2. Leighton Contractors
• Leighton Contractors was established in 1949
• We are one of Australia’s and New Zealand's largest
and most diverse contractors with operations spanning
construction, resources & mining, telecommunications,
industrial, energy, infrastructure investment and facility
management
• In recent years, we have more than trebled in size, and
grown our work in hand to over $12.5 billion
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3. LCPL ERM Objectives
• Implement a robust formalised approach to risk and
opportunity management
• Breakdown silos and improve operational performance
• Develop a proactive risk & opportunity aware culture
• Enable the business to retain and harness knowledge
• To use risk and opportunity management to re-enforce LCPL
capabilities, creditability and provide addition value to our
clients and stakeholders.
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4. LCPL ERM Scope
Organisation Wide Enterprise Risk (& Opportunity) Management
Business Resilience
Safety Essentials Catastrophic Risk Operational Review
Project Safety Stakeholder Business
Crisis
& & Environmental & Quality &
Management
Operational Health Community Strategic
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5. LCPL ERM Vision
To retain and utilise knowledge to the benefit of
the business
Tender and
contingency LHL and Board Risk analysis
reports Contract valuation Knowledge
Knowledge
•Risks to the
Risks
Risks & Opportunities
Risks & Opportunities •Risks/Opps to the
Risks/Opps
Tender. to Delivery
•Tender Risks requiring renewal/disposal
•D&C Risks •ExternalManagement
• Risks •SHE
• •Tender R&O
•Operational risks •
•D&C Risks •
•Operational risks •Operational R&O
•SHE Operational R&O •SHE
•Opportunities Crisis Management •LFE
Tender Execution/Operation Closure/Renewal
Business and Strategic Risk and Opportunity Management
Improving business decisions and maximising return for our stake holders
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6. Original Status (April 2008)
• Risk and Opportunity Management Practice
• 9 Live Projects, 13 Tenders
• Active Community 10 to 15 regular practitioners
• General Usage
• Inconsistency approaches
• Lack of Analysis and Proactive Management skills
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7. Issues identified
• Management system
• Material must reflect and support actual process and
requirement
• References and templates inconsistent
• No true process
• Cost Risk Analysis Guidelines
• Process clarify required
• Inclusion of best practice
• Risk Management
• Lack of foundational knowledge
• Lack of support infrastructure
• Lack of Risk Manager/coordinators
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8. LCPL ERM Implementation
Strategy
• Develop common policy and process
• Develop Maturity and Culture
• Provide training and awareness
• Implement Standard Product
• Help Desk and SME network
• Combine ‘Top Down’ with a ‘Bottom Up’ approach
• Board Mandate
• Operational process quality
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9. LCPL Risk & Opportunity
Management
1. Risk Management Mandatory on tenders
and projects/operations in execution.
2. Quantitative Analysis of risk and opportunity
date is Mandatory on all tenders over AUD
$10m.
3. SHE and Crisis & Catastrophic Risk to be
managed as part of the risk management
process (Prevention)
4. Use of standard system mandatory for all
risk & opportunity management
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10. Delivering LCPL ERM
Define ERM/RM
Objectives
1. Processes 2. People 3. Product
2.1 Central Co-
1.1 Develop Policy 3.1 Active Risk
ordination function
and Framework Manager
2.2 SME/Champions 3.2 Supporting
1.2 Implement Infrastructure
Common Process
2.3 Risk Aware
Supportive Culture
1.3 Provide
Templates and
Knowledge
2.4 Training and
Mentoring
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11. Process: Standard Business
Wide Process
• Comprehensive identification Govern: Manage Risk & Opportunity Management Process
• Objective &consistent
1.Plan
assessment
2. Identify
Define Scope
• Understand and communicate Define Organisation
Define Responsibilities
3. Assess
Identify Risks
Define Definitions Identify Opportunities 4. Manage
the current position Define Procedures Review Existing Risks
Review Existing Opp’s Qualitative Assessment
Risk and Opportunity
Identify Status Changes Quantitative Analysis
Prioritise Define Responses
5. Review
Management Plan
• Effective strategies Identify Trends Assign Responsibilities
Define Timescales
Consider Alternatives Communicate Results
Risk and Opportunity Implement Responses Review Progress
List Risk and Opportunity Evaluate Performance
• Prevention Register
Manage Plans
Identify Lessons Learned
Capture Feedback
• Control and Monitor Risk and Opportunity
Material Review Panel
• Recovery
Communicate
• To focus management attention
The key to risk management is ‘Management’
Risks will not go away just because they have been identified
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12. 11
Substantial
Substantial
Major
Major
Moderate
Minor
Negligible
Negligible
Negligible
Minor
Minor
Moderate
Major
Substantial
Likely
Possible
Unlikely
Rare
Almost Certain
Process: Engine
13. Safety Essentials
Changing the way we do Business
The Safety Essentials set the
minimum and non-negotiable
requirements that must be met to
help keep our people and sites
safe.
The Essentials are tailored to
suit each Divisions requirements
and type of business.
Essentials by identify where and
how critical risk is managed in
any business activity regardless
of the type of operation.
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14. Proactive Management
• Proactive = Manage the Risk or Opportunity
• Identify ownership of mitigation actions
• The right person in the right place to pursue action
• The person with the necessary skills to make it work
• Schedule and review action progress
• Action start date
Prioritise
• Action deadline
• Report on the effectiveness of actions
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15. Risk Recovery & Crisis mgt
• Assume Risk may happen
• Identify controls
• To monitor and keep a working watch should the situation
change
• Early warning and situation control
• Identify Contingencies Responses
• If the risk occurs, what now
• Damage Limitation
• Identify Recovery Plan
• Alternative strategies
• Return to business
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16. People: Support
Infrastructure
Governance, Risk
and
Compliance Group
Regional / Business Risk Functional
Unit Champions Management Team Champions
Governance Team
Construction Safety & Health
Operational Review
Resources Environmental
Team
Investment & Controls & Planning Group IT
Facilities Mgt Engineering
Industrial, Energy & LCPL Service Desk
IT
Telecommunication
Business Planning
Business Planning Vendor
Crisis Mgt
Service Desk
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17. People
• Expand involvement (Joint Risk Management)
• For a risk aware culture, identification should include all perspectives
Partners
Board Customers
Management Risks & Suppliers
Opportunities
Staff Regulators
Auditors
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18. People: Training
• Risk Management Foundations
• Induction awareness
• What is risk
• Company procedures and requirements
• Quantitative Analysis
• Developing internal capabilities
• Cost and Schedule Analysis
• Understanding risk drivers
• Risk Management Software Solution Training
• Getting the best from the system
• Highlighting benefits to the project/business
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20. Product
• Risk management needs be supported like any other business critical
system.
• Common System
• Allows common training, process and consistency
• Distribution and reporting packs
• Supports the full risk management process
• Grows as the teams maturity grows
• From Qualitative to Estimating and Quantitative Analysis
• Reflects International Best Practice
• But aligned to the business fit
• Project area specify scoring, terminology criteria
• Yet enables roll up and consolidation
• Multi level security
• Risk, Project, Organisational, Area
• Role/Function Based (System Functionality)
To meet the requirement Leighton Contractors selected ‘Active Risk Manager’
a web based enterprise risk management solution.
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