Technical Engineering + Control = Success

Luc Keller, Risk Manager at Strukton Civiel, advises people to assess a project’s risks, not just its technical engineering aspects.

Contractors traditionally consider the substance and technical engineering aspects of a new contract the most important. Am I able to achieve it technically? Is it an attractive project substantively? Does it look good on my CV from a prestige and appearance perspective? All positive arguments, of course, but you can approach this from a different perspective as well. For example, can I make a profit on the project? Is the client’s schedule realistic and feasible? What could go wrong and who is then responsible?
I frequently used this approach while working for Rijkswaterstaat as a consultant for a period of three years. Rijkswaterstaat works in accordance with the Integrated Project Management Model (IPM), in which the five main processes of each project are managed by five different individuals. The model’s underlying concept is that project control plays an important role during all project phases. This means that you manage the entire project in terms of time, money and risks.

Risk-based Thinking 

I started working at Strukton in October 2018. One of the first things that struck me is that project control is not sufficiently integrated into the primary process. Strukton is a technical company centred on managing the technical aspects, while in my view technical engineering is only half the work. As far as I am concerned the other half, project control, should be given a far more prominent role. To accomplish this, my two colleague risk managers and I regularly join tenders and ongoing project meetings. For a tender it is very important to adopt a risk-based way of thinking. Do you understand what the client expects from you? Is the scope clear? Are we able to accomplish the work within budget and schedule? Do we expect to make a profit on the project? If we would have applied this yardstick to the A15 Maasvlakte-Vaanplein contract during the tender phase, we would not have started work on this project under the conditions set out in writing at the time.

Foreseen and Unforeseen

An analysis at the start of a project produces a list of time and money related risks. Let’s assume that you estimate these risks to represent five percent of the total project amount, say 5 million euros out of 100 million euros. I refer to these risks as foreseen unforeseen risks. You know that they exist, but you don’t yet know if they’ll occur. A good example of a foreseen unforeseen risk is a change requested by the client. 
In addition – and this is often overlooked – there are unforeseen unforeseen risks. You don’t know them in advance, but you can be almost certain that they’ll occur. Soil-related surprises, for example; in spite of all kinds of exploratory drillings, you unexpectedly hit rubble or contamination. A budget is required for this as well; generally just as much as for the foreseen unforeseen item, or 5 million euros. By including a risk budget for both types of risk we are less likely to be faced with surprises. And should the risk manifest anyway, you are in a better position to be able to financially absorb it.

Business-like and Pleasant

I enjoy being a linchpin in ongoing projects as well. I regularly meet with the involved parties. Initially one-on-one. I then ask questions, such as, what is keeping you awake at night, what can we do about this and whose responsibility is this? We then meet together with all team members to discuss the earlier identified sore points so that we can come up with solutions together. The impact of a meeting like this is much greater than one might expect. After all, nothing is as frustrating as having to work on a project that you already know is going to be loss-making. Why do it then?
A risk avoidance approach is not client-unfriendly. It is simply business-like. Much the same as when you ask the client to first sign off on the costs of additional work before you start doing the work. Business-like and pleasant, because of course we want to be of service to the client when they ask for changes to be implemented. 

Checking out the neighbours

My first impression of my Strukton colleagues is very good. There are many passionately obsessed professionals at Strukton, who, just like me, love working in this sector. What strikes me is that Strukton colleagues often are not aware of what their colleagues in other operating companies do. I consciously run tenders at Strukton Civiel and Strukton Rail and try to have lunch with people at Strukton Worksphere and Strukton International. I highly recommend my colleagues to spend time every day with a different operating company, just as I do. Through this connection you learn a great deal from other operating companies, and you can then take this knowledge back to your own operating company. This creates tremendous added value, certainly with a view to the growing number of projects jointly undertaken by different operating companies.