Published here August 2017

Introduction | Change in Direction | Developing a Project Risk Management Strategy
General Approach | Summary of Recommended Actions

Change in Direction

Why would anyone want to "change direction" compared to the original plan? There can be all sorts of reasons. In the case of public works, for example, as the original work progresses, the public begins to see the impact of the final works and, for whatever reason, political or otherwise, objects vociferously. A political decision is then taken to temporarily cease progress while a compromise is found. Or a safety consideration may call the operation to a temporary halt. Or the decision to change is purely political, of which there are many examples. Or a better solution is found that may result in a better outcome, or a cost reduction, and progress is interrupted while a decision is made. And so on.

But in the last example, the better outcome and/or cost saving may only be achieved at higher risk, perhaps much higher risk, than doing it the old "tried and true" ways of doing things.[2] But how is the project manager to decide? Of course there are protocols to follow and interested parties to consult but, in the final analysis, the project manager has to decide. Careful examination and analysis will help, but in the end, the decision will come down to the project manager making a choice selection based on his or her intuition or "gut feel". In other words, how "risk-tolerant" or "risk-averse" that manager is.

Risk-tolerance, in this case, is defined as "The extent to which a risk could affect a situation, should it occur (i.e. the risk exposure) without triggering a response." Another way of looking at it is "The threshold of risk exposure that, when exceeded, will trigger a response." The important constraint here is "when exceeded"! Either way, in this case this limitation can be considerably extended by taking "all reasonable precautions", or even "excessive precautions" to ensure that the contemplated risk event does not occur.

The converse of this condition is that the manager may well be risk-averse, either because that is a part of his or her personal makeup, or that the possibility of failure is so high, and the consequences so grave, that even the thought is far too much. In such cases, being risk-averse is not such a bad thing.

Introduction  Introduction

2. A few examples from the author's experience: 1. In building foundations in tidal waters, do you work only at very low tides (takes much longer) or do you build a cofferdam for the work (quicker but much more costly and perhaps even more risky)? 2. In highway maintenance work, do you work only at week ends (takes longer) or do you shut the road down during the week (quicker and cheaper, but much more disruptive to users)? 3. In a high-rise project, after the foundations were completed for a concrete structure, the property was sold to a remote buyer to avoid bankruptcy. With interests in a structural steel company, the new owner ordered a change from a concrete structure to steel. Under the circumstances, the risks, opportunities and other ramifications were considerable.
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