A Risky Business – What you should be asking your agencies and suppliers about the way they manage risk.

Last night at the FFA A-League Grand Final, during the winner’s presentation there was an accident.  Frank Lowy, chairman of the FFA and the Westfield Group, literally stepped off the stage and fell heavily.  On his head [and shoulder]. Luckily, Frank was not badly hurt and (until now), has been very generous about those that looked after him and how he is now feeling.

It would be fair to say things could have gone a lot worse.  Mr. Lowy is an important, influential and rich man.  He could have taken a different tack and could have had his inevitably large coterie of lawyers deciding who to sue, and for how much.

A few weeks ago Woolworths found themselves in an image damaging imbroglio over their use of the word ANZAC.  The coverage implicated their agency and suggested that they should know better.  They probably should have.  It’s not whether or not it is a good campaign.  The real point is that the use of the term is protected by legislation [that is almost 100 years old].  What was done to ensure, in a systematic way, that all of the appropriate rights were obtained?

Sometimes things just happen.  We could write an article about who was to blame, how the stage was designed and built, who was managing safety and what they were actively doing to manage risks like this.  We know and work with some of the people involved and know that their professionalism is above reproach.  We could also write about who wrote the campaign, who was responsible for rights releases and how this all happened as far as the Woolies case is concerned.

What we do is inherently risky, whether we are building a stage, managing a large public event or writing a letter to your most loyal customers.  It’s risky because generally, when working in the marketing and events world, we are tilting towards action and behavior change.  Literally pushing the boundaries.  This type of action leads to increases in pressure in any system, which when not properly managed, leads to things breaking.

What is important is how it is managed. Risk that is. Before, during, and after everything you do.  Generally, in business we are all living in a world of continually reducing time, budget, and resources; of increasingly longer work hours; and a more flexible and changing workforce.  All of these things lead to higher risk of these types of issues.

When selecting a supplier, you are changing your risk profile to that of their process, not getting rid of it.  It would be easy for Woolies to say “it’s the agency’s fault”.  In reality, it is Woolies and their brand that takes the hit. They can sack the agency, but that is transitory, and is gone long before the stink of the issue fades.  Similarly, it would be easy for the FFA to blame the event producer, the producer to blame the stage builder and the stage builder to blame the designer.  No one wins.

It is almost universally agreed that the way to ensure manageable, replicable, results is through a strongly process driven system of management and review.  The system should be easily explained and more easily applied.  It needs to cover how things are planned as well as how they are delivered, and also how you manage review and continuous improvement.

There is no silver bullet.  We could write you a list of the right questions to ask a supplier before engaging them.  But that would be our list, and the truth is you need your own list, and it needs to change constantly as the requirements of your business change.  What is required is an understanding between you and your supplier/agency of what is required and what the appetite for failure is.  Everyone’s is different. It is, in effect, a relationship that takes into consideration all of these things.

What you do need to do is ask, and talk about what is being done to make sure that these things don’t happen.  There are standards for project management and risk management and many companies in our industry that use both.  There are also companies that have perfectly valid ways of doing things that do not comply with these standards, because everyone IS different and there are many ways to “skin a cat”.

So, get the conversation going. Supplier risk management is your responsibility.

N.B. No cats were skinned/harmed in the writing of this post.