Page 34 - Deconstructing risk
P. 34


Just as construction transforms our world, so the industry
is transforming itself – embracing the new realities of
operating in complex and dynamic global markets

Construction today                       Globalization                              Technology
           benefits from enormous        International companies keep               There have never been more
           opportunities. In both        expanding into new territories             technologies available to construction
the near and longer term, the            as infrastructure continues to             – from building methods such as lean
industry will have a central role        develop. Megaprojects are now a            construction, to digitalization of job
in revolutionizing global trade,         common feature of the construction         processes and collaborative electronic
rebuilding existing infrastructure       landscape. They require scale,             environments such as BIM and 3D and
and delivering transformational          financial stability, a global view of      4D modeling. Equipment will become
buildings that underpin how we           alternative delivery methods and           smarter, and the ability to identify
will live and work. But the industry     the ability to partner in all aspects      issues and resolve them quickly using
also faces considerable risk. Each       of the construction process – from         technology will enable companies
project begins in a different location   conceptualization to financing,            to be more nimble. At the same time,
and often with a new workforce, the      design, construction, operations and       the challenges of working in virtual
industry works with multiple parties,    maintenance. The global nature of          environments and the emergence
and it is impacted by the particular     construction, coupled with significant     of cyber-attacks have created an
political environment of its setting.    diversification activity, suggests that    entirely new class of risk management,
                                         political instability will be of concern,  requiring proactive measures to ensure
    The Willis Towers Watson             but will likely be manageable given        operations remain productive and
Construction Risk Index shows that       the global need for infrastructure.        secure. Embracing these changes is
political instability and economic                                                  not universal and far from consistent,
climates are the biggest challenges to   People                                     but doing so promises significant cost
the success of construction companies    The need for talent is likely to have the  and planning savings in the future.
and projects. Yet the vast majority of   longest-term impact on the industry.
survey respondents demonstrate an        Construction companies face a major        Closing thoughts
underlying optimism that technology      challenge: making the sector more          The construction industry is
and talent will transform the industry   attractive to the next generation of       characterized by an intense sense of
and deliver the efficiencies that have   workers, particularly technologically      optimism, and the ability to combat
been sought for decades.                 savvy millennials who want to join         risks and deliver profitable jobs. The
                                         companies that value diversity, reward     Risk Index shows that construction
    This intersection of technological   creativity and aspire to be seen as        companies’ inherent nature is to
advancements, innovative building        socially responsible, both globally and    embrace complexity and seek out
delivery methods and transformed         in local communities.                      ways to differentiate themselves.
talent strategies is key to growth,                                                 Our survey also shows that industry
but will clearly require a new           Innovation                                 executives have a strong sense of the
approach to risk management. Risk        Construction is often viewed as an         challenges and risks that will impact
assessment can too easily become         industry that does not adopt new           their businesses over the next ten
an exercise in setting up defensive      methods quickly. But the future will       years. At Willis Towers Watson, we
measures to protect an enterprise.       demand more efficiency than ever           feel more confident than ever that
But construction has always              before, and construction companies         our ability to deliver industry-specific
been about creating competitive          will have to demonstrate their             solutions around people and risk
advantage by finding new ways            commitment to exploring new ideas          will enable us to be the best partner
to manage the industry’s risks to        and nurturing a culture that supports      for our clients, and help them grow
deliver better outcomes.                 innovation – from anticipating emerging    profitably in the face of an increasingly
                                         needs to supporting risk-taking.           complex risk environment.
    The Risk Index reveals several
themes that will become paramount
for the industry over the coming years:

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