At Broadleaf we help our clients deal with uncertainty and complexity, from simple risk assessments and decision support to complicated analysis of options and challenging decisions. We can assist at all levels, from individual projects and isolated requirements through to organisational risk management frameworks and strategic capabilities.
This case describes a root cause analysis of nonconforming imported products and materials, to identify the potential underlying or root causes for nonconformance, with a focus on what happens in the international supply chain. The case highlights the uses of root cause analysis, and the value of preparation and stakeholder engagement.
We facilitated a risk assessment for a small biotechnology start-up company, using an expanded risk analysis process. The outcomes allowed the company to set priorities for dealing with the risks it faced, improving controls and implementing assurance activities. Significantly, half of the most important risks had beneficial consequences.
An international food processing company needed to make strategic decisions about the effects of climate change on its operations and the value of its business. A risk management process was tailored for the specific context of climate change, using scenarios and climate-change drivers to structure the assessment. The case demonstrates the value of sound preparation, comprehensive briefing material and good facilitation for dealing with long-term risks and environmental uncertainty.
Tunnelling presents challenges not found in other forms of construction. Analysis of uncertainty in tunnelling schedules may require a different approach from that used for the analysis of a process plant construction, for instance. In some situations, existing schedule modelling tools lack the means to represent particular features of tunnelling developments. However, these can be addressed, with appropriate expertise, using two modelling tools and exchanging information between them.
Our client was the owner of a portfolio of high-rise residential buildings. It planned to install wind turbines on several of its buildings. The aim was to enhance its reputation for sustainability by reducing greenhouse gas emissions, offsetting energy use from other sources and striving for a ‘zero carbon’ outcome. The risk assessment we facilitated provided a comprehensive understanding of the challenges the project would face and how they were related to one another.
This case illustrates a simple quantitative analysis of uncertainty, undertaken over a period of a few days to support a commercial bid. It provided a sound understanding of the assumptions and uncertainties associated with the work, a basis for the commercial team to plan their negotiating approach as they finalised their formal tender response, and a valuable input to the commercial decision about the price at which to pitch the bid.
This case describes the implementation of risk management for a project to remediate and upgrade an urban reservoir. It demonstrates a continuing project risk management process, with a focus on regular risk assessments, formal risk treatment planning, sound monitoring and review, and a project risk management plan that is comprehensive and kept up-to-date through the life of the project.
This case illustrates a simple risk assessment to support the development of a bio-solids strategy for a wastewater treatment plant and the approval to renew a contract for bio-solids processing and reuse. It highlights factors that enabled successful outcomes to be obtained, despite commercial and operational constraints limiting the time available for preparing and conducting the assessment.
A contractor was preparing a commercial bid to construct a 220/110 kV electricity sub-station. This case describes a quantitative analysis conducted to provide an estimate of the effects of potential events on project cost outcomes, as an input to the commercial bid pricing decision.
Project framing is an important value improving practice. This case describes how project framing was conducted for a large resource project. Exploring the strategic options, and their associated risks, allowed the project team to concentrate its efforts on those aspects of the pre-feasibility study where strategic decisions were required and where reducing uncertainty would best contribute to those decisions.
- Climate change
- Mining and minerals processing
- Agriculture, biosecurity and the environment
- Oil and gas
Managing the methane in coal seams is important for mining companies: to maintain operational safety, as a potential source of energy and to minimise greenhouse gas emissions. This case outlines how a coal company examined strategic options for dealing with the gas associated with mining. It illustrates a structured process for collecting and classifying information, identifying the components of decisions and developing options for subsequent evaluation.
This case illustrates the use of risk assessment to assist with a major reorganisation as two government entities were amalgamated. It provided a space in which concerns could be raised and assessed to understand their importance and decide how to address them. A sound process for establishing the context was an important factor in the successful outcomes that were obtained.
Root cause analysis is successful because it imposes a structure on thinking about what, when and where a success or failure has occurred, and it generates actions that lead to future improvements. This case study concerns the construction of road tunnels close to an underground railway. Its focus is on the interface between the construction activity and existing railway assets as well as the inter-relationships between the organisations involved.
This case study describes a risk assessment for an urban toll road, to be delivered as a public private partnership (PPP). Only a high-level view was required, so detailed risk identification was not needed, but understanding was critical. The case illustrates a simple risk assessment process, with an extended risk analysis stage that supported more detailed control assurance. It generated increased confidence and understanding in the project and the work that had been undertaken so far.
In many circumstances, stakeholders are given only a small amount of attention, as just one of the topics to be noted as a risk management process is implemented. This case concerns a treatment plant close to a suburban community. Many individuals and organisations had an interest in its operation, so stakeholder analysis was an essential part of our risk management activity. The case illustrates the approach used to the develop criteria for analysing the consequences of risks.
A government transport agency wished to learn lessons by ‘looking back’ at the tendering process for a recent highway project to be procured as a public private partnership (PPP), an approach the agency had not used before. Two workshops were conducted: one to learn lessons and one with a focus on how risks should be managed in PPPs in the future, consistent with the agency’s established risk management framework. The case demonstrates how root cause analysis can support new or innovative initiatives.
This extended case study describes a cost and schedule risk analysis for a multi-billion dollar resources project. It illustrates: structures for quantitative modelling of cost and schedule, incorporating drivers of uncertainty in quantities, rates and productivities; deriving input data for the models to minimise estimating biases; integrating cost and schedule uncertainty; and sensitivity analysis for better understanding of the effects of uncertainty and the allocation of contingency amounts.
An urban road authority planned to extend its arterial road network with a major toll road, using a build, own, operate and transfer (BOOT) procurement strategy. The construction contractor in a joint venture consortium wanted to identify the risks it faced in its own activities to improve the quality of its tender. It also wanted to understand how the road authority might perceive the risks, to enable it to take the authority’s views into account in its submission and adopt a proactive approach to managing the authority’s concerns.
This case discusses a strategic risk assessment for a government resources regulator, incorporating aspects of top-down and bottom-up risk identification. It demonstrates the use of ‘headline’ risks, as a way of summarising large numbers of detailed risks, to facilitate discussion at a senior level in the organisation.
A regional local authority engaged Broadleaf to facilitate a workshop to resolve outstanding operational and compliance concerns raised by state government regulatory agencies relating to the upgrade of two sewage treatment plants (STPs). The case shows the value of a sound risk assessment process, demonstrable controls and structured communication among the stakeholders.
An agency with responsibility for the oversight of child care services wished to develop a risk management approach to monitoring the compliance of service providers with the regulations. This had to be done in the face of competing expectations: judicial and community demands for additional regulatory measures to protect children in child care, and industry and community requirements for more services and more affordable care. The lessons apply to the delivery of human services more widely.
This case study outlines a risk management activity that was conducted jointly by a project sponsor and a contractor, shortly after contract signature. The aim was to reduce risk exposures for all the parties involved and generate better project outcomes. There were significant benefits in terms of a deeper understanding and appreciation of each other’s perspectives, as well as a cooperative approach to risk management in the project.
The Executive of a government transport agency had been implementing a refined strategic management process progressively for some years. As part of the programme planning step, the Executive wished to undertake a risk assessment of its proposed strategy. The purpose of the risk assessment was to identify and set priorities for the major risks in the corporate strategic plan, in other words to stress-test the plan and identify anything that might hinder or enhance the achievement of the plan's objectives significantly.
This case study describes the conduct and outcomes of an initial scoping risk assessment of the Sydney Olympic Velodrome, undertaken in 1994 in the early stages of Olympic facilities planning. The intention was to facilitate a short brainstorming session, involving the main Government stakeholders in the development of the velodrome, to provide input to a subsequent value management study.
This case study illustrates the similarities between the risk management step of 'establishing the context' and the strategic planning process of 'environmental scanning'. It outlines the business context for a horticulture company, developed as part of its strategic planning process. The company has been established for many years. It produces, packs and markets fruit, with a focus on premium fruit for the retail market. It owns substantial apple, pear and stone-fruit orchards and packing facilities. The context work was a precursor to a strategic risk assessment for the company, which is not described here.
A sugar refinery had initiated a project to increase plant throughput. This involved upgrading and refurbishing equipment and installing a cogeneration plant to produce steam for the refinery and electricity for the grid by burning the waste from the plant. We conducted an assessment to establish the most significant risks and evaluated their effects on the cost of the project.
This case study concerns the construction of an import terminal for liquefied natural gas (LNG), planned as a conventional onshore receiving LNG terminal with storage tanks and regasification facilities. An enhanced risk assessment process was used and treatment options were developed.
This case study concerns an alliance established to deliver a road improvement project with substantial civil works. An estimate of the uncertainty in the cost estimate was required, expressed in dollar terms. This was needed to enable a realistic ceiling price to be set for the project for funding purposes. It was also used to develop a target cost for the contract that would generate appropriate incentives for all the alliance parties and support an appropriate sharing of risks and rewards between them.
This case concerns the upgrade of a large sewer serving hundreds of thousands of people across a catchment covering suburban areas and a central business district. The objectives were to identify and set priorities for the risks associated with the project and to develop action plans for treating the most important ones. The value of the risk assessment lay in setting priorities that allowed the project team to focus on the important matters first and develop plans that were expected to achieve appropriate benefits quickly. It is pleasing to note that the new sewer tunnel is now in operation and achieving the desired outcomes.
Investments in long-life assets involve significant uncertainty about the availability of inputs to sustain the commercial operation of the assets and of markets for their outputs. Liquefied natural gas (LNG) plants are like this, with capital costs in billions of dollars and operating lives exceeding 20 years. This case shows how a simple set of scenarios was used to help an LNG seller to anticipate what might happen in the future so it could draft appropriate terms and conditions, including conditions precedent, for a long-term contract.
An international consortium was the preferred provider for a new power plant, a build, own, operate and transfer (BOOT) project over 20-years. We facilitated a workshop to develop understanding among the stakeholders and create a project risk register for the combined team. Strong communication and a shared understanding was created between the seven international stakeholder organisations, laying a valuable foundation for successful project implementation.
A client concerned about the reliability of project forecasts wanted a way to assess how stable they were over the life of a project. If a profit forecast is reliable, the cash flow of the business can be managed to take advantage of it. While most people can see the difference between a steady forecast and one that moves up and down erratically from month to month, a purely subjective assessment can be challenged, making it difficult to hold people to account for this aspect of their management performance. Broadleaf developed a simple mechanism to introduce objectivity into the process.
For many years, Broadleaf has worked with the commercial construction company Buildcorp to help understand the risk associated with uncertainty in project costs and contract cash flows. Models of cost risk and net present value have become valuable components of Buildcorp’s bid preparation and commercial decision-making. In addition to generating useful quantitative assessments, these models provide a framework for important conversations about the quality and reliability of cost estimates and the commercial challenges of managing cash flows and achieving acceptable margins. (updated August 2016)
A forestry company sought to compare the risk profiles of returns from sequestered carbon and timber arising from a typical first-rotation softwood plantation investment. We produced a model that compared the values of future cash flows associated with carbon and timber. The model highlighted uncertainties in the market returns from the products and allowed them to be compared over a 33-year rotation.
This case study describes a series of workshops to identify the main strategic opportunities and threats for a scientific research establishment. The organisation is a niche institute that is in the top 1% of research institutions in the world in its chosen fields. Because of the strategic focus of the workshops, a particular effort was made to identify opportunities as well as threats.
A state-owned corporation proposed to build a new water supply dam to augment existing sources. We helped the company to examine the construction cost estimate for the new dam, and to identify and quantify the sources of uncertainty in the estimate. We prepared a quantitative risk model and generated a range of realistically likely construction cost outcomes, to assist in determining the confidence that could be placed in any specific cost target, budget or contingency.
We conducted a risk assessment for the management team at an oil refinery. The primary objective was to identify risks to the refinery as a business and develop an agreed priority listing of them. A subsidiary objective was to expose the management team to the risk management process. The management team wanted confidence for themselves and their major shareholders that the main risks to the business had been identified and were being managed well.
- Public sector and government business
- Climate change
- Agriculture, biosecurity and the environment
A public sector forestry business was contemplating asking private sector organisations to invest in new plantations, on land under its control, to produce structural grade timber. We were asked to assist in the development of financial models that would assist the business in evaluating bids from private sector proponents.
Broadleaf was commissioned to conduct a root cause analysis workshop to help a global mining group learn lessons after a major plant shutdown and refurbishment. This involved a one-day workshop with company employees and representatives from several contractors. Over 62 separate lessons were generated. The group developed actions to prevent failures and encourage successes in future similar projects.
A company in the finance sector asked us to help them review their risks that related to legal and compliance matters. Their aim was to simplify the current controls where it was cost-effective to do so. The review built on the considerable risk management work that had been undertaken already across the business.
A multi-national consortium was in the early stages of investigating a proposed gas-to-liquid (GTL) project. We facilitated workshops to identify and analyse the main uncertainties associated with the project. There were several objectives: to contribute to the tollgate submissions and approvals processes of the consortium partners; to enhance the quality and focus of bid preparation; and to provide a forum for communication and enhanced understanding between the partners.
At the request of the board, Broadleaf carried out an independent review of the current framework, strategy and process for managing risk in a major international commercial organisation. We were asked to provide our professional opinion on the current situation and to give advice on any further steps that should be taken to enhance and improve the foundations for risk management.
A joint venture company was developing a new mine in a remote area. The mine and processing plant would require far more power than could be supplied through the existing high voltage (HV) transmission network. The enhancement of the regional HV network was to be delivered as a turnkey project. We undertook a quantitative risk analysis of the capital cost of the project on behalf of the power engineering contractor.
Broadleaf helped a global mining group develop and implement a new approach to risk management. This involved a ‘management of change’ process to engage management teams and gain their ownership of risk assessments, risk treatment plans and plans for the subsequent enhancement of risk management on sites.
We were asked to assist in the post-investment review of a large oil and gas development that had started operation. We conducted root cause analyses to understand how the investment performed in relation to the expectations set at the time it was approved, extract lessons and develop actions that would lead to improved outcomes in future investments.
One of our clients operates sites that must comply with local environmental legislation that requires any releases of waste above threshold levels to be reported promptly to the regulator. Several small releases had resulted in the regulator imposing minor penalties. The company wanted to examine the root causes for a small selection of incidents, with the aim of identifying general lessons from them and specifying areas in which the business could improve its performance.
This case describes the estimation of a risk-based liability cap for a high-value, complex procurement contract. An estimate of potential liabilities, based on scenarios that might arise and their implications, provided a sound basis for negotiating liability terms in the contract.
A national construction company was part of a consortium bidding for a public private partnership. The winning bidder would have to deliver a large number of dwelling units at sites across Australia, and maintain them for an extended period. We worked with the contractor to develop quantitative models of the uncertainty in the design and construction costs for the project, taking into account common features, common sources of uncertainty and regional variations.
Broadleaf was engaged to review and update the Victorian Civil and Administrative Tribunal’s organisational risk management process. VCAT staff and Members were engaged in a comprehensive risk assessment focused around three workshops: establishing the context, risk assessment and treatment planning. This was integrated with VCAT's strategic planning process and changes arising from the transition to the newly-established Court Services Victoria administration.
Broadleaf worked closely with the proponent of a wind farm development to assist in constructing a business case and an information memorandum for potential investors. Our work was particularly concerned with aspects of uncertainty in the business. This case study outlines some of the more interesting features of our work.
The operator of a large gold province needed to update its Life-of-Mine Plan (LMP) and to incorporate risk and uncertainty in it. The LMP formed the base for a simplified model of the mine operations over a multi-year period, and it was an important input to the analysis of future capital investments in the mine for both the operator and the owners. The modelling exercise we conducted generated a forecast of NPV, and it encouraged managers to think in detail and with some numerical precision about their areas of responsibility.
We conducted a review of site operations risks for a remote gold mine, to form the basis for an integrated risk management process for the site.
A coal company had just completed a strategic review of a proposed mine development. The company wanted to conduct a risk assessment to identify and understand any risks to the development strategy that could effect business outcomes and develop a risk register to assist in decision making and in implementing the strategic project plan.
Broadleaf was engaged by a sporting association to facilitate a workshop to assess strategic, business and operational risks involved in its management and operation. The objective was to give Board members the opportunity to plan for and take appropriate actions to reduce the likelihood and consequences of adverse events.
A substantial agribusiness asked Broadleaf to assist in reviewing and improving its enterprise risk management process, developing a corporate risk register and facilitating the establishment of treatment options and action plans for the main strategic risks. This case outlines the process, with a particular focus on the treatment activity.
This case describes the identification and assessment of the main strategic threats and opportunities for a Government revenue collection agency. These were to form an important input to the agency's strategic planning process.
A joint venture consortium was considering whether or not to proceed to a full evaluation and a commercial bid for the development of a coal resource and a long-term coal supply agreement. This would have required a significant investment of time and resources by the JV partners. We helped them examine the issues surrounding the bid and its commercial implications before they committed themselves.
Two property services organisations, one with a corporate structure and one a partnership, had agreed to merge their businesses into a new corporate entity. An opportunity and threat workshop was conducted, as part of a larger team-building process.
The new CEO of a listed company wanted to develop a risk-adjusted forecast of earnings before interest and tax (EBIT) that he could announce to the securities market with a high degree of confidence that it could be achieved.
We conducted a corporate risk assessment, using an extended risk analysis process with control effectiveness and potential exposure measures, to assist in developing the company’s Internal Audit Plan.
One of our clients conducts exploration and mining in West Africa. The local commercial airline has a poor safety reputation, and air travel in the country is generally high risk. We prepared and facilitated a workshop to examine travel options that would reduce the level of risk.
We worked with one of our international clients to stress-test their business Code of Conduct and review compliance with their business ethics policies.
We undertook a quantitative financial risk assessment of a large European shopping centre to support decisions about the preferred redevelopment options.
We used a schedule risk assessment to help an engineering firm develop a plan for the engineering, procurement and construction management of a coal handling plant while there was still time to negotiate essential changes.
As a large resources business implemented a new global IT system, there was concern that a disaster recovery standby should be implemented. We helped to finalise the decision and the associated financial and business case.
Plans for a very large mining project were being developed and Broadleaf helped to establish how much contingency should be provided.
A ship loader was to be replaced. Downtime was critical and the owner’s team needed to determine whether the target shutdown milestones could be met.
A government agency had established a team to develop a master plan to guide its policy and service delivery for the coming decade or more. We helped the team establish a common view of priorities and the challenges they faced.
A government department wished to contract for the provision of property management services. We helped the departmental teams to reach agreement on the best way forward, ending several months of indecision.
We analysed the relationship between the risk of an energy intensive plant losing its gas supply and the cost of converting the plant to allow oil to be used when required.
High voltage switching equipment had been enclosed in a protective building that was later found to contain flammable insulation. We developed models that helped to assess whether to invest in replacing the building.
Broadleaf facilitated a strategic risk assessment for the Royal Botanic Gardens & Domain Trust and assisted with the formulation of treatments.
We facilitated a workshop with a large and diverse group of stakeholders, with competing objectives, to gain agreement about a proposed railway track design that deviated from normal design standards.
We helped ADGAS develop its ERM framework, corporate risk register and treatment plans.