Managing risk is just one of the many aspects of a construction manager’s job. It is a difficult task to pull back and see the big picture and all of the potential risks on the horizon. However, if risks are managed well, they can be a positive rather than a negative. Here is a quick, 5 step process to help you better manage your construction risk.
Step 1: Evaluate all of the risks for which there is potential.
Check your projects, contracts, scopes and more, and evaluate all the potential you have for risk. This is a fairly open brainstorm period where you want to find any and all items whether small or large. It may be helpful in this step to bring in a few co-workers as they may think of things that don’t come to your mind. Be sure and write these items down because you’ll want to use them in the next few steps as well.
Step 2: Evaluate which risks to tackle first.
This is plain and simple. All you need to do is take the list of risks that you just came up with and prioritize them. You could do this a few ways: by which could be most costly, which could cause danger to the on-site workers, or any and all of the above. You just need to make sure you pick out the big fish that will be the most risky. This, too, may be helpful to do with a team of individuals because it can be hard to evaluate risk with one set of eyes.
Step 3: Take stock of and acquire your risk management tools.
There are many different tools out there to help you tackle and avoid risks. You could use software to better manage projects, financing to better prepare for the year ahead, insurance to prepare for the worst, and even new hires to fill your company’s weak points. You have a vast array of tools to fill your belt with, so sit down and organize them so as to utilize them.
Step 4: Take action on the risks.
The last step is now the easiest. You’ve built a plan, organized yourself and your team, and now you have all the essentials to push towards stopping all of these potential risks. Think of it like replacing a roof on your house. At 20 years you don’t sit around and wait for leaks to happen. You evaluate if you need a repair or even need to replace what you have so that leaks never happen.
After you have used this process once, you can continue to use it yearly, monthly or even based on each project you encounter. If you choose to leverage your risk instead of constantly stressing out about it, you and your company will be better for it in the long run.