if the communication is too frequent, too rare or timed incorrectly.
  2. Precise and problemsolving: Is the communication constructive, practical and relevant? The task needs to be presented in a comprehensive way for the receiver, and needs to address the actual issue at hand.
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Business Impact Analysis

Risk Management

Business Impact Analysis

There will often be many active pieces within an organization. Some may be critical for the organization’s infrastructure, and others may be not as essential for the survival of the company. When conducting a business Impact Analysis (BIA) one needs to consider what is it, that brings actual value to the company. A company’s wealth and value is not only decided upon by its monetary value, but its cultural and social values as well. By first off, we need to establish ‘what value are we creating’ and thereafter ‘who do we create value for’ in order to get an idea of the organization’s output and paint a picture of the overall process.

By reviewing the following steps, we can in a systematic way review relevant elements for our company’s value creation. The steps are as follows:

  1. Value creation: Who are we creating value for? To understand this business model, we need to identify potential hazards that can cause disruption to our operations. In this step, you can use models such as Porters Value Chain and Business Model Canvas.
  1. Identification of critical activities: In this step we pool in a bunch of processes, which together constitute an activity. For example, the production line makes value for us, so we need to recognize where potential disruptions within this productionline would be critical for our operations.
  1. Mutual dependencies: Which activities rely on each other to function? In this part, it is also relevant to consider how dependent we are on our suppliers. Do we have an alternative suppliers, in case our Tier 1 is unable to perform their part?
  1. The robustness of critical activities:  How do we test our robustness? In this step we test the minimal operative level. For example, if the power is out, can we still keep an overview of our logistics on paper rather than electronics? The system’s robustness is defined by being able to absorb disruptive activities, whilst keeping our operative integrity? An analysis can be conducted by doing the following:
  2. Identifying vulnerabilities/minimum operational levels.
  3. Identify where an increase in resources can strengthen our robustness.
  4. Different types of exercises can also help in this phase (e.g. contingency plans).
  1. Internal and external ressources: The ressources that the company is reliant on, such as:
  2. Infrastructure; roads, stand-alone systems.
  3. Physical ressources; storage/inventory, equipment,
  4. Intellectual ressources; skills, employees educational background, capabilities.
  1. Maximum Tolerable Downtime (MTD): MTD describes the point where an organization is unable to keep their operational integrity after a disruptive event (post-crisis). The costs of restoration is so high that it would not be worth it.
  1. Recovery Time Objective (RTO): RTO describes when management wishes for an activity to be back up and running. RTO requires resources and therefore an allocation of economic funds. The RTO can be influenced by mitigating intervention, by having Risk Management as an integral part of the organization.

This figure can help illustrate what the MTD and RTO means during a disruptive event.

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The risk manager

Risk Management

Over the last months we have on a weekly basis posted comprehensive articles covering tools and models which are useful for any risk manager to know of and be familiar with. In this article we will make a summary of these and dig into exactly what it means to be a risk manager.

Introduction: What is a risk manager?

A risk manager is an individual responsible for managing an organization or project’s risk. The person’s goal is to minimize or remove risks that can result in losses to the organization. This is done by identifying the risks, evaluating them, and deciding on which approach is the safest and most efficient. The risk manager can come in many shapes and forms, since risks are involved in almost any type of work done around the world. This means that whether you are within the construction industry, finances, or consulting, you can most likely benefit from having a risk manager to overview your operations. With there being this many varieties in risk manager approaches, there is equally many models, theories, and tools ready for risk managers to use.

Summary of tools and theories

Below you will find an overview of the articles previously made on the website. This is to help guide you towards what is relevant to you. You can access each article by simply pressing the title of the article.

Black Swan theory: This theory in short explains how to be prepared for what you cannot predict will happen. It is about bolstering your organization so it can get through a crisis of large proportions.

Sendai Framework: This article digs into how the Sendai Framework needs to be taken into account when building new constructions or rebuilding constructions after catastrophes. Furthermore it’s goals are to understand risks and how to efficiently mitigate them.

Fault Tree Analysis (FTA): The FTA is an important model in the risk manager toolshed. This model will help understand where and when disasters happen and how to reduce the likelihood of them.

Risk Management Decision: This article takes a deeper look at how a risk manager can get help in their decision making. It bases the decision making off of three different parameters which a risk manager should take into consideration.

The Perception of Risk: This is a theory made by the American professor Paul Slovic. The theory revolves around how an individual perceives risk and what factors play into it. It is one of the most important theories in regards to understanding your employees/co-workers risk perception.

Risk Management: Safety Risk Management: This article takes a closer look at safety risk management, with the goal being to identify the safety hazards and then mitigating these.

Even more articles and posts can be found in the RICO section on the website. Make sure to carefully study these when engaging in a large project or day-to-day work in an organization!

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Risk Strategy. Safety Risk Management

Risk Management

This article describes how safety risk management is a key component of any safety management system and involves identifying safety hazards to your operations and assessing the risks of mitigation. To successfully identify hazards you should think laterally and be unencumbered by past ideas and experience   

Introduction

The term “safe”

Those involved in disaster  management are often faced with defining what level of safety from hazard exposure is considered sufficient. There is not necessarily a correct answer to the question “how safe is safe enough?” ( Derby and Keeney, 1981). Most people assume that referring to something as “safe” implies that all risk has been eliminated. However, because such an absolute level of safety is virtually unattainable in the real world, risk managers must establish thresholds of risk that define a frequency of occurrence below which society need not worry about the hazard. Derby and Keeney (1981) contend that a risk becomes safe or acceptable if it is “ associated with the best of the available”

This definition can cause great disagreement between the public and disaster risk management officials. The public may expect a level af safety determined to be zero risk for some hazards, such as terrorism in the United States. Officials may need to recalibrate the public’s perception of these hazards continually to let the public know that although the risks are in fact stille possible, they have been mitigated to the best of the country` s social, economic, and technological abilities. Although the chances of a terrorist attack will always exist, governments strive to attain levels of security dictating that the risks are so low that people need not worry.

To determine what level of safety is most acceptable, Derby and Keeney ( 1981 ) contend that “the best combination of advantages and disadvantages” must be chosen from among several alternatives. For instance, although the risk for car accidents is one of the greatest we face on a daily basis, eliminating the risk by prohibiting the use of cars is impractical. However, we can make cars more resistant to impact, add seat belts and airbags, and enact laws and regulations that limit the ways in which cars are operated. The result is a level of safety upon which society agrees is acceptable in relation to the benefits ( mobility ) retained.

Paul Barnes of the Australian Department of Primary Industries explains the importance of establishing an agreement on what constitutes safety in the community. He writes:

Is our goal Community safety or Safer Communities? As a societal outcome, Community Safety can be sought via efficient  and effective regulation at an institutional level. Associated with this regulation must be similarly high standards of risk management applied at the community level. The establishment of safer communities , however , is a different matter. Before this can be sought as a goal, determinations must be made about what safety means to the communities themselves. To do this, institutional regulators must ensure that use of their expertise does not promote inflexibility in understanding the world – views of the public. 

 Feel free to comment, or contact us for more information!

        source:

          Coppola, D. (2021): “Introduction to International Disaster Management”   

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The Perception of Risk

Risk Management

Introduction

Paul Slovic is an American professor of psychology at the university of Oregon. Slovic mainly studies human judgement, decision making and risk perception. He has released a large amount of research papers on the before-mentioned subjects and is considered one of the leading theorists within the risk perception field.

One of Paul Slovic’s most famous publications is “The Perception of Risk”. A publication where he researches and discusses how an individual perceives risk, in regards to extreme events and catastrophes.

The theory

What Slovic found out is that the relations between risk and benefit are never the same, but however based on how the individual perceives the risk. This perception is based on the past experiences that the person might have with such events or catastrophes.

Furthermore his research shows that if you ask people to answer what risks they think should be prioritised, the person will rely on subjective preferences to determine which risks they deem large or small. Thus there is a difference in regards to when a risk is perceived as large or small on an subjective level.

In the book “Perception of Risk”, Paul Slovic adresses two different factors which play in to how a person perceives risk; dread risk and unknown risk.

Dread risk revolves around the factors of which the person is aware of and have knowledge about. The variables within this factor includes fear, controllability, the potential of the catastrophe and fatal consequences. Typically the fear within this factor is the lack of control.

Unknown risk is about new risks which the person have little to no knowledge and awareness of. Examples of this is new technology, invisible risks, non-material risks and non-observable risks. These are typically perceived as a bigger threat than the dread risks for the simple reason that people cannot fathom the risk or consequences of it.

Why is this important?

As risk managers it is important to us that we know which tools and theories are relevant to our field of work. The perception of risk is one of the most important publications and theories in regards to understanding the people you work around on a deeper level. Knowledge of this can help predict and control how an individual will react in a potential crisis situation, but it can also help guide you when assigning roles on a complex project.

For example, by having knowledge of the perception of risk you can be more aware that you shouldn’t assign a person an assignment, if that person has had bad experiences with similar assignments perviously. Furthermore you can as a risk manager create more safe and comfortable working environments for the people around you.

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Risk Management Decision

Risk Management

Risk strategy. Risk management decision-making 

This article describes how problems have been identified in processes, which are not always perfect, and how there is often anomaly and unreasonableness in deciding what is passable, what treatment options could be dominant in the three areas where problems can be identified. 

introduction 

Decision-making processes in risk management are not perfect, and in fact there are often biases and injustices in determining what is acceptable and deciding which treatment options are best. 

The following are three areas where such issues have been identified: 

  1. Individuals with money and interests can influence the process of determining whether risk can be accepted. Because the process of determining (including the costs of mitigation and regulatory practices) is influenced by politics and may be shaped by political ideology, it is possible for companies or interest groups to lobby and influence these decisions. This can be seen with dangers such as handguns and assault rifles, environmental degradation, soil and water pollution and construction in hazardous areas. Increased citizen participation in the process can reduce the type of injustice. By increasing the decision-making power of the general public, a more democratic outcome is possible (although not guaranteed).  
  1. Putting a dollar number (in cost-benefit analysis) on a human life is unethical and incomprehensible. This is primarily a factor related to involuntary risks. For those whose lives are at risk, any dollar figure will seem low or inappropriate as a trade-off to accept the risk. Many people would feel that their life is too great a price to pay for the existence of involuntary risk. The cognitive processes that dictate these decisions about “people in a human life” are often different for voluntary risks. As the example of car safety illustrates, people are willing to accept some increase in risk to their own lives in favor of more affordable products. How much more affordable is different from person to person. Nevertheless, as evidenced by lawsuits against tobacco companies from smokers who became ill, people may be reluctant to accept some voluntary risks despite prior knowledge of these risks. Due to the controversial nature of putting a value on life, it is rare that a risk assessment study would actually indicate a dollar figure for the amount that could be saved per. Accepted human loss of life. Subsequent studies have calculated the dollar numbers used per. Life during a crisis, but wondering how much a company or government is willing to spend to save or risk a life would be extremely distasteful to most people. 
  1. Risk management is usually an undemocratic process because those who may be harmed are not always identified or asked if the danger is acceptable to them. It is not hard to remember a case where a vulnerable or disadvantaged group of people were exposed to a risk whose benefits were enjoyed by others. Many landfills for toxic waste are located in poor parts of the city, towns and states, although people in these communities did not have much to say in determining the location of such materials. Related to these materials. In the context of this injustice, the reality is that the poor are usually less able to avoid such risks because the properties or jobs available to them are often associated with the same risks. It is often the poor who have to live in areas at high risk of floodplains, or under high-voltage power lines or along highways. These carry a greater proportion of the population risk, whereas many others enjoy much lower risk levels from these particular dangers, even though they enjoy a disproportionate share of the benefits. Risk communication and public participation are thus important in counteracting these injustices. 

  Feel free to comment, or contact us for more information! 

         source: 

           Coppola, D. (2021): “Introduction to International Disaster Management”   

 

          

   

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Fault Tree Analysis (FTA)

Risk Management

Introduction

The fault tree analysis, also known as FTA, is a model used to understand how systems or processes fail. Furthermore, it helps with identifying the best way to reduce risk and to determine the probability of an event occurring. The FTA shares many of the same aspects as the BowTie Analysis (BTA). The model was originally made by H.A. Watson working at Bell Laboratories with the goal of evaluating ballistic missiles. Since then, the FTA has spread to a wide range of industries where identifying risks and calculating probability is relevant.

The Model

The model usually consists of 4 elements:

The main event: The event at the top of the model which shows what is being analyzed within the fault tree.

Intermediate events:Events that occur between the basic events and the main event.

Basic events: A failure or error which results in another event happening. These are shown as circles on the bottom of the model

AND/OR gates: These are the link between the events in the fault tree. AND gates are symbolized with a flat bottom and means that all of the underlying basic events have to happen in order to trigger the intermediate event above. OR gates are symbolized with a curved bottom and means that just one of the underlying basic events have to happen to trigger the intermediate event above.

How can we use this in our projects?

A single fault tree is used to analyze and understand a single event, therefore we need to have conducted a risk analysis of the project before an FTA becomes relevant. Once we have the risk analysis we use the FTA’s on each of the hazards we have identified. It basically comes down to the following five steps:

1: Define the undesired event to study

2: Obtain an understanding of the event

3: Construct the fault tree

4: Evaluate the fault tree

5: Control the identified hazards

By following these steps you can reduce the risk within your project and at the same time determine which risks you are already protected towards and which risks you need to put more ressources into.