Effective risk management is crucial for ensuring project success. This is true for not only large, complex projects, but also small and less complex projects such as renovating the kitchen at one’s residence. Kitchen renovation is a project that may involve substantive expenditure, hence the need for proper identification, analysis, and mitigation of the associated risks. Generally, the major risks that may arise during the renovation of the kitchen relate to the following aspects: financial loss, damage, security, the contractor, and supply of inputs. For instance, there could be budget overrun, theft of supplies, accidents and injuries, delivery delays, and unfavorable weather. These risks must be carefully identified, assessed, mitigated, monitored, and controlled to ensure the kitchen renovation project succeeds. This paper provides a comprehensive risk management plan for the project. First, the top 20 risks associated with the project are identified, along with their likelihood of occurrence and impact on the project. Next, attention is paid to mitigation strategy. This section outlines the strategy or strategies for mitigating each identified risk. Risk response, monitoring, and control are addressed in the following section. Finally, critical success factors and implementation issues are highlighted.
Risk Identification and Analysis
The first step in the risk management plan involves identifying risks as well as assessing their likelihood of occurrence and impact on the project (Hardaker, Raud & Anderson, 1997). In the case of kitchen renovation, risks begin even before the commencement of the actual work. Most renovations go smoothly, but there are many issues that can arise, consequently affecting elements such as project budget, project schedule, and liability. Just to name a few, there could arise substandard work, undiscovered mold, dangerous materials from prior construction work (e.g. lead paint and asbestos), delays in project completion, delays in the delivery of supplies, vandalism, and unfavorable weather events. It is important to assess what could possibly happen, and who will be liable if/when those events occur.
After identifying the risks, an analysis must be carried out to ascertain the probability of occurrence and impact on the project. This can be achieved using quantitative or qualitative techniques, or both (Project Management Institute [PMI], 2008). In this case, however, the qualitative approach would be ideal. Quantitative techniques are usually applied in large, complex projects. Renovating a kitchen is arguably not a complex undertaking, hence the appropriateness of the qualitative approach. Qualitative risk analysis simply involves subjective assessments of the likelihood of risk occurrence and the possible impact of risk on the project. Table 1 summarizes the top 20 risks associated with the project as well as their probability of occurrence and impact on the project.
Table 1: Identified risks, likelihood of occurrence, and impact
Risk
Likelihood
Impact
General contractor is not competent enough to complete task adequately (Costa & Manning, 2005).
Low
Entire project
Project goes over budget and is completed in a much longer timeframe than what was originally projected (Costa & Manning, 2005).
Low
Entire project
Loss of money due to an accident or fire, litigation stemming from an accident or injury, and/or theft of supplies and tools (Costa & Manning, 2005; Freed, 2011).
Low
Entire project
Subcontractors hired are not competent, causing delays, problems, and loss of money.
Low
Entire project
Security guard hired is incompetent or unreliable: unable to protect the home and the construction site from losses and damages.
Low
Entire project
Crane operator is incompetent: causing delays and potential injuries and possible litigation (Nam & Kim, 2014).
Low
Entire project
Insurance agent is not competent.
Moderate
Entire project
Homeowner does not adequately increase the projected value of the home upon completion of remodeling.
Low
Entire project
Remodeling process exposes the home to damaging or distressing weather events (a hurricane, tornado, blizzard or even a heat wave could cause forced delays to the project and more expenditure) (HSB, 2017).
Low
Entire project
Work completed is not up to code or is otherwise unsound or faulty (HSB, 2017).
Low
Entire project
Poor communication with suppliers (this may cause, for example, delays in receiving supplies) and poor communication between the general contractor and owner (this may cause, for instance, confusion over the materials required) (Freed, 2011).
Moderate
Entire project
Deadline missed and team cannot finish project: new general contractor and subcontractors may have to be brought in who are not familiar with the project thus far or the work already completed.
Low
Entire project
If this is discovered during the job, it will be a major liability to the completion of the project as a whole (Paich, 2014).
Low
Entire project
Discovery of asbestos in pipes, ducts, or in the insulation of the furnace or in supplies such as the cement siding or in the floor coverings or in the spackling materials: this can cause massive delays along with potential litigation (Paich, 2014).
Low
Entire project
Home becomes riddled with toxicity: volatile organic compounds are used in many home renovation projects and can seep into the rest of the home, making it unsafe and hazardous, even causing illness or death.
Moderate
Entire project
Construction site becomes the target of vandalism: causing delays and added costs to the project, and creating an unsafe work environment (Will & Baker, 2007).
Low
Entire project
The risks identified in Table 1 are the ones that the project manager will prioritize. Risk prioritization is vital for ensuring resources are allocated where they are needed most (PMI, 2008). As seen in Table 1, the major risks associated with the kitchen renovation project have low to moderate likelihood of occurrence. Nonetheless, the impact of the risks could be significant, affecting the entire project. Major outcomes that are likely to be experienced in the event of risk occurrence include project delays, added costs, litigation, illness, injury, and even death. Hence, a comprehensive risk mitigation strategy is crucial for avoiding or minimizing these risks and their impact on the project.
Risk Mitigation
Risk mitigation essentially involves taking steps to avoid or minimize risk (Smith, Merna Jobling, 2014). It is the step that succeeds the risk identification and analysis stages, and entails planning responses to the identified risks. This results in a predetermined plan for addressing risks in the event of occurrence. Numerous measures will need to be taken to mitigate the risks identified in Table 1. One of the risks that may occur is damage to property as a result of events such as fire and bad weather. This risk can be minimized by, for instance, removing all items in the vicinity of the kitchen before commencement of work, hiring a competent contractor, and taking an insurance cover for property. Other risks relate to security of the site. Removing valuable items from the site, working with a competent contractor, and employing a diligent security guard can be effective ways of mitigating security risks. There are also risks relating to the contractor and subcontractors – e.g. poor workmanship, delivery of poor quality supplies, and delays in the delivery of materials. Hiring a competent contractor and subcontractors will be useful in mitigating contractor and supplier risks.
Risk mitigation involves not only specifying the risk mitigation strategy, but also the individuals or entities responsible for mitigating each identified risk (Dinsmore & Cabanis-Brewin, 2011). A construction project such as this one involves several stakeholders. The project involves the homeowner, the project manager, the general contractor, subcontractors, equipment operators, suppliers, and the insurance agent. All these stakeholders have important roles to play with respect to risk mitigation. For instance, the homeowner must conduct due diligence before hiring a general contractor to ensure the risk of contractor incompetence is avoided. Similarly, the general contractor should check the house for lead paint, mold, and asbestos to avoid or minimize the risks associated with these phenomena. Table 2 summarizes the measures that should be undertaken to mitigate each identified risk and the entities responsible for mitigating each risk.
Table 2: Risk mitigation strategies and responsibilities
Risk
Mitigation Strategy and Responsibility
General contractor is not competent enough to complete task adequately (Costa & Manning, 2005).
· Home owner will conduct due diligence (e.g. samples of work and checks with third party entities) to ensure a licensed, competent, and insured general contractor is hired;
· Homeowner will rely on…
