In every branch or workplace project you take on there exists a constant companion: risk. Risk can be the proverbial shadow that follows us. Sometimes it lurks in the shadows, yet at other times it looms large and casts doubt over our decisions.
The key to successfully managing risk is understanding that risk is not merely a foe to be conquered, but a fundamental component of facilities management. One that we must learn to understand, navigate, embrace and learn from.
What is Risk?
At its core, risk is the probability of an unfavorable outcome or deviation from the expected result. It is the uncertainty that accompanies any action or decision, influenced by a myriad of factors such as chance, time, cost, complexity, and perhaps even the limits of an organization’s management capabilities.
Let’s take a look at a few examples of issues that introduce risk to a project.
- We aren’t sure how to effectively address the permitting process, cost escalation, equipment deliveries and contractor availability, and we are deep in the process of developing budgets for board approval.
- How do we gauge if our buildings’ envelope (insulation, roof and glazing), HVAC systems, lighting and energy generation systems are at the end of their useful life?
- How do we most effectively locate land or a purchase a building which will address our operations and administrative growth needs?
- Is the design of both our branch and operations facilities reflective of our brand and do the designs help to support member/customer service, staff retention and recruitment efforts?
- How do we renovate and develop branch and operations facilities in a highly competitive business environment, when we know that institutions such as CHASE, PNC, Navy Federal and other regional competitors, are investing heavily in both their retail network and their digital banking offerings?
These issues present risk exposure to the project and challenges to a credit union.
However, if these concerns are approached early on and the risks are managed effectively from a position of knowledge and strength, one can clearly see where there might be immense opportunities for adding value and achieving project success.
Embracing Uncertainty
Our natural inclination is often to minimize or eliminate risk altogether, seeking safety and security in what we might define as the familiar and the predictable. However, in the increasingly complex and interconnected facilities world such a position is not only impractical, but also limiting.
Embracing risk means acknowledging the inherent uncertainty of our circumstances and that there are only four tactics in addressing risk: we can either eliminate, mitigate, transfer or accept risk.
Seasoned project managers know quite well that ignoring risk is not a viable fifth tactic.
The key to successfully managing risk is understanding that risk is not merely a foe to be conquered, but a fundamental component of facilities management. One that we must learn to understand, navigate, embrace and learn from.
Managing Risk
While most facilities related risks cannot be eliminated in their entirety, risks can be managed and mitigated through a process involving thoughtful planning, informed decision-making, and resilience in the face of adversity. Risk management involves identifying potential threats, assessing their likelihood and impact, and implementing strategies to minimize their negative effects, while also capitalizing on possible opportunities that arise.
Embracing risk entails adopting a mindset of experimentation and learning, which sets up the development of successful branch designs and prototypes, branch network strategies, and effective workplaces.
Project roadblocks and setbacks can also provide us with valuable insights and lessons learned that can inform a management teams’ future actions, and ultimately lead to greater success and improvement for the organization.
Balancing Risk and Reward
In navigating the world of risk, it is also essential to strike a balance between caution and boldness, prudence and ambition. While excessive risk-taking can lead to catastrophic consequences, excessive risk aversion can stifle an organization’s innovation and growth.
The key lies in making informed decisions based on a thorough understanding of the potential risks and rewards involved, weighing the probabilities and consequences, and being prepared to adapt and course-correct as circumstances evolve.
Embracing the Unknown
Ultimately, embracing risk is about embracing the unknown and recognizing that it is often in “uncharted waters” that the greatest opportunities lie. Whether in our careers as facilities managers, or in our collective endeavors as an organization, it is our willingness to confront uncertainty and to managed calculated risks, that enables us to achieve our fullest potential from both a personal and an organizational perspective.
In closing, risk is not something to be feared or avoided, but rather a natural and inevitable aspect of managing a successful strategic facilities plan. By embracing uncertainty, managing risk effectively, and seizing opportunities as they arise, we can chart a course towards a successful facilities plan, where the rewards of our challenges, far outweigh the uncertainties that accompany them.
