Mastering Project Controls – Series Part 6: Risk Management: Anticipating the Unexpected
Introduction: Risk Is Inevitable—But Being Unprepared Is Optional
Every capital project is a balancing act between ambition and uncertainty. No matter how well-planned, every initiative—from hospital towers to data centers—encounters risk. Some risks are foreseeable. Others lurk beneath the surface, ready to disrupt cost, schedule, and scope.
Yet while risk is unavoidable, failure is not.
At Albers Management, we believe the difference between project success and failure often hinges on one thing: how well you anticipate, quantify, and actively manage risk. That’s why risk management isn’t just a checklist—it’s a discipline woven through the entire project lifecycle.
In this article, we unpack the full lifecycle of project risk management and how we, as Owner’s Representatives (OR), embed control without creating drag. Whether you’re delivering a flagship medical center, a hyperscale facility, an Electric Vehicle factory, or a corporate HQ, this guide is designed to help you expect the unexpected—and stay in control when it counts.
What Is Project Risk?
Project risk refers to any uncertain event or condition that, if it occurs, can negatively (or positively) affect a project’s objectives. Risks may impact scope, schedule, cost, quality, safety, or reputation—and they exist across every phase, from pre-development to closeout.
Common Types of Risk:
Strategic Risk – Changes in leadership, shifting organizational priorities, lack of alignment
Design Risk – Incomplete programming, undefined scope, misaligned performance criteria
Procurement Risk – Bidding delays, supply chain disruption, lack of competition
Construction Risk – Safety incidents, site conditions, subcontractor performance
Cost Risk – Material escalation, change orders, contingency depletion
Schedule Risk – Permit delays, labor shortages, sequencing conflicts
Environmental/Regulatory Risk – New code enforcement, unforeseen remediation
Reputational Risk – Community opposition, bad press, political fallout
Key Insight: Not all risks are created equal. Knowing where risk tends to concentrate—and how it behaves—is critical to building a proactive control strategy.
Why Risk Management Matters More Than Ever
Projects are growing larger, more complex, and increasingly integrated across functions. At the same time, economic, labor, and regulatory volatility is accelerating. The margin for error is shrinking.
Without a proactive and scalable risk management approach, even well-funded projects can:
Drift off course due to slow decisions
Absorb unnecessary costs
Fall behind schedule due to unmitigated delays
Damage stakeholder trust or reputation
According to a McKinsey Global Institute study, large construction projects typically take 20% longer to finish than scheduled and run up to 80% over budget—often due to poor risk controls.
The Risk Management Lifecycle
At Albers, we structure risk management across five distinct phases:
1. Risk Identification
We work collaboratively with the Owner and key stakeholders to identify potential risks early. This includes:
Historical reviews of similar projects
Interviews and brainstorming sessions
SWOT analysis
Assumption tracking
We flag “known unknowns” and establish an evolving risk register that becomes part of the project’s living documentation.
2. Risk Analysis
Each risk is assessed for:
Probability (how likely it is to occur)
Impact (how severely it would affect the project)
Urgency and proximity
Risks are plotted on a Probability x Impact matrix, and quantitative methods (e.g. Monte Carlo simulation, PERT analysis) may be used to model potential cost/schedule variation.
🧠 Tip: Assign dollar
and day values to risks where possible. A vague risk won’t motivate decisive action—but a risk tied to $3.4M in exposure will.
3. Risk Response Planning
We work with clients to develop clear strategies:
Avoidance – Adjust project strategy to sidestep the risk
Mitigation – Reduce likelihood or impact
Transfer – Shift responsibility (e.g. via contract clauses)
Acceptance – Acknowledge and plan to absorb if it occurs
Each top risk is assigned an owner and action plan.
4. Risk Monitoring and Control
Risk logs and dashboards are updated regularly—often monthly or tied to key decision gates. As part of our controls workflow, we track:
Risk burn-down rate
Changes in exposure
Emerging risks
Triggers that convert risks to issues
5. Lessons Learned
After project closeout, we host debriefs to:
Review which risks materialized
Evaluate response effectiveness
Build institutional memory
This feedback loop improves organizational resilience across the portfolio.
| Risk Category | Example | Recommended Response |
|---|---|---|
| Schedule | Permit delay | Track proactively with agency escalation plan |
| Cost | Steel price spike | Lock pricing via early procurement |
| Scope | Late user revisions | Freeze programming after sign-off milestone |
| Resource | Subcontractor underperformance | Prequalify bidders + retain backup |
How We Add Value as Owner’s Representatives
Our role isn’t just to identify risks—it’s to build a structure where risks are:
Seen early
Tracked systematically
Escalated with clarity
Converted into decision-ready insights
We do this by integrating risk management into every service we provide:
Strategic programming
Business case development
Delivery model selection
Cost/schedule management
Scenario planning
Stakeholder communication
We also use tools like:
Risk-adjusted budget models
Scenario dashboards
Visual risk heat maps
Contingency drawdown logs
What Makes a Good Risk Culture?
A healthy project culture treats risk management as a strategic asset, not just a compliance function. That means:
Encouraging open sharing of concerns
Rewarding early risk identification
Viewing mitigation as value creation, not blame assignment
“The earlier you talk about risk, the more options you have.”
Final Thoughts: Resilience Is Built, Not Hoped For
The most successful capital programs aren’t the ones with zero risk—they’re the ones with the right mindset and systems to handle it.
By embedding structured, transparent, and proactive risk management into your delivery model, you protect not just your project—but your people, mission, and reputation.
At Albers, we’re here to help you build that resilience.
Next-Level Insights Coming Soon
We’re expanding this short blog into a full-length guide covering strategic forecasting, risk modeling, and cost governance in complex capital projects.
Get Notified When It DropsWant a deeper, behind-the-scenes perspective?
Read the personal blog version by David Gray:
What Are Project Controls? – DavidGrayProjects.com
About the Author
David Gray is a principal at Albers Management and a national expert in capital program delivery. With experience managing over $20B in complex infrastructure and healthcare projects, he leads with strategy, structure, and service.
Outside of Albers, David shares long-form insights and behind-the-scenes lessons at DavidGrayProjects.com, where he writes about project strategy, leadership, and the future of infrastructure.
Visit DavidGrayProjects.com →