Why engineers need to learn to take risks
Big infrastructure projects can provide a talent magnet for the engineering profession, says Steve Fowler, so long as engineers appreciate the importance of risk.
The Institute of Risk Management is currently helping to publicise and publish a document from HM Treasury and the UK Infrastructure Risk Group (a body that brings together leading individuals from construction and engineering firms) on ways to save billions on the costs of major infrastructure projects across the UK.
These aren't small savings or small projects. They include HS2, Birmingham's Big City Plan, the Thames Tideway Scheme, Stratford City and Crossrail - the largest engineering project in Europe - as well as wind farms, motorway improvements, grid connections, tunnels and gas pipelines. Indeed, £100bn has been set aside for infrastructure investment by 2020.
While it could be said that we have already found a way to save money on these projects by not having enough engineers to complete, or even start them, the real risk comes from current and future engineering generations failing to appreciate the importance of risk to their work.
To address the shortage of engineers, the IET, along with the Institutions of Civil and Mechanical Engineers, has established a scheme to produce an additional 100,000 engineering technicians by 2018 that was officially launched by prime minister David Cameron in June. This is a significant start, but many engineers turn to other professions. So the challenge is threefold: recruitment, retention and ensuring that people have the right appreciation of risk. How do you attract the right people and ensure they stay? Furthermore, how do you ensure that the 100,000 recruits have the requisite risk understanding to survive and thrive in today's challenging and often uncertain business environment?
These questions are particularly pertinent when you consider the current engineering landscape. The IRG research, featuring input from IRM members, uncovered a range of concerns around major infrastructure projects and risk management approaches.
These include parties 'gaming' their risk estimates to secure work, tortuous risk fund release processes, risk mitigation being discouraged by organisations worried about budgetary cuts, and a widespread lack of shared understanding of risk management. In short, engineering firms are deliberately underestimating risk and avoiding risk mitigation to protect their budgets. Money and securing the job comes first.
As with any successful project or idea, good engineering will always involve risk, and any successful project will have risk management at its core. Today's marvels are yesterday's calculated gambles. Good risk management awareness can help engineers keep projects on time and on budget, and reduce the potential impact of a negative event, but engineers should be conscious that risk can never be completely removed.
One of my key aims as IRM's chief executive is to stop people associating risk management with the downside. Or to put it another way, with the stories you see in every single newspaper each day. Whether it be it the 'death rays' from the 'Walkie Talkie' skyscraper, banking's cultural issues or the decline of an established firm such as Kodak, risk is all around us.
We are shifting the perception of risk to one where effective embedded risk management can be seen as a cornerstone of a well run organisation. This can reinforce the importance of effective risk management.
The difficulty with risk management is that when done well it is hard to prove just how good a job you did. The opposite is true in engineering. As long as these stories are found, and the good work that engineers do is effectively communicated, the future for both the UK and engineering looks bright.
At an IRM conference earlier this year, land speed record legend Richard Noble, now working on the Bloodhound project's attempt to shatter the 1,000mph barrier by 2015, said he hoped the project would inspire the next generation. Noble's work can only help attract people to the profession. As the saying goes: if you build it, they will come.
Steve Fowler is CEO of the Institute of Risk Management (www.theirm.org).
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