David Law, chief risk officer for the Olympic Delivery Authority, was tasked with preventing and mitigating the biggest risks likely to disrupt the construction of the Olympic park in London’s East End. Here’s how it did it
As the Rio 2016 Olympics and Paralympics Games in Brazil edges closer, project managers, construction businesses and the Game’s risk team would be wise to review the stringent risk processes adopted in London three years ago in constructing the grounds for London 2012 Olympic and Paralympic Games.
The success of the London Games continues to serve as an example of project risk management at its best. After years of planning, the Games finally took place amid worldwide acclaim. The capital successfully staged two Games that defied media cynicism and public anxiety about security and transport, and brought some relief to a recession-hit nation.
But the task was no mean feat, according to David Law, chief risk officer for the Olympic Delivery Authority. Law was responsible for managing a multitude of risk that could compromise the delivery of the games, not least its reputation.
The ODA was established in 2006, with responsibility for building the sports venue, infrastructure and planning and funding transport for the Games, within its £7.2 billion budget. It also had an additional goal: to host the “greenest games” ever. This required construction businesses and its manufacturers and suppliers to think outside of the box, source innovative products and processes to ensure this aim came to fruition.
The risks to these targets were great, with a heavily contaminated site, worsening economic conditions, multiple stakeholders and the eyes of the world’s press ever present.
Key to the success of the ODA’s approach was a strong risk management framework. This comprised a clear risk hierarchy, detailing the responsibilities of individuals within the risk team, to ensure the right people were tasked with managing the right risks; a robust quantified risk analysis controlling contingency allocation and a healthy balance of review, assurance and audit promoting an ‘honest’ culture of risk awareness.
Law’s first task was to conduct independent risk compliance reviews of 40 of the authority’s projects, to obtain a clear vision of the biggest risks to the London Olympic Games.
Indeed financial risks and keeping to budget was at the forefront of his mind. “Throughout the programme we were mindful that the ODA was responsible for a significant amount of public funding (some £7.1bn),” he said. “We had a duty of care to demonstrate that we were managing this effectively and achieving savings through sound risk management.”
The next major challenge was overcoming barriers to innovation.
In a learning legacy paper, the Construction Products Association and the Building Research Establishment (BRE) found that risk was a major barrier to innovation, with designers, contractors and project managers voicing concern over using new and untested products.
They felt that deliverability and performance could be compromised and that further risks related to professional indemnity, liability and reputation damage could arise from these ‘untested products’.
“On the Olympic Park, it was especially challenging to convince project managers to agree to the use of innovative solutions, as they were incentivised by programme and delivery,” he explained. “The high profile nature of the Games and the immovable deadline meant that these risks were actively managed and often shared.”
Knowing that the timetable was immovable, the ODA decided to complete the park 12 months prior to the start of the Games to allow for snagging and give time to test the venues. “We were monitoring the effectiveness of the individual management of each programme, ”said Law. “We were reporting regularly on the various scheduled performance index measures that allowed us to ascertain the performance of each project at any one point in time. As a whole, the programme has probably been one of the best examples of British construction that you could possibly dream of.”
Ahead of schedule
As a result of this strategic planning, many of the major venues were completed ahead of schedule. The new London velopark hosted the UCI Track Cycling World Cup Classics in February this year, while the London aquatics centre, which was completed in February 2011, had hosted several events prior to the Olympic qualifiers. These international competitions enabled the London Organising Committee of the Olympic and Paralympic Games (LOCOG) to examine factors such as the field of play, results, scoring and timing systems, as well as key operational procedures and functions long before the flame was lit in the Olympic Stadium.
The success of the Games can be measured in terms of its legacy. Although the Games were delivered over budget, the 2012 events can be held as a proud example of risk management at its best. As Law summed up: “Some of the most significant sustainability achievements derived from the site-wide framework agreements, where the ODA took an active role in encouraging industry practice and managing risks on a park-wide basis.”