The construction manager should understand the differences between shifting, shedding, and transferring risk. In this video, explore how these risk mitigation concepts are applied in the construction industry. Also, look at examples of each and how they relate to the concept of risk vs. reward.
- Once a risk has been identified, … a decision needs to be made on how to manage it. … The management or treatment of risk … can really be broken down into four possibilities. … We can eliminate it altogether. … We can mitigate or reduce the potential … or impact of the risk. … We can transfer the risk, either partially or in whole. … Or we can accept the risk and budget and plan for it. … The choice that's made really depends on the risk item. … Its potential to occur and the impact … that it would have if it did occur. … If the potential for occurrence is low, … or the impact it would have would be low, … then that might be the type of risk that I accept. … If the potential is unknown and the impact … could be devastating to the company or the project, … I might consider avoiding that risk completely. … That would fall into the elimination category. … If there are so many unknowns on a project … that I couldn't possibly budget for them all, … and so many that if I guess wrong … we could potentially go broke trying to manage it, …
- Defining risk
- Identifying the role of the construction manager
- Analyzing risk
- Controlling risk
- Managing challenges: scope, safety, communication, and more