Careers in Risk and Performance Management
By Laurie Bowman
You've built an incredible career working as an expert in complex, versatile construction projects. What have been some of your highlights and what fascinates you about this the most?
I have been very fortunate to have experienced a wide range of complex engineering projects in a variety of organisational contexts. Perhaps the one that project that stands out the most for me as a learning experience was a regional rail project for a public purpose rail line to a new mine in Queensland in the early 2000’s. I was a consultant project manager supporting the Program Director and was responsible for developing and maintaining the Risk Management Plan and a variety of safety cases that were required for the project.
Up to that point in my career my prior experience had primarily involved problems that were technical in nature, typically quantifying cost and schedule outcomes and the technical risk associated with different engineering options. What was different about this project was that it included cultural heritage requirements which I had not experienced before. We soon recognised that program schedule and the program NPV was highly dependent on the development and agreement of Cultural Heritage Management Plans (CHMPs) which were required prior to the commencement of construction.
Management of cultural heritage quickly emerged as the most significant risk on the program. The cultural heritage legislation was relatively new at the time and there was a lot of ambiguity in how it should be interpreted, there was a variety of stakeholders involved including a number of traditional owner groups, archaeologists, rail owner / operators, the mining company proponent, our civil contractor, 2 government departments and a variety of legal representatives. Initially the relationship between groups was adversarial there was not much trust between the project team and the traditional owners. Despite having no experience in cultural heritage management at the time, I assumed responsibility for coordinating the development of the CHPMs due to the level of risk involved.
I established a series of regular meetings with the Traditional Owner groups and we succeeded in developing mutually beneficial relationships. The CHPMs were completed ahead of schedule and the risk profile of the construction project significantly reduced as a result of developing a strong trusting relationship with Traditional Owners early in the project.
It was a great learning experience for me, as I initially felt out of depth, found it challenging dealing with requirements that I had not experienced before and was receiving advice from lawyers which I perceived to be conflicting at times. As I engaged directly with the traditional owners groups, trust was developed, I learnt about their culture had the opportunity for site visits to rock caves, shell middens and scarred trees.
The project required a careful balancing the conflicting goals of a diverse range of stakeholders and integrating health & safety, environment, community and financial risks into one decision making process. The project gave me a strong sense appreciation of the importance of listening to stakeholders, understanding their values and perspectives, particularly those with very different backgrounds and perspectives to my own.
The final result was that we made excellent progress on the CHMPs reaching agreement ahead of schedule and the cultural heritage risks were managed in accordance with the requirements of the traditional owners. The net result was also positive for the project team and the mining proponent as the project commenced earlier than expected, therefore generating more value for them and their shareholders.
What exactly does a risk manager and project controller do and how does that role fit into project delivery & delivering successful outcomes for all stakeholders involved?
Risk management simply involves dealing with uncertainty in a way that generates value and mitigates losses. In project delivery this means exploring opportunities for better ways of doing things, so that the goals and objects of the project may be achieved in a manner that achieves the desired results for the organisations shareholders as well as the stakeholders impacted by the project.
Effective risk management has the potential to impact outcomes in many areas such as financial performance, health and safety, environment, reputation and community relationships. Risk management is most important in the early stages of a project where the opportunity to influence outcomes is high and it involves consideration of the full lifecycle of the asset being produced by the project (design, construction, operation, maintenance, and disposal).
For these reasons it is important for risk managers to maintain a holistic perspective of risk impacts when making decisions or managing changes on a project. The risk assessment process provides the initial risk profile of the project so that decision makers can decide whether or not to proceed, followed by ongoing monitoring and reporting for communication and decision making throughout the project.
At a lower level the risk management process itself involves an ongoing cyclical process of risks identification, risk analysis, risk evaluation and prioritisation, risk monitoring and review. It is important that risks are allocated to those who are best placed to deal with those risks including the establishment of treatments or controls.
One of the important outcomes of the risk management process should be the learnings for people, teams and organisations. The monitoring of project risk during execution risk should be designed to create a digital historical footprint that aids the planning of future projects and reduces the risk of unfair claims and disputes. The construction phase of a project is where many risks are realised so it is important to ensure that appropriate controls are in place and that an ongoing monitoring and feedback system is in place so that learning opportunities are captured and dealt with.
Project controls is really a discipline within risk management which is primarily concerned with the control of risks associated with cost and schedule performance. A Project Controller’s role typically involves planning and estimating of the time and resources required to perform the project scope of work, the development of a cost and schedule baseline (a benchmark against which to measure cost and schedule performance), ongoing performance measurement and forecasting as the project progresses and change control mechanisms so that cost and schedule baselines are updated as scope is developed or changes.
Projects controls processes should provide a continuous feedback mechanism with frequent performance reporting at various levels and provides an opportunity for learning as performance problems should be investigated and mitigated as they occur. The ongoing control of the project should include analysis of costs and schedule risk and cost and schedule performance.
As mentioned earlier, if set up properly project controls provides an effective way of reducing the risk of unfair claims and disputes between parties and performance is recorded and feedback provided between parties throughout the duration of the project. It is very beneficial to involve project controls expertise in establishing the contract requirements for project planning and control during the procurement stage so that expectations are clear and there is transparency of performance, KPIs and reporting from the start of the contract.
This line of work, whom is it most suited for?
Risk management for construction projects involves a wonderful combination of creative thinking, statistics, psychology and effective communication skills. Risk scenarios can become quite complex sometimes so it is quite important for a risk professional to have strong conceptual skills to understand the basis for projects risks, and to be able to communicate these risks in a simple way that makes sense for people working at different levels of the organisation. The great thing about being involved in risk management is that you are continuously solving problems and helping others solve problems. This may involve helping executives or busy managers makes the best decisions or, at an operational level, helping team members track and control their risks so that hazards are reduced and so that unwanted risks are mitigated.
So if you are interested in design and construction, if you enjoy solving problems, if you enjoy statistics, and if you enjoy working with people and teams to achieve better outcomes then risk management is likely to be an enjoyable career path for you.
What does your typical day look like?
I like to start the day with an early morning gym session, it’s great to get the blood flowing and have time to think and reflect before the work day begins. I then commute to work via my mountain bike and typically start work starting at 7am. I begin by planning the day, and organising priorities. At 8am each day we have SafeStart meeting, during this meeting the HSEC team exchanges information about any learnings from the previous day, engages about what activities are on for the current day and explores how these activities may be done more safely. From there I go about my work day which at the moment involves coordinating the preparation of Major Hazard Facility (MHF) Report. MHF's can be mines, refineries, chemical plants and fuel or chemical storage sites where large quantities of potentially hazardous materials are stored, handled or processed. My work on the MHF report involves the collation and coordinating of inputs with the support of risk champions embedded within different areas of the site.
I typically get home around 5pm in the afternoon, take my Siberian Husky “Max” for a walk and have some dinner before relaxing with some research in the evening. I am currently in my first year of my PhD, my research topic is Risk Management and Systems Leadership and I am enjoying reading articles and working towards my confirmation milestone most evening and weekends.
Based on your experience, what are the dominant issues in the industry? And how is Synchrony placed to provide the best solutions to these issues?
The rate of social and technological change is continuing to increase meaning that organisations are needing to take a risk based approach in order to plan and solve problems. There are a variety of Mega trends impacting the nature of work including the construction industry. Some of the key impacts to the construction industry include:
- Climate change poses a significant risk to society and it is inevitable that governments will soon start implementing measures to place greater value on environmental outcomes relative to economic outcomes. This is likely to shift the construction industry towards smarter solutions which are less resource intensive particularly with respect to carbon emissions. Decision making and risk management will consider environmental impacts more heavily in the future.
- Technology brings opportunity for improved productivity and decision making. Technology advancement means that more and more routine tasks will be automated and workers need to be better at solving complex problems, teamwork and adapting to change.
- Increased focus on human factors and worker health and safety as technology advancement provides new opportunities to reduce worker exposure to hazards (e.g. autonomous vehicles, drones, 3D scanners) and to monitor a range of health variables such as temperature, light, hydration levels and other factors in order to reduce risks to worker health.
- I expect that there will be greater recognition of the value of data sharing (e.g. project controls data, risk models, BIM) between owners and contractors and expect that contracts will lean towards greater transparency of risks and profits between parties and less transactional thinking, opportunistic claims and disputes which have the nett effect of reducing project value.
Synchrony’s is well placed to deal with these opportunities as we are leaders in project risk management training and supporting teams, particularly engineering teams, to improve their awareness and capability in project risk management and control. The training program has been scaled back and is not being actively promoted while I am focused on my research project, though we do deliver training from time to time when client’s reach out with specific needs.
You seem to have great extra-curricular involvement which really compliments your career. Why is pursuing passions outside of your 'day job' important to you?
I believe that risk management is one of the most valuable yet least understood practices for projects, programs, organisations and society as a whole. If done well, risk management provides the opportunity to improve decision making at every level, from government, the boardroom, during project selection, engineering design through construction and operations. When applied in an integrated manner, risk management provides assurance that engineering endeavours will be more sustainable from an economic, social and environmental perspective. I find it very satisfying to contribute to society for such an important cause.
Most of the extracurricular activity that I am involved with has the intention of increasing awareness and knowledge of the importance of risk management. Complimentary to that I am also involved in delivering training and developing standards so that the practice of risk management may be better understood and applied, particularly in the project environment.
Engineers and other professionals often ‘fall into’ risk management roles and too often important decisions are made by gut feel - this should not be the case, particularly when dealing with high risk projects. 8 years ago I joined AACE International which is a professional association based in the US and was impressed with the work that they had done to develop their Decision and Risk Management Professional (DRMP) certification for engineers.
I was very fortunate to serve as Regional Director (Australasia and Pacific Rim) for AACE International from 2017 to 2019 which provided the opportunity to influence government, industry and academia for improved professionalism in risk management. More recently I have joined iChemE which is based in the UK, they have developed some useful resources regarding risk management as well. It would be great to see these practices and certifications receive greater recognition in Australasia.
What advice would you give to young professionals who want to work in risk, planning & project control but aren't exactly sure what it looks like, let alone, may have never even recognised this as a career opportunity?
Firstly I would say: Congratulations on your desire to work in risk management and control – this is likely to be a good choice. The future is becoming more and more uncertain which generally means that industry is going to be demanding more and more professionals who are competent in risk management. Awareness of risk management techniques is important for almost every professional so it is definitely worth getting exposed to the principles of risk management and deciding from there how far you would like to specialise in this area.
Working in risk management essentially involves helping people and teams make decisions in the face of uncertainty. If you are interested in decision making, psychology, identifying and solving problems, performance improvement and if you enjoy statistics then it is quite likely that you will enjoy project risk management and controls.
If you are new to the field I recommend you seek out opportunities for exposure to risk management on the job as well as finding mentors who should be able to provide guidance and answer any questions you may have. There are a number of professional associations such as AACE International and iChemE which have training and certification programs for risk professionals and Engineers Australia has a variety of technical seminars and networking events which you may find beneficial.
Laurie Bowman, GAICD FIEAust CPEng EngExec NER APEC Engineer IntPE RPEQ CCP PSP DRMP EVP
Laurie Bowman is passionate about generating value for shareholders and communities through risk and performance management. He is working as a Risk Engineer with Glencore and is a part-time trainer with Synchrony, where his focus is on working with clients to achieve capability improvement risk and performance management resulting in successful project, program, portfolio and organisation outcomes. Laurie has over 25 years’ of experience in engineering and management roles on complex multidiscipline engineering and construction projects and has instructed training and certification preparation courses on Risk and Performance Management behalf of AACE International and PMI.
Complimenting his technical skills, Laurie has well developed leadership skills having served on the board of the Association for the Advancement of Cost Engineering (AACE) International as the Director for Australasia and Pacific Rim, has served as the chair of the Queensland and NSW divisions of the Australian Cost Engineering Society and is currently a committee member of Engineers Australia's College of Leadership and Management (CLM) in Queensland. He is a member of the Standards Australia technical committee for many Programme and Project Management standards on risk and performance management. He is a graduate of the AICD Company Directors course, has a master's degree in business administration, a masters degree in commercial law, a bachelor's degree in engineering and is currently working towards a PhD on Risk Management and Systems Leadership.
This feature was curated by Malik Khan for The Construction Coach.