Surviving Failures: Lessons from Field Study

Abstract

This paper presents the results of a field study of a sample of 15 projects and an equal number of organizations in the Federal Republic of Germany. The study objectives are firstly to elucidate typical approaches currently taken to technical and technological risks in engineering projects; and secondly to see if the existing concepts and techniques can be improved further. The work indicates that there is a need to radically revise the attitude and approach to identification, assessment of the impacts, and “engineering out” or mitigation of these risks. A major finding not widely recognized concerns the relationship between risk reduction and business profitability. A case is made for the introduction of a proactive management policy to technical and technological risk control involving the entire organization. Case material shows that the acceptance of risks by construction contractors in depressed market conditions is a deadly gamble, as it will inevitably lead to severe cost penalties. An alternative approach based on a higher level of risk assessment and work organization is presented in this paper. For this to be successful, adoption of a different management philosophy is required.