Risk and Opportunities

Human Risks in Project Formulation, Assessment, and Execution

Traditionally in assessing risk in projects, project teams go through a process of identifying and modeling quantitative and event risks.

Environmental, Social, and Governance (ESG) Risks in Engineering and Construction

Environmental, social, and governance (ESG) is a term used to represent a corporation’s financial interests in ethics and sustainability.

Uncertainty in Large Complex Projects

Uncertainty in projects is often conflated with risk, and the two terms are used interchangeably.

Defining Project Complexity and Its Sources

Complex projects are often described as being large and most large projects face increasing levels of complexity.

Enterprise Risk Management in the Engineering and Construction Industry

The focus of this Executive Insight is enterprise risks and their management in the engineering and construction (E&C) industry.

Corruption During the Project Execution Phase

Potential acts of corruption during the project execution phase encompass a range of actions by a host of potential offenders.

Corruption During the Tender Phase

Potential acts of corruption during the tender phase encompass a range of actions by a host of potential offenders.

Corruption

This Executive Insight focuses on raising awareness and reinforcing attention to corruption, which may be one of the most corrosive factors impacting the construction industry.

This Executive Insight looks at correlation in project and program risk assessments and some of the impacts of a failure to adequately consider such correlation in project risk assessments related to both cost and schedule.

Fragility

Fragility in systems, including project execution networks, is defined as the ability of the system to remain stable after perturbations at the “edges” of the project or to the internal network structure.

Changing Risk Managers’ Perceptions

This Executive Insight attempts to change some risk managers’ perceptions about large complex projects and the risks they face as well as some of the sources of those risks.

Laws of Improbability

In this Executive Insight, the lenses described by Hand are used to look at large projects and their unacceptably high failure rates.

Considering the Uncertainty for Large Projects

Recently a $15 billion project, one of the largest and most sophisticated U.S. public infrastructure projects ever undertaken, was completed in New Orleans in response to the devastation caused by Hurricane Katrina in August 2005. The project was necessitated by the failure of a Hurricane Protection System (HPS) that could not withstand.

Modeling and Mitigating Project Complexity

Whether the interest is megaprojects or more generally large projects, the consensus is that projects all too often fail. The reasons put forth vary depending on the project, but in general, we can agree that they fail because outcomes do not match expectations.

Folly of Averages

The growing inflationary pressures now emerging in the U.S. (and that are likely to be exacerbated by the emergence of trade tariffs) cause me to reflect on (1) the impacts of inflation on large complex projects and, more importantly, (2) how we assess and plan for them.

Fat Tails

Large projects are complicated and often sophisticated endeavors and we seek to improve the quality of our time and cost estimates by accounting for certain quantitative uncertainties in our estimates. Clearly a step in the right direction, but as the results of large project performance would suggest, not good enough. Perhaps we are unwitting victims to some of the laws of improbability, and maybe even the Law of Selection impacts our best efforts to address the uncertainty of estimates in our own risk analysis.

Assumption, Risk Driver, and Constraint Tracking

Assumptions are an inherent part of risk assessment and contingency planning in the engineering and construction industry. In short duration projects, these assumptions are usually considered to have some reasonably well-defined mean value and a standard deviation or uncertainty.

Systemic Risks in Large, Complex Programs

Systemic risk drivers may be divided into those internal to the owner organization and program team and to those external to the program.

Opportunity Analysis

Large complex projects are about meeting the challenges of scale and complexity, but also about capturing the opportunities of leverage. Every major program, as well as the projects within the program, are subject to a detailed and rigorous risk analysis.