Kitchen Renovation Risk Management: Issues and Opportunities

Introduction

Effective risk management is crucial for ensuring project success. This is true not only for large, complex projects, but also for small and less complex undertakings such as renovating a kitchen at one's residence. Kitchen renovation is a project that may involve substantive expenditure, hence the need for proper identification and mitigation of associated risks. The major risks associated with kitchen renovation revolve around aspects such as contractor and project manager incompetence, budget overrun, delivery delays, theft of supplies, accidents and injuries, unfavorable weather, insurance inadequacy, and poor communication between stakeholders. With a low to moderate likelihood of occurrence, these risks can be mitigated using strategies such as thorough evaluation of the contractor and project manager before selection, selection of a sufficient home insurance package, employment of a security guard, and ensuring effective communication. Nonetheless, implementing a formulated risk management plan may not be a straightforward endeavor, as unexpected issues may emerge. This paper highlights the critical success factors as well as the issues and opportunities associated with implementing the identified risk mitigation measures.

Critical Success Factors

Critical success factors (CSFs) are factors that must exist or go right for project success to be achieved (Project Management Institute [PMI], 2008). Most of these factors are usually beyond the project manager's direct control. As must-haves, CSFs should be closely monitored throughout the implementation process (Kendrick, 2009). Three CSFs in this case include project funding, stakeholder commitment, and effective communication.

Project funding denotes the financial resources required to accomplish the kitchen renovation project. For instance, funds will be required to procure construction supplies and hire subcontractors. The project owner should ensure the required resources are available whenever needed. This will be crucial for avoiding or minimizing delays in project completion.

Stakeholder commitment refers to the dedication of stakeholders to the project. The importance of strong stakeholder commitment cannot be overemphasized (Dinsmore & Cabanis-Brewin, 2011). It takes several stakeholders to accomplish a project: the client, the project manager, the general contractor, subcontractors, and so forth. In this case, key stakeholders include the homeowner, the project manager, the general contractor, the insurance agent, and the security guard. Commitment from every one of these stakeholders will be important to the success of the project. Commitment means that every stakeholder fulfills their obligations, duties, and responsibilities without fail. For instance, the homeowner should hire a competent project manager and general contractor to mitigate the risk of incompetence. Equally, the project manager and general contractor are responsible for ensuring all safety precautions are followed at all times to avoid or minimize the occurrence of accidents. Without every stakeholder fulfilling their roles effectively, it will be difficult to complete the project successfully.

The third CSF is effective communication — an especially overlooked factor in project risk management (Kendrick, 2009). Communication essentially denotes the flow of information from one entity to another, and information must be effectively communicated to ensure everything goes as planned. The significance of effective communication in project risk management stems particularly from the fact that projects usually involve a multiplicity of stakeholders (PMI, 2008). For example, it will be important for the project manager and the general contractor to communicate with suppliers clearly and precisely to ensure construction materials are delivered in the specified quality and quantity and within the stipulated timeline. The project manager and general contractor should also have a clear understanding of the homeowner's expectations, which can be achieved through open dialogue among all three parties. Effective communication will also be vital for conveying duties and responsibilities, relevant precautions, and unexpected changes in project scope, budget, and duration.

Distinguishing Risks from Issues

Risk management is not just about identifying risks and formulating measures to mitigate them — it also involves anticipating issues (Kendrick, 2009). Though often used interchangeably, the terms risks and issues do not mean the same thing (Kelly, 2015). Risks are essentially events that may or may not occur (PMI, 2008). In risk management, focus is specifically on what could go wrong: the project manager identifies events that could hinder the commencement, progress, or completion of the project. In other words, risk management is a "what if" analysis. In this case, for instance, what could happen if the general contractor does not have the prerequisite competence and qualifications, or what could happen if a fire accident occurs? The project manager explores all possible scenarios and develops a plan to mitigate the identified risks.

Issues are different from risks in a fundamental way: while risks are events that may or may not occur, issues are events that have actually occurred (Kelly, 2015). In spite of a robust risk mitigation plan, some of the listed risks may turn out to be actual problems — issues. Often, there are unexpected or unknown events that catch everyone by surprise. Traditionally, project risk management involves predicting possible risks mostly on the basis of past events (Kendrick, 2009). The problem with this approach is that history may not always correctly predict the future, meaning that until an issue actually occurs, it cannot be said with certainty that it will occur. For this reason, it is not uncommon for project managers to take action only when a risk becomes an issue (Baker, 2007). Rather than employing a proactive risk management approach, project managers will often wait until the risk actually materializes. Such an approach can be problematic, however, as it discourages the anticipation of contingencies. Issues are best addressed before they occur.

References

Baker, E. (2007). You've got way too many issues! Paper presented at PMI Global Congress 2007 – North America, Atlanta, GA. Newtown Square, PA: Project Management Institute.

Dinsmore, P., & Cabanis-Brewin, J. (2011). The AMA handbook of project management. New York: Amacom Books.

Kahkonen, K., & Artto, K. (2000). Balancing project risks and opportunities. Paper presented at Project Management Institute Annual Seminars & Symposium, Houston, TX. Newton Square, PA: Project Management Institute.

Kelly, R. (2015). Risks and issues – they are not the same. Retrieved from http://www.esi-intl.co.uk/blogs/pmoperspectives/index.php/risks-and-issues-they-are-not-the-same/

Kendrick, T. (2009). Identifying and managing project risk: Essential tools for failure-proofing your project (2nd ed.). New York: AMACOM.

Project Management Institute. (2008). A guide to the project management body of knowledge. Newton Square, PA: Author.