5 Ways Companies Mismanage Capital Projects Risk: a perspective

1. 5 Ways
Companies
Mismanage
Capital Projects
Risk
A PERSPECTIVE
PRESENTED ON ENGINEERING NEWS-RECORD WEBINAR
SEPTEMBER 2016 | OLFA HAMDI
Any use of this material without specific permission of the author is strictly prohibited

2. This presentation is not
about "Best Practices"
This presentation is meant to provide you with useful new ways of looking at the
project world that would help you make the right decisions to manage your project
risks.
Best project leaders are critical thinkers!
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG

3. Overlooking
Controllable Risks
Preventable risks (your baseline) include:
Your technology
Your soil conditions
Your site utilities ; Your facility conditions
Your machinery and inventory
Weather conditions; Permitting
Known labor considerations
PREPARING FOR A CONTROLLABLE RISK IS NO LONGER
RISK MANAGEMENT; IT'S DOING ONE'S JOB WELL!
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG
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4. Primarily Managing Risk
Retrospectively
Lessons learned, as developed and stored at projects closeout, are not constant!
What is true for one construction project may be counterproductive to another.
Correlations are not constant. Is your team fighting the last war?
RECOGNIZE THE INCONVENIENT TRUTH THAT IT IS VERY DIFFICULT TO USE PAST
DATA TO PREDICT THE FUTURE
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OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG

5. Mechanically Manage
Project Risks
Mistakes include reducing RM to a Template
Requirement
Standardization failure
Abandoned during execution
Missed Opportunity For Critical Input to
Authorization Gate
Missed opportunity to tap into the value that comes
with risk
RISK MANAGEMENT SHOULD BE A PRACTICAL
EXERCISE
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG
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6. Not Managing Risk in Real-
Time
Project managers are responsible for making sure that their company takes only the
risks that it wants to take. Failing to first understand overall shared risks and monitor
and manage risks in real time on both sides of the contract increases the chances
that the relationship loses its drivers; thus, negatively affecting the project.
CONSTRUCTION RISK MANAGEMENT IS A DYNAMIC PROCESS.
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OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG

7. Focusing on Process,
Not Decisions
Smart asset intensive companies work to
improve project employees’ ability to incorporate
appropriate levels of risk when making choices.
How to cope quickly with uncertainty, rather than the
uncertainty itself, becomes the priority
How to turn negative into positive is recognized to
be a formal critical soft skill across the organization
RISK MANAGEMENT IS ABOUT PEOPLE, BECAUSE
PEOPLE MAKE THE DECISIONS!
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG
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8. The future of risk management for
capital projects is in creating new ways
to continuously EXPERIENCE
making risk factored decisions
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG
"IF THE RISK IS BIG, WE HAVE
TO EXPERIENCE IT FIRST"

9. Project Execution Risk
Simulation Room™
Focus on people, decisions and consequences
A shift in the cultural view of risk management : transitioning from the problem-
solving mode to the opportunity development mode
Active learning with real execution management, negotiation and claims cases
Embedded into the organization
Grounded in systems thinking theory and IDR
EXPERIENCING CAPITAL PROJECTS RISKS™
©OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG

10. E X P E R I E N C I N G
P R O J E C T R I S K
C O N T I N U O U S L Y
E V A L U A T I N G Y O U R
A S S U M P T I O N S
W I L L I N G N E S S
T O C H A L L E N G E
" B E S T P R A C T I C E "
T A P P I N G I N T O T H E
P O T E N T I A L V A L U E
O F U N E X P E C T E D
D E V E L O P M E N T S
OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG

11. OLFA HAMDI - OHAMDI@WORKPACKAGING.ORG
Look for ways to
Experience Risk!
The world most project and business managers currently
inhabit often appears to be unpredictable, uncertain, and even
uncontrollable.
Put simply, our industry needs to build upon the nineteenth-
century emphasis on predictability and control to give way to a
new appreciation for the power of uncertainty and the value of
unexpected developments.

12. Olfa Hamdi
ohamdi@workpackaging.org
@OlfaHaamdi
www.workpackaging.org
Thank you