Risk Management Presentation to Doyle Property Club
29
Vertice Development Management RISK MANAGEMENT IN CONSTRUCTION & PROPERTY DEVELOPMENT Marc Preston Doyle club 5 th June 2014
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Effective risk management for Contractors , Specialist trades, Property Developers and Homeowners. Spending 80% of the effort to avoid problem arising rather than 80% effort sorting them after the event.
Transcript of Risk Management Presentation to Doyle Property Club
Vertice Development Management
RISK MANAGEMENT IN CONSTRUCTION & PROPERTY
DEVELOPMENT
Marc PrestonDoyle club 5th June 2014
RISK MANAGEMENT IN CONSTRUCTION & PROPERTY
DEVELOPMENT
Part 1 Marc Preston – Risk management overview and Guide
80% of EFFORT TO SORT OUT PROBLEMS AFTER THEY HAVE
OCCURRED
80% of EFFORT DEDICATED TO AVOID PROBLEMS OCCURRING IN
THE FIRST PLACE
What are we going to discuss?
• What is risk Management?• Whose it for?• When do you do it?• How do you do it?
Why bother?
Historically in financial institutions, risk functions such as legal, compliance, audit, credit risk and market risk
Operational risk was generally the responsibility of business units as part of their daily activities. Risk management was focused primarily on financial, predictable and quantifiable risks related to loss prevention.
Since the 1980s, risk management has evolved to include corporate governance, alignment to strategic objectives, capital adequacy and stakeholder value. Additionally, regular discussions on risk management started appearing on corporate board agendas.
NO WONDER FEW BOTHER !!!!
Complex Event Processing – Analysing streams of information from multiple sources and deriving a conclusion
Monte Carlo simulations- essentially calculation of probability using computer algorithms
Occam's razor (also written as Ockham's razor from William of Ockham, and in Latin lex parsimoniae) is a principle of economy, or succinctness used in logic and problem-solving.
It states that among competing hypotheses, the hypothesis with the fewest assumptions should be selected.
The razor states that one should proceed to simpler theories until simplicity can be traded for greater explanatory power.
The simplest available theory need not be most accurate.
Occam’s Razor
KISSKEEP IT SIMPLE STUPID !!!!!
Broad spectrum of people in our industry
ISO 31000:2009 can be applied throughout the life of an organization, and to a wide range of activities, including strategies and decisions, operations, processes, functions, projects, products, services and assets.
ISO 31000:2009 can be applied to any type of risk, whatever its nature, whether having positive or negative consequences.
IS THERE A STANDARD?
ISO 30001 – What does it say ?
Risk management; “coordinated activities to direct and control and organization with regard to risk”
Risk management process; “systematic application of management policies, procedures and practices to the tasks of communication, consultation, establishing the context, identifying, analysing, evaluating, treating, monitoring and reviewing risk”
ISO 31000:2009 provides generic guidelines for the design, implementation and maintenance of risk management processes throughout an organization.
The scope of this approach to risk management is to enable all strategic, management and operational tasks of an organization throughout projects, functions, and processes to be aligned to a common set of risk management objectives.
ISO 31000:2009 is intended for a broad stakeholder group including:executive level stakeholders appointment holders in the enterprise risk management group risk analysts and management officers line managers and project managers compliance and internal auditors independent practitioners.
ISO 30001 – What does it say ?(2)
WHY ME?
•Collaboration•Single team•Be ( Now constucting Excellence) “Guide to Risk Management”
Heathrow Express
What is Risk Management
A systematic approach to the identification, prioritisation and elimination of risk
Whose it for?
All Clients and all developments and schemes involve some degree of risk
When do you start?
At the earliest possible moment. This process provides the Client with an opportunity to ensure his scheme is aligned with his business plan and he achieves his objectives in a
controlled manner
What do you do?
1. Identification2. Prioritisation3. Give Ownership4. Draw up action plan5. Decide objective6. Decide date for action7. Review progress & actions8. Seek and gather feedback9. Keep live, flexible & responsive to
change10. Record outcome for future use
What do you do?
Brain Storming
Involve all Parties
What do you do?
Lots of ways to do this e.g. Monte Carlo simulations
But best way is to score out of 20 the following
•Likely impact
•Likelihood of occurrence
•Use of common sense
What do you do?
Likely impact
• Monetary
• Descriptive – Catastrophic, critical, serious, irritating, minor problem
Likelihood of occurrence
• Highly likely, More likely, likely, might happen, unlikely
Quote taken from Linkedin Risk Management Group
What do you do?
Unless a Company and an individual is allocated a risk to manage it will not happen
The person / company allocated a risk must be the person best able to manage it
What do you do?
Must be CLEAR and SMART ( specific, measurable, agreed, realistic & time framed
Costs involved, (if any), must be understood
Be clear on objective –risk to be shared, passed on, eliminated, insured, controlled
What do you do?
Regular reviews are essential of top priority risks say for this month & next month
What do you do?
The risk process must be able to add new risks, change priorities & respond to changing circumstances
A record of solutions should be kept to build a database for future use
Item No
Description of RiskPrioritisation (Score A & B out of
20)Ownership
Action
Probability of occurrence (A)
Likely Impact (B)
Risk Score (AxB)
Company Name
Cost (£)
To be done (Date)
Feedback
FURTHER ACTION
THE RISK REGISTER – SAMPLE FORMAT
www.verticeqsonline.co.uk
TWITTER @verticeDM @verticeqsonline
07899 067 580
