Risk is simply the effect of uncertainty on our objectives.
When most people hear the word “risk”, they picture hard hats, hazard warnings and Health & Safety incidents. Those threats are real, visible and part of our everyday working lives, but they are only one slice of the pie.
Risk Is Bigger Than Health & Safety
Risk shows up in far more places than we tend to acknowledge.
Some risks cannot be easily costed: damaging a community relationship, harming your personal reputation or dragging your organisation into the headlines for all the wrong reasons.
We see it constantly. Poor risk management leads to poor decisions. Poor decisions lead to poor outcomes and poor outcomes can lead to public objection.
It is a predictable chain reaction.
Then there are the risks that hit closer to home: budget blowouts, schedule slippage, engineering rework and procurement delays. These are the ones that quietly erode value if left unmanaged.
Yet here is the part people often forget.
Not all risks are threats.
Many risks represent genuine opportunities through a positive effect on our objectives. There may be opportunities to optimise schedules, reduce costs, streamline execution or apply more effective approaches.
We generally recognise this intuitively, yet sometimes we need a deliberate reminder.
Risk Registers Should Be Working Documents
My reminder came during a two year contract with a Capital Projects team.
Mining projects rarely start completely from scratch. Haul roads, fuel farms, office blocks, camps and water treatment systems have all been built before.
If the Lessons Learnt from previous engagements have not been captured, we are destined to learn them all over again, each and every time.
Quarterly Risk Reviews should include those lessons.
They should be identified as Threats or Opportunities right from the earliest stages of a project.
In fact, a major project should start with plenty of high Threats and plenty of Opportunities simply because we know very little at that stage.
That also means the Risk Register is not a checkbox exercise. It is a prioritisation tool.
It highlights the biggest Threats and the most valuable Opportunities so we can actively mitigate one and deliberately exploit the other.
I challenge any Manager reading this.
Every time a request arrives for additional funding on top of Contingency or every time you hear a tale of woe explaining why a project has blown its Schedule, pull out the Risk Register and look at what has actually been happening.
I put it to you that, once the team received the big cheque, much of the Risk Management went out the window, save for the on the job HSE topics.
Now, I love Safety, Health and the Environment. They are all featured in Project Risk, but they simply do not tell the whole story.
We still have Cost, Schedule, Heritage, Community, Reputation and a swag of other consequences to consider.
Engineering subjects teach the theory, but like anything worthwhile, the real value comes from applying it repeatedly in real situations.
What should simply be a refresher is often a lightbulb moment when the rubber hits the road.
It is amazing to watch when they “get it”.
Risk Changes as the Project Changes
Heraclitus, around 500 BC, is credited with the idea that the only constant in life is change.
You cannot step in the same river twice. The water moves and so do you.
Projects are no different.
Through OoM, PFS, FS, Execution, Commissioning and Close Out, you are managing a living, evolving, project specific beast.
HSEC, Estimate and Schedule are shifting as maturity increases. Risk Appetite changes over time. Engineering capability evolves. Tolerance for cost and schedule blowout reduces as the project progresses.
That is why Risk Management is not a one off activity. It is a continuous, common sense discipline.
The Result of Putting Structure Around Risk
I was assigned as Risk Coordinator across approximately 110 projects, representing about half of a multi-billion dollar portfolio.
At the same time, I established a system that trained Project Leads in what their Function required, facilitated Risk Register builds, engaged SMEs, maintained quarterly review compliance and leveraged AI to provide practical quality assessments that helped Project Leads strengthen their risk maturity.
I had been brought in specifically to add some BI grunt to the Risk process and I hold the memory of that role as a badge of honour.
Over two years, I supported dozens of Project and Program Leads through multiple financial endorsement Stage Gates. Structured, practical, continuous Risk Management can give significant confidence to funding submissions. Pleased to report that not a single funding request was rejected due to inadequate Risk Management. Setting the methodology up early, providing education & tools, visually tracking review compliance and a maintenance schedule were key.
Risk Management Is Not Just for Projects
The same concepts can be applied to Strategic Business Risks, with a three to ten year window reviewed with the Leader and their team every six months.
They can also be applied to Operational Business Risks, with a one to three year window reviewed with the Leader and their team every three months.
It is not hard. It is simply structured. Given the right tools, it is no more complex than arranging for the right experts to be available for a couple of hours.
It is the activity you undertake to avoid chaotic weeks, long hours and sleepless nights and to position yourself and your organisation to be ready for the next initiative.
As Principal Consultant for GROWTH Improvements, I do not profess to be an expert in your field.
In fact, you build my knowledge bank every time I engage with you.
My role is to work with your team and facilitate the process so the right expertise is captured, challenged and turned into practical action. If you need assistance with Strategic, Operational, Program or Project Risk Management, just let me know.
Kind regards,
Damian