April 5, 2019
If you have been in or involved with the construction industry for any length of time, you have invariably heard this or a derivative of this statement uttered on at least one occasion.
This statement seems to imply that random chance is the primary determinant of one’s ability to escape/avoid the bad job. While there is certainly an element of good fortune involved, it is my experience that the contractor has far more control over the outcome than this statement seems to suggest.
Beyond possessing the technical expertise to perform the work required on a particular project, the most important skill set in determining the success or failure of a job is the contractor’s ability to properly assess and price the risks they’re being asked to assume under the contract. The bad job frequently results from the lack of (or a breakdown in) the contractor’s risk management process during project acquisition. For those with a formalized project review process, the competitive desire/pressure to win work frequently results in the contractor justifying the improper assumption of identified risks. In those instances where a formal process does not exist, the risk may get overlooked, which frequently comes with significant financial consequences.
A consistent trait among the top tier performers in the construction industry is that they possess a well-developed risk management process that is utilized without exception, and the results of this process are rigorously followed in determining which jobs to pursue and on what basis. Construction is an inherently risky business. An integrated risk management process will serve to mitigate that risk and lead to more consistent performance.
If we can assist you in the review or development of your plan, please contact us.
Author: Doug Joyce, Managing Partner