How to Deal with Costs, Overrun, Delays & Risks in Construction Management
- Monday, 18 April 2016
As with any other project, construction management has a very delicate process, one that can be disrupted by overrun, delays, and other risks. Human error is bound to happen, but it's not about whether these problems can be avoided - sometimes it's just beyond human control-, but how they can quickly be dealt with.
Several construction managers might tell you that, when a construction project goes over board in costs or time, most of the fault comes from bad project scoping; not taking into consideration emerging risks or obstacles from the very beginning. Others will tell you, that it is due to ambiguos design, or bad design altogether. However, even though you might excel in reducing these risks by implementing best project management practices, there are still things that will come up as you go. That said, it's important to take the following into consideration:
Develop great negotiation / diplomatic skills
When things turn hard, acting in desperation or out of anger will not help you, your stakeholders, or the construction project at all. You need to develop great negotiation skills. Keep calm, and be candid with your stakeholders. Define the problem and work on a compromise for all parties involved. The more honest you all are about the situation, the faster you can arrive to a satisfactory solution.
As a contractor, become a "Trusted Advisor"
The book "The Trusted Advisor" by Maister, Green and Galford details how a consultant can become more than just an external solution provider, and more of a trusted guide for her clients. This is extremely handy, especially when you hit a major obstacle in your construction project. You will be able to provide the client with advice, and easily move forward with the project. Of course, bear in mind that you will still be responsible for the outcome.
Add a contingency plan to your scope
You should list out all possible project risks in your project scope. You should also address these issues accordingly. Think of Plan B, C, D... in case something comes up. With no contingency plan, you become more vulnerable than need be.
Avoid ambiguity
As mentioned above, if the project's scope is ambiguous or has faulty design, then sooner or later, issues will come up. The more specific you are, the less risk there is. This not only refers to the construction project scope, but also project deliverables, and work contract. An ambiguous contract with no contingency plan opens a big door for possible legal confrontations.
Break down complex projects into smaller bits
Is your construction project too complex? Then break it down into manageable bits, both in time and size. Allocate these bits to multiple teams that can coordinate with each other. This works just as a finance portfolio: don't put all your eggs in one basket.