They fail because of unmanaged risk.
Not dramatic failure.
Not structural collapse.
But budget erosion.
Schedule drift.
Scope creep that slowly becomes “normal.”
Risk in engineering projects is rarely catastrophic.
It is cumulative.
And cumulative risk is what destroys predictability.
Table of Contents
Risk Is an Exposure, Not a Feeling
In project management, risk is defined as an uncertain event that can impact scope, schedule, cost, or quality.
But in practice, risk is exposure.
Exposure to:
Incomplete design information
Contractor exclusions hidden in fine print
Unrealistic productivity assumptions
Regulatory dependencies
Interface gaps between disciplines
If exposure is not measured, it becomes invisible.
If it becomes invisible, it becomes expensive.
The Difference Between Listing Risks and Managing Them
Many teams create a risk register at kickoff.
Few teams actively manage it.
Effective risk management requires discipline:
Identification – Capture risks early, especially during design and procurement.
Qualitative analysis – Assess probability and impact realistically, not optimistically.
Quantitative thinking – Translate impact into cost and time exposure.
Response planning – Avoid, mitigate, transfer, or accept — deliberately.
Ongoing review – Reassess at every phase transition.
If a risk register is not reviewed regularly, it loses its purpose.
A risk register that influences decisions is governance.
Contingency Is a Strategy — Not Padding
Contingency reserve should reflect known risks.
Management reserve protects against unknowns.
When reserves are based on analysis, forecasts become credible.
When reserves are arbitrary, forecasts become hope.
Hope is not a control mechanism.
Action Step
Review one active project and verify:
Is the risk register current?
Are probability and impact clearly assessed?
Is contingency directly linked to identified risks?
Are risk owners assigned and accountable?
If these elements are outdated or unclear, risk management is not active — it is administrative.
Effective risk management is continuous and must influence real decisions throughout the project lifecycle.
P.S. Forward this to someone leading complex engineering projects — and subscribe if you haven’t already.
Until next Saturday!
