Engineering and construction firms are dynamic and inherently risky businesses. Historically, owners, chief financial officers or risk managers were the sole administrators of risk management. Today, however, the issue of risk is everyone’s responsibility, and a risk management culture must be engrained across the entire organization.
Memorable Quotes from the Video:
A decade ago, the issues of risk revolved mainly around project selection, project execution, change orders and safety. As risks in our industry are changing and expanding at a record pace, we face a very different playing field, characterized by tighter margins, increasing project complexity, acute labor shortages, retirement of experienced baby boomers and new cyber threats. Never before has there been less room for error. These new risks can derail even best-in-class engineering and construction firms—despite best-intended project execution.
This Quarterly edition presents a variety of approaches and strategies for addressing specific risks like selling a company or subcontractor default as well as more widely applicable approaches for assessing project risk profiles, to name a few. We also updated one of FMI’s classic studies, “Why Contractors Fail,” which presents root causes of contractor failure that still apply in today’s industry context. All of the identified causes can be controlled and mitigated.
Our goal with this Quarterly issue is to inform choices and provoke ideas around effective strategies for managing risk in today’s engineering and construction industry. Managing risk today is much more than using defensive tactics to protect against downside events—smart firms view risk as a strategic opportunity to win. So should you.
CEO, FMI Corporation