Risk to Reward - Navigating risk managmeent in projects and procurement
Effective project management hinges on a comprehensive understanding of risk – its identification, management, and potential to create opportunities. Whilst it is tempting to view risk purely as a threat to project objectives, risk can present valuable opportunities and drive innovation. In this article, we outline a structured approach to risk management based on Australian standards and highlight the importance of embedding risk management practices into your organisation’s culture.
What is risk?
At its core, risk involves exposure to potential loss, injury, or adverse circumstances. The Oxford English Dictionary defines risk as ‘the possibility of loss, injury or other adverse or unwelcome circumstances, a chance or situation involving such a possibility’ or a ‘person or thing regarded as likely to produce a good or bad outcome in a particular respect’. Similarly, the AS/NZS ISO 31000:2009 Standard defines risk as ‘the effect of uncertainty on objectives’. Construction project risks manifest in a variety of forms, from financial setbacks to safety hazards, and can arise at any phase of the project life cycle.
