“Risk comes from not knowing what you`re doing.” – Warren Buffett
We always hear the word ‘risk’, but when we stop to think about it, what does risk truly mean? In a nutshell, risk is any chance or possibility of something undesirable happening. And when we talk about undesirable events — especially in construction workplaces, we’re talking about accidents that can result in very serious injuries or worse, death, for workers.
There’s good news and bad news when it comes to risk. I’ll break the bad news to you first: you can’t eliminate it. If you or your company want to achieve something meaningful, you will need to take risks. As one of the most basic principles of financial management goes, the higher the profit you want to earn, the higher the risks you’ll need to take.
The good news – yes, there is good news – is that risk can be managed well so when it comes to pass, you’ll be able to minimize its effects. The practice or process of minimizing risks and it’s potential effects to your company and workers is referred to as risk management.
Why Risk Management?
There’s a saying that ignorance is bliss; I disagree. It can be dangerous or even downright fatal. The Bible says in Hosea 4:6 that “My people are destroyed for lack of knowledge.” Regardless whether you’re a Christian or not, you probably would agree that said passage carries a lot of truth. If you don’t know that something bad may happen to your company and your workers, how can you prepare well for it — i.e. minimize the possibility of it happening or if it’s an unavoidable certainty, prepare to minimize its impact?
A very good example of risk minimization in the construction workplace is requiring construction workers to wear steel-toed boots. It practically eliminates the risk of them accidentally cutting off their toes with very sharp tools or by having something really heavy or sharp fall on their toes. In a sense, it’s also a very good example of minimizing the impact of risks should they materialize because the steel-covered toe areas of their boots would be strong enough to keep very sharp tools or equipment from cutting through the boots and consequently, their toes.
Assessment: A Crucial Component
While there are probably million-and-one risks present in the construction workplace, it’s neither practical nor possible to address all of them. It may not be so even for just most of them. It won’t just be too expensive but it will also take a lot of time and effort to do so, which may render it impossible to get anything construction-related done at all. That’s why it’s important to choose your risk management battles through a process called risk assessment, which is one that tries to estimate both the probability and impact of risks that companies and their workers face. Through risk assessment, you’ll be able to determine which risks do need to be managed and which ones to just let be. By identifying key risks and their potential impacts on the company and workers, you can maximize the company’s resources and manpower in terms of productivity and worker safety and health.
Especially in construction workplaces, many things can go wrong and depending on what those things are, the impact on both the company and its workers can be substantial. Failure to plan is planning for failure, and a very important aspect of effectively planning for these things is learning and implementing risk management activities in your company’s construction workplace.