1.5.1 Risk identification
The risk identification stage has received the least attention in the literature on risk. Many rofessionals who have accumulated some experience of carrying out risk analysis on capital projects find that the identification stage is the most time consuming. Identification of risks internal and external to the project requires that the analyst be systematic, experienced and creative. It is frequently the case that the best way to gain access to this range of personal qualities is by assembling an appropriate team. It is not realistic to expect 20/20 foresight. Construction professionals are required in law to exercise reasonable care and skill in carrying out their work. The identification of risks is about making the
best use of the information and experience available at the time of making the decision. In practice I have found that it is useful to work closely with the project team and to consider explicitly at least three separate areas: 1. Risks internal to the project, by breaking the project down
into major work packages. 2. Risks external to the project and emanating from the business
and physical environment.3. Consider the client, the project, the project team and the quality
of the documentation from the perspectives of the various contractors in anticipation of sources of claims. It may be necessary to consider the use of a formal technique for teasing out an exhaustive range of potential problems. Formal brainstorming is sometimes used in this context. A
formal brainstorming session should have a set of clear rules and a timetable. A coordinator should be appointed, and it is essential that he or she has two qualities: the ability to chair meetings and a sense of humour. The first stage is the creative session where the coordinator elicits one idea at a time from
individuals on potential risks or sources of risk. Individual team members are not restricted to their own knowledge domain. The rule of this stage is that no criticisms of ideas or people are allowed. Outlandish suggestions are encouraged. A list of suggestions is maintained on a flipchart or similar device. As the list contains no names, there is no way of associating any particular idea with any particular member of the team. Stage two of the session is quite different in character; it is the
evaluation stage, when all the ideas are evaluated seriously and a final list is made. The list is the product of the team rather than the individual members. Two other aspects of risk identification are worth mentioning here. First, if the team members are committed to the project and motivated towards achieving a successful outcome overall, then the whole process of risk analysis should be a positive
experience. Someone once said (not about risk analysis), ‘If it isn’t fun then you probably aren’t doing it right’. Second, it is sometimes argued that risk analysis encourages negative and cautious attitudes among the team or the project sponsors. If this is happening it needs to be taken seriously and examined closely to ascertain whether it is a realistic assessment of the problems associated with the project. At the same time the analyst needs to maintain some distance from the project in order to
avoid ‘falling in love’ with it. This affliction will be dissected more fully in Chapter 8.