How to Make Your Construction Company More Resilient to Looming Problems

We make decisions about risk every day in our personal and business lives. For construction business owners (and everyone in the construction industry), bad outcomes can mean the difference between staying in business or not. Here are five risk myths that get in the way of thinking about important risks you may be overlooking—and accepting.

 1. Thinking about risk is for big companies.

It is true that the larger the company, the more resources and time can be spent taking a broader look at risk. But for smaller companies, risk can be much more dangerous. Your margin for error with limited financial resources and cash flow is more critical than for most large firms. Less resilience means you need to pay close attention and think about how you identify and manage risk for your firm. You can use simple, cost-effective risk tools in place of the expensive consultants, complicated analyses and dedicated internal teams that larger firms deploy.

Start with avoiding simple mistakes like overlooking things you know. How? Use checklists. Busy people who work with complex processes and systems are prone to forgetting a simple step, a required form, a critical safety check, etc. Those unforced errors can be costly. Dr. Atul Gawande wrote “The Checklist Manifesto” in 2010. He noted the dramatic effect checklists had on reducing and eliminating errors when used by doctors, pilots and even investment fund managers: “[T]hey chose to accept their fallibilities. They recognized the simplicity and power of a checklist.”

Too simple? You are already using one: your submittal schedule. Checklists can be made, refined and used for everything from corporate filings and license renewals to field issues like safety and equipment maintenance. The most important ones for your company should be your go/no-go checklist for project screening and your risk register for project-specific risks. Using checklists regularly for all your company’s operations will benefit your bottom
line, over and over.

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