★What's risk?
Project risk is simply defined as any possible event that can negatively affect the viability（可行性） of a project or an estimate of the probability of loss from unwanted circumstances.
Risk = Probability of event x Consequences of event
风险值=风险发生概率×风险发生后的后果（损失）
视频：什么是风险？
★Project risk types?
1.General risks（常规风险）
Financial: the project will cost more than the allocated money, or it will cost more than the product itself is worth.(Estimates are only estimates. They are not purchasing prices. As time goes by, the condition will change, many factors will affect the prices of materials and labor, for example, the bankruptcy of a giant steel mill will change the steel price.)
Time: the project will not be completed within the planned time. (Strikes（罢工）, poor working relationships, extreme weather conditions, site accidents are all risks that are difficult to predict and control. All can cause serious overruns in money and time during construction.)
Design: the project will not perform the function it was designed for or more commonly will perform the function in a degraded manner（质量打折扣）.
Quality: the project will have poor quality materials or workmanship.
2.Project-specific risks （项目特有风险）
In addition to general industry risks, there are specific risks that all owners and designers and constructors must take into account during their work.
▶Separated function（功能不匹配）:A design change after construction is disastrous, which can cause considerable increase in cost and time. Conversely,if a contractor makes a filed change that is not included in the design, the building may not function as well as intended. So the two primary professionals (designer and constructor) communication is the key to project success.
▶Scope change(范围变化）:The scope of work on a project can be defined as the quantity and the character of the work. For instance, imagine that 1000 square meter of 1 inch gypsum wallboard（石膏板） defines the work of a drywall subcontractor（干墙分包商）. If the quantity increases to 1100 square meter or the thickness to 1.5 inch, then the scope of work increases. Scope of work is the primary determinant of costs on a project.Any changes of the work scope can lead to the change of costs. If scope increases, cost also increases.
▶Poor stakeholder management （项目干系人管理不善）(expecially the external stakeholder) Every project has neighbors who may or may not be pleased with the idea of a new facility in their community, then this will lead to site-risks（项目选址风险）. Environmental, political, and social groups that can have a positive or negative effect on the project’s development and launch.（项目选址风险背后的逻辑：邻避效应指居民或当地单位因担心建设项目(如垃圾场、核电厂、殡仪馆等邻避设施)对身体健康、环境质量和资产价值等带来诸多负面影响，从而激发人们的嫌恶情结，滋生“不要建在我家后院”的心理，即采取强烈和坚决的、有时高度情绪化的集体反对行为。
★What's risk management？
Risk management is defined as the art and science of identifying, analyzing, and responding to risk factors throughout the life of a project and in the best interests of its objectives
Risk management consists of anticipating, at the beginning of the project, unexpected situations that may arise that are beyond the PM’s control. Risk management questions:
▶What is likely to happen (the probability and impact)?
▶What can be done to minimize the probability or impact of these events?
▶What cues will signal the need for such action?
▶What are the likely outcomes of these problems and my anticipated reactions?
★Risk Management process: a Four-Stage Process
Risk identification – the process of determining the specific risk factors that can reasonably be expected to affect your project(Methods of risk identification:Brainstorming,Expert opinion,Past history,Multiple (or team-based) assessments
Analysis of probability and consequences – the potential impact of these risk factors, determined by how likely they are to occur and the effect they would have on the project if they did occur
Risk mitigation strategies – steps taken to minimize the potential impact of those risk factors deemed sufficiently threatening to the project (Four possible alternatives to address risks:Accept risk: a project team must always consider is whether the risk is sufficiently strong that any action is warranted; Minimize risk;Share risk: risk may be allocated proportionately among multiple members of the project;Transfer risk: shift risks bound up in a project to other parties if they can not be eliminated)
Control and documentation – creating a knowledge base for future projects based on lessons learned
视频：what's risk management about?（6 questions to explain)
Script （讲话稿）
00:00
People say to me, what's risk management really all about? Surely it's a lot to do with probability and statistics（统计） and a complex process that's very difficult to apply. I disagree. I think managing risk is one of the most natural things we can do. And one of the most important for me, risk management is essentially asking and answering six basic questions. And the questions that everybody wants to ask, no matter what situation they're in, whether it's a personal dilemma(进退两难）, a project process or some kind of organizational decision.
00:35
The first question is, what we try to do? That really leads us into the first step of a risk process, which is objective setting（目标树立）, understanding the scope and the context and the environment within which we have to manage risk. So what am I trying to achieve? Is the first question. It's the first step of the risk process. Once we know what we're trying to achieve, the second question is, what might affect me? Are there things out there in the future which could either hinder（阻碍） me achieving my goals or maybe even help me? And that question, what might affect me is our step into risk identification（风险识别）, finding the uncertainties that matter, the future events, which if they occurred, would help or hinder as we try to achieve our goals.
01:20
The third question is that not all of those things we've identified are equally important. So，my third question is, which of those things that might affect me are the most important that leads us to the step of the risk process that we call risk assessment, risk evaluation, or risk analysis. Try to prioritize（优先） those things that might affect us in two key dimensions（两个维度）. How likely is it to happen? And if it did happen, what effect could it have on our goals? Either positive or negative? Because threatening risk includes both threats and opportunities. Our first three questions are, what am I trying to achieve? What might affect me and which are the most important ones that gives me a prioritized list of uncertainties that matter. Now, the 4th question, what should we do about it? This is really important，because otherwise（否则） we're just the victims of uncertainty and things might happen on our projects which we weren't expecting. So now we know what the key risks are. We can do not design some responses. We could try on bad risks to avoid them or minimize them or protect ourselves. For good risks, we could try to maximize or exploit（利用） them or to make ourselves or position ourselves to be better able to exploit them or to use them if they happen.
02:38
Our 4th question, what am I trying to achieve? What might affect me, which are the important ones and what should I do? Then we have to do what we said we do, and our 5th question is, did it work? Often we find that the actions that we plan to take in response to risk are not actually achieving what we did want. We might need to modify our approach. And the last question, which is really important. Question six, what changed , project’s life business is constantly changing very dynamic, and we need to make sure that we spot（认出，注意到） the new risks that have arisen since the last time we looked ，since the last time we took action.
03:20
Now I think those six questions are easy. They're intuitive（直观的）. They're the sorts of questions that anybody would ask in any important situation. What am I trying to achieve? What might affect me, which are the important ones? What can I do about it? Once I've done that, did it work? What's changed? If we build our risk process around those six simple questions, then it becomes easy to do. It becomes an intuitive and natural process that doesn't involve lots of bureaucracy（官僚）. Lots of forms. Lots of statistics. We're just asking and answering important questions.
03:50
Of course ,on a bigger project, we might want to apply those six questions at a more detailed level with templates（表格） and tools and modeling and all sorts of other approaches. But as at its roots, whether we're trying to put a man on the moon or we're trying to move from one side of the office to the other ,a complex project or a simple project, the same six questions apply.
So next time you're tempted to think that risk management is really difficult, just remember the six questions, ask them, answer them and manage your risk.
视频：what's risk management?
★How to minimize risks in constrcution project
▶A thorough feasibility analysis
▶Choose the right delivery method.
▶Choose a proper contract type (e.g. Fixed-price contracts for budget overrun risks)
▶Monitor the entire process. (It can effectively prevent the tricks played by the contractor or the constructor, for example the risk of quality).
▶Improve stakeholder management
Conclusion
Because no two projects are exactly alike, each project is facing different risks, so an owner has to choose the right delivery method and contract type to match the project. Each method has advantages and disadvantages. It is the owner's task to maximize each method and type's advantages and minimize the disadvantages. The best way to do this work is examine the project risks.
Discussion
