Last month’s Tip discussed the need for risk management in addition to an organization’s insurance broker. What other “experts” do you depend on? In today’s economy, with increased outsourcing, the list, and the risks, can be huge.
Many businesses need – attorneys with various specialties, CPA/tax advisors and perhaps a bookkeeper, bankers, financial/investment planners, Human Resources specialists, IT systems/security gurus, and the list goes on. You need them both for practical pre-problem planning, and for quickly and effectively sorting out the stuff that hits the fan.
Many of these advisors are critical to your success and survival, and that’s how it gets risky. Engaging an expert for help that’s necessary but unavailable, or delayed, or out-of-sync, or too difficult to implement, or flat-out wrong can be disastrous.
Define “Reliability” ~
How do you vet advisors to be sure you’re getting quality and timely advice? Moving from “necessary” to “reliable” is often difficult. Your definition comes first and impacts your choices, options, project scope and cost. What are your essentials?
- Time – Availability when you need them
- Ask about back-up, commitment, examples and references
- Quality – relevant skills and experience
- Ask about experience with similar organizations & problems, references
- Cost – payment terms and satisfaction guarantees
- Ask about hourly or project fees, not-to-exceed options, extra costs
- Practical – usable, not esoteric advice
- Ask about examples of outcomes (positive & negative), references
- Protection – errors and problems, conflicts of interest, safety & security
- Ask about Agreement wordings, E&O insurance protection
Due diligence – an important final step ~
- Conduct interviews using the Essentials above
- Check references carefully and thoroughly; get examples of successes and failures
- Define your expectations and how you and your team will measure success
- Don’t “abdicate” – delegate with enough knowledge to follow progress
- Set “update” conversations to re-align if necessary – 30, 60, 90 days
Cost of Risk ~
Finally, be conscious of the difference between an expense and an investment. You can read more about this difference HERE. Some projects might include both; others may be one or the other.
Compare project or advisor cost with your “Total Cost of Risk.” How much will it cost to complete an important project vs. how much could it cost if you don’t do it and have to deal with losses, fines & penalties, lawsuits, hassle and distraction?
Please be sure to leave your comments or questions in the comments below as I look forward to them!