We’ll explore these themes in our blogs over the next few weeks. I’d love to hear your views and whether you agree with my selection.

Only 30% of capital projects are delivered on time and only 15% on budget, according to recent reports, demonstrating the need for better risk management within and across projects.

I’m very pleased to be presenting a webinar on what can be done to increase project success, for the World Risk Day Virtual Summit on May 14th, which Active Risk is once again supporting together with the leading global risk and project management bodies.
 
The stakes are high and the shocking metrics show there is no time to lose. According to a 2012 Accenture report, only 30% of capital projects are delivered on time and only 15% on budget, and more than 60% of those surveyed expected the size and complexity of projects to increase.
 
This year’s World Risk Day challenges the myth that project success can be delivered by a traditional focus on cost and schedule management alone. For real success today’s complex projects need to bring risk into the equation.
 
Around $16 trillion dollars (USD) are spent on major infrastructure projects and capital programs each year, so even small improvements will make big differences.
 
While the risks associated with many projects can be great, so can the rewards. As the world emerges from the global economic crisis one of the driving forces will be a concentration on infrastructure build. From the Rio 2016 Olympics to the Qatar Rail project in the Middle East, an ambitious $36 billion railway network, and various Australian port, rail and highway projects; governments and businesses are using major capital projects to stimulate economies with infrastructure as the backbone. This means increased scrutiny to ensure projects are delivered successfully, within budget and time schedules.
 
So why should you make the time to participate in World Risk Day and register for the Virtual Summit webinars on May 14th?
 
In our experience, even award winning companies, where the risk professionals may be regarded as leaders, are still hungry for best practices and new ideas. Questions such as, “how do we implement a risk culture?”, “where do project, program and enterprise risk crossover?”, “how do we identify, share and mitigate risk across the supply chain?”, or even “what makes a great risk manager?” come up time and time again.
 
World Risk Day brings together risk and project professionals from around the world to discuss innovative ways of working during its Virtual Summit. Many of the speakers have first-hand experience of managing risk on multi-billion dollar projects in sectors such as infrastructure, aerospace, defence and rail. This is a fantastic opportunity to share real-life experiences and practical advice on the role of risk management in these mega-projects.
 
Register now for the World Risk Day 2013 Virtual Summit.
 
Follow @WorldRiskDay on Twitter and join the debate with #projectrisk.

• Inaccurate identification of the need for infrastructure
• Policy uncertainty
• Failure to assess the cumulative impact on consumers of funding infrastructure through user charges
• Taxpayer exposure to losses
• Delivery costs are higher than they should be

 
Is there something here which private sector organizations can learn from?
 
In your organization is there a clearly articulated plan about your strategic projects which can be accessed by all who need to see it? Are risks identified and shared? Is there regular monitoring of progress? Are new communication channels being used appropriately to share information with employees, investors, the media and citizens who may be affected by projects?
 
Download our guide to assess your own organization’s risk management readiness and see how risk can drive competitive advantage.

Accountability is more than just showing up on time, delivering reports and delegating work to other team members. Truly successful organizations foster PMs that feel personally responsible for a project’s success, as in today’s economy just one under-performing project can undermine the profitability of an entire program.

How do best-in-class companies achieve accountability?

When it comes to risk, organizations need to foster a risk-aware culture where employees do not feel it’s OK to ‘walk on by’ ignoring risks and opportunities. When project risks are identified, accountability is all about making sure that someone is responsible for each and every individual risk. In addition to understanding the risk inside and out and taking responsibility for whatever the mitigation plan may be, this person should also be reporting back to senior management regularly on progress.

Accountability is also about regular reviews of risks and opportunities. The risk process isn’t a one-off exercise – it has to become business as usual for Project Managers. Increasingly organizations are checking how ‘fresh’ risks are as an indication of how often PM’s are identifying new risks and updating the status of existing risk information. Using a single risk management system makes this possible.

Accountability is ultimately created by a culture of “no excuses” where sharing risks is a sign of strength, not weakness. By involving senior management directly and actively in periodic, rigorous examinations of a job’s status, PMs will feel responsible and comfortable enough to share both good and bad news– allowing corrective initiatives to be put into place before the risk escalates.

Project Risk Management software, like Active Risk’s Active Risk Manager (ARM), promote organization-wide, consistent processes and the delivery of accurate, reliable data so that PMs can anticipate risk and manage it more effectively. We are increasingly seeing organizations add risk identification and management to project KPIs and incorporate it into remuneration packages.

When we think about project risk and accountability, it is also valuable to think about how risks are connected.  Here new technologies have a major role to play. For example, Ron might be assigned to manage risks A, B, and C.  Mary may be assigned to manage risks X, Y, and Z.  Ron and Mary may never realize that risks C and Z are highly interconnected and could act as catalysts to trigger whole families of risks.  If your project risk is managed entirely by spreadsheets or disconnected systems, then senior management might not even get visibility of such connections across projects and programs.

Using a tool like Active Risk Manager Risk Connectivity, risk interconnections become clear via an interactive visual display.  Accountability can be assigned to manage down the risk or break the connections, something which was very difficult, if not impossible in the past. Click here to learn more about ARM Risk Connectivity.

How do you keep your project managers accountable and engaged in project risk management?  Can you see how risks are connected?

Leave a comment below or connect with us on Twitter at @ActiveRisk or @ERMTrends.

Skanska won the award for “Outstanding Contribution to the Risk Industry” for its pro-active risk management on the M25 London orbital road widening project. Read our latest case study to discover why their project was judged the best in the business and find out how Active Risk Manager underpinned the successful on-budget, on-time delivery of this time-critical project.

The Challenge: Deliver improvements to London’s orbital road infrastructure before the London 2012 Olympics or face £70m ($113m) in costs and liquidated damages

The Solution: Implement ARM Enterprise Risk Management software rather than hold risk registers in multiple spreadsheets

The Results: Project completed 8 weeks ahead of schedule and wins several risk management awards

Click here to read the full case study.