Introduction

Major capital projects, by their very nature, involve risk. For the construction worker, there is the risk of injury or death, for the community there is the risk of environmental impact. Thanks to significant improvements in construction safety and in the efficacy of environmental regulation, both these parties can expect their project-driven risks to be significantly reduced. But there is another party whose ability to manage risk exposure has, if anything, increased, and that is the party who is investing large amounts of capital to build the asset. As projects have steadily become larger, more complex, and of longer duration, the challenge presented to executive decision-makers has never been greater. The long history of staggering cost overruns and delays in completion offers little assurance that the cost estimates and schedules presented by project sponsors and engineers can be relied upon. Nor can the executive take comfort in the extensive body of knowledge describing project management and project risk management best practices—clearly these have been demonstrated time and again to be insufficient to meet the requirements of large projects. That idea that large engineering and construction projects can be made to be predictable may well seem to be a myth. But there is a way to improve both the process of capital project investment decision-making, the management of project execution, and the understanding and mitigation of risks. Fresh thinking is required and some long-held ideas of best practice challenged. This opens the door to the approach we call Risk Navigation—a way of thinking and managing that allows predictability to be managed and business goals to be achieved.