It’s a beautiful Spring day and the first pickup, backyard baseball game of the year. You’re finally the captain, with the immense responsibility of choosing the right players. The first picks are easy. You want to have fun, and you want to win, so you go with your friends and the ones who deliver. You know who performs the best in the field and at the plate–they come through almost every time. After those first few picks, it gets tricky. Time to make the tough decisions. What do you need–outfielders, power hitters, speed on the bases? And what about the new kids? How do you know who will perform the best? You don’t want to be saying, “You’re killing me, Smalls!”. Sometimes, it feels like a roll of the dice. And with a roll of the dice, winning results are never guaranteed.Fast forward–you’re in the big leagues, the big leagues of construction: More projects, more players, more risks. The stakes are higher, and it’s no longer sufficient to “go with your gut.” Each selection matters–from site work to framing to cabinets and finishings. The approach has to be different, but the question remains the same as the pickup games of the past. How do you pick the right players to help you win? What tradeoffs are you willing to accept, or not accept, based on your appetite for risk?
The simple answer – Put on your Risk Management ball cap and practice your fundamentals. One good game or good project isn’t enough. Consistent success doesn’t come from happy accidents. It comes from delivering repeatable and reliable performances. But your gut can still play a part. The key is to take the best of both–apply statistical, calculated analysis with experience, and feel for the game. Those fundamentals include the five steps of the risk management process.
• Risk Identification
• Risk Analysis
• Risk Control
• Risk Financing
• Risk Monitoring
The risk management process is an iterative process, which means you repeat the same steps of the process over and over to help achieve a desired result. While different issues and concerns will arise for every project, here are some common risk categories where this iterative approach must be used.
• Health and Safety
It comes down to your appetite–where are you willing to take the most risk? Where is your team the strongest? Where are the weaknesses? Think about baseball. Is the pitching solid? Do you lack power hitters? For construction, are your electricians consistently delivering high-quality work? Are the drywall contractors reliable? Do you have your strongest players in the most critical areas? To answer these questions, you need to determine which areas are mission-critical and which are business-critical.
Mission-critical translates to areas where mistakes could impact the survival of the project or even the organization. Mission-critical demands the highest priority and protection against risks. Business-critical is also essential, but not at the same level. If things go awry, it causes inconvenience, but it won’t take down a project or an organization. Business-critical risk can be mitigated, but some level of risk is acceptable.
Mission-critical requires your MVPs, the clutch players who deliver excellence every time. If framing is mission-critical, confirm that your subcontractor best-suited for the job handles it. For other areas, consider the strengths and opportunities of the subcontractors. Everyone has things they do well and areas that need a little work. Need consistent hitting? Go with the player with the .320 average but needs practice in the field. It’s all about transferring risk based on your organization’s needs.
Next up to bat–Pick the players and put the game plan into practice.
ABOUT LANDSOUTH CONSTRUCTION…Building Ideas
LandSouth Construction, the Southeast’s premier general contractor, specializing in multifamily, senior living, and mixed–use development, was named one of the nation’s Top 25 apartment builders by the National Multifamily Housing Council. Since 1998 LandSouth has transformed ideas into best–in–class communities through superior construction management and building long–term relationships. Headquartered in Jacksonville, Fla. LandSouth has completed more than 18,000 units including apartments, hotels, senior living, student and military housing, condominiums, townhomes, and mixed–use. For more information, please contact Erica Zumstein at 904.273.6004 ext. 109 | firstname.lastname@example.org or visit www.landsouth.com