Guest blog: Karlene Agard is an award-winning specialist in risk and value management who consults on large infrastructure projects and speaks at conferences internationally through her company, ARAVUN.
Twenty years ago, the mantra: “No-one ever got fired for buying IBM” reflected common thinking that the tried-and-tested path was the only one worth taking.
But rigidly following someone else’s rules has its own perils.
A report by McKinsey recently estimated that the world needs about 57 trillion dollars’ worth of infrastructure by 2030. No-one ever delivered a truly innovative infrastructure project without challenging the status quo, and when you’re operating at scale, you need to be comfortable looking at least a decade ahead: making calculated projections on what future customers will need and want.
In our high-tech world, taking too conservative an approach will cost you dearly.
But what does this mean for risk and value? How do harness your risk management to optimise the potential opportunities?
This month, I’ve been working with East West Railway Company who are building a new rail link between Oxford and Cambridge with a remit straight from government to positively disrupt the railway industry.
Their company values are unique too, encouraging the team to walk in the shoes of their customers, be open and, crucially, to be bold.
Boldness is revolutionary in an industry often seen as out of date. For the team delivering East West Rail, it could involve tech-related innovation – using green energy to power trains, mobility simulation to identify great accessibility, drones to more safely and efficiently inspect infrastructure, or exploring financing and ownership options which deliver the best social and economic benefits.
I was asked by one of the team if there was tension between this value of boldness and adopting principles of risk management. Was it an inhibiting factor? Quite the opposite. It’s imperative to map, measure and manage risk if you’re looking to do things differently.
In the start-up community, failure is actively embraced as a credible way of moving forward and eliminating dud ideas. When it’s tax-payer’s money at stake, the goal-posts are – rightly - somewhat tighter.
There’s a sweet-spot of validating genuinely forward-thinking approaches but performing the due diligence to ensure they deliver value.
I tell my clients to embrace risk management because it liberates you to think big but also disciplines you in a very mature way to make informed decisions and own the potential consequences.
I’ve enjoyed my time with East West Railway Company because people right across the organisation are encouraged get up to speed with this subject – not just the senior decision-makers. The team has opened up to a new way of thinking using risk as a driver to challenge what’s gone before. Applying this approach is a brilliant way of helping to make sure this unique infrastructure project stays relevant to the communities it serves long into the future.