A risk management consultant is a person whose entire tole is dedicated to cleaning up messes—ideally before they ever happen. While that sounds like predicting the future, it’s not nearly that exciting. It looks more like careful consideration of what could go wrong, planning for that to unfold, and preparing possible routes of action. The consultant aspect is particularly beneficial because it provides a perspective on the whole operation you just can’t get otherwise.
For example, checking in with your doctor is much like seeking help from a risk management consultant. They act as an outside perspective on a topic they specialize in.
Whether your project is a small local operation or a multi-department effort that needs constant care and control, sometimes a risk management consultant can be a blessing.
In this post, we will give you a glimpse into what those services look like, what they include, and how they can boost your project. We will cover the following.
- An overview of risk
- What is risk management?
- What is a risk management consultant?
- What do they do?
- How they can help your project
- How to know when you need their help
- Tips for choosing a risk management consultant
What Is Risk & How It Affects Your Life
The Project Management Institute defines risk as “an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.” It’s a broad term because risk can reveal itself in many different ways and have many different outcomes.
These outcomes vary so much that the PMI divides risk into threats and opportunities.
Threats
A threat results from any uncertain event (risk) that negatively impacts the project, its constraints, or its objectives. A threat can be anything from a team member calling in sick to a delay on a crucial delivery to the project site. They can also take the form of legislation changes that limit the capability of an app your team is building or a world-changing pandemic.
The word “threat” covers anything that can
- Make the project exceed its budget
- Make the project miss deadlines
- Increase the scope of the project without proper (and prior) coordination between teams
All of the above are bad things that project management is supposed to manage, mitigate, or minimize. And how your team addresses these threats will be determined by the project-specific considerations you and other stakeholders have.
You might also have to evaluate the concerns of the entire organization. But, after a period of determination, it will likely be up to the project manager to handle.
Opportunities
An opportunity is the conclusion or outcome of any uncertain event that can positively impact the project. An example of an opportunity in a project setting is a contractor completing a task in less time than planned, which costs less money and allows the following steps to begin. In ordinary life, it could look like winning the lottery.
Like with threats, opportunities can cover anything that
- Helps the project meet budget expectations
- Supports the project in meeting scheduling commitments, like deadlines
- Reduces the scope of the project or allows the scope to fall within previously determined boundaries
What is interesting about opportunities is how often they are ignored in favor of threats. One of the greatest downfalls of risk management practices is how it tends to work around opportunities to meet threats, completely ignoring any good potential. With that in mind, it’s important to remember that events with potential for either outcome are not always bad.
How It Affects You
Of course, we all want our projects to be littered with opportunities and utterly void of threats, but that is seldom the case. In our experience, risk can either haunt you for a short time or for a long time, and believe when we say it will always haunt you—you just choose how.
In our experience, when you don’t plan for risk, you choose the long road.
What is Risk Management?
Risk management is the practice of managing the outcomes of uncertain events with uncertain results—specifically before they ever happen. This practice is simply about sitting down, looking at the most likely threats and opportunities your project will face, and making the necessary plans to meet those events to the best of your ability.
The seventh edition of the Project Management Body of Knowledge from the Project Management Institute (PMI) defines project management as “the art and science of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives.” And it’s fitting because risk management is an art that must be mastered to be used to the best advantage.
In our guide on risk management, we discuss the importance of planning because this concept is less about control after the fact and more than it’s about preparing well before. And without predicting, planning, and preparing for uncertain events with an open mind, you could be setting yourself up for some severe fallout.
The core principle of risk management is minimizing risk while maximizing opportunities. When this practice is best used, you actually accomplish both rather than just putting out fire after fire.
What Is A Risk Management Consultant?
A risk management consultant is any company or contractor hired to manage a specific risk category. A lawyer, for example, is a type of risk management consultant. Few run around with law degrees just sitting in their pockets, so when you find yourself facing a legal issue, you seek specialized legal assistance.
We use them much more often than we might realize, but regardless, they are everywhere. Going to your dental cleaning, getting your car fixed, checking the weather report, and hiring a quality control manager are all great examples of handing your risk off to someone with expertise.
In project-based settings, a consultant comes into that landscape and attempts to see what you can’t. They offer a perspective on your operation, your systems, and even your clientele that is often hidden from those on the inside.
They also can provide a structured, evidence-based approach to addressing the risks they find. So, you might see a risk coming, realize you don’t have the capacity to handle it, hire them, and use the strategy they provide to handle it.
What Does A Risk Management Consultant Do?
The answer to this question completely depends on what you have on the table. These services are often tailored to fit your project like a glove, so it makes sense.
What exactly your risk management consultant provides you with is directly related to where you are in your project, what the risk is, and how much of it you want to control. Most consultants will work within the boundaries you offer. It also depends on their process and specialization.
If you want them to work completely outside of the organization, there will be professionals who can do that. If you prefer more collaboration and integration, then you’ll be able to find that. It’s important that you know what you want, and while it might not be what you need exactly, understanding your expectations and hopes can be a good baseline as you start this process.
The key principle of risk management consulting is that they meet you where you are and help you get closer to where you want to be. Whether that means they give you tools and let you do your thing or back that gift up with an instruction manual and in-person guidance… well, that’s up to you.
How To Know When You NEED A Risk Management Consultant
Risk can present itself out in the open, like a hurricane. You know it’s coming the whole time. It can be camouflaged, hidden in some other event, like a predator waiting to pounce. It can even be random, hitting your project like a tornado that just happens to run over you.
So, how do you know when you need a little extra help or, at the very least, an outside perspective?
#1. You’re Overwhelmed
It’s not that uncommon for management to have their role, and as time goes on, they just happen to collect a few more. You just go from one fire to the next. At some point, you reach capacity and cannot take on any more. So, when some scary risk presents itself and threatens to add more to your plate (and you have a minor heart attack), it might be time to look for outside help.
This applies to your team, too. Everyone has a job, and they’re called “full-time employees” for a reason. Adding to your team’s workload, while it might seem like a solution, might actually unsettle your progress and rock the boat.
When you look around and notice how tired everyone is, it might be time to look for help.
#2. You Have Tunnel Vision
The way your organization handles risk has worked in the past, and you try it again, but it’s not working now. After a few more attempts, you realize you’ve been trying to walk through this wall for three weeks in a daze. “It’s how we’ve always done it.” Well, that doesn’t seem to be working anymore.
A risk management consultant can not only help you build some stairs, but they can also help you find a door or a window that you and your tunnel vision cannot see.
#3. You Need Impartial Opinions
Speaking of things we can’t see, let’s talk about the decision-making process that happens at the beginning of the risk management cycle. We’ve all been there when one party attending that brain-storming meeting will not budge on their idea of the best forward—completely regarding the needs of everyone else in the meeting.
Maybe that stalemate goes on, and now you’re down to the wire, and you need someone to come in and lay a clear, impartial perspective on the table. That would be perfect for a risk management consultant. They can look at the entire map, see everyone’s roles, needs, and wishes, and make a plan accordingly.
They can also be trusted to do so. Having a fresh point of view join the mix can feel life-changing in those tense moments.
#4. Your Objectives Are Threatened
A project on its own is a lot to manage. Add to that a massive, expensive, and threatening risk, and the semblance of control you thought you had goes out the window. A risk management consultant can take on the responsibility of seeking a way forward with as little aftershock as possible.
3+ Tips For Choosing A Risk Management Consultant
When you’ve considered every factor and finally decided to seek help, you should 1) be proud of yourself as you’ve distinguished yourself as someone who is self-aware enough to admit you need help and 2) keep a few ideas in mind.
A consultant is essentially someone who works to see what you can’t, and while that is very useful, it can also breed some issues. Below are three tips for choosing the absolute best fit for you, your team, and the goals you are trying to reach.
1. Remember, Intentions Are EVERYTHING
Before bringing on a risk management consultant, you will probably have a meeting or two before actually taking the plunge. These meetings are very, very important. Not only do they give you a sense of who they are and what they can provide, but they also allow you to see their intentions and vice versa.
We cannot stress the importance of intention enough. It’s crucial that you understand the following.
- What they intend to do
- How they intend to do it
- What issues will they address (as far as they can tell at that stage)
- What their “usual” process is
- How will that mold (if possible) to fit your needs
The more detail they give, the better. We recommend that you look for risk management consultants that are willing to educate you on what they are doing and why. Honestly, we consider gatekeeping that kind of information to be a red flag.
Additionally, you need to clarify what you expect of them, what you think this service will help, and what you hope for the end result. You need to be transparent about how much you want to be involved as well as how much you want to be left out of it.
If you think this is unnecessary, we recommend you rethink that standpoint. Consultants need to guide you, and if they can’t do that in a meeting when discussing ideas, they might not be much better at doing it in real life.
2. Be Picky… Kind Of
Yes, you need to know who they are, what they do, and why they do it that way. However, you also need to have an open mind. The whole point of a risk management consultant is getting you out of your box.
If you root down in that box, then this whole effort is going to just waste more time and money—something no one wants.
We suggest a different approach. Sure, be picky about certain aspects, like getting an insurance risk management consultant if that’s the issue you are facing, but don’t let a good candidate slip through your fingers because they don’t have the exact right experience.
Remember the box? Someone with experience you aren’t really sure about offering ideas that make you a little uncomfortable might be just what you need!
3. Letting Them Do Their Job
When you finally bring someone in, be so careful NOT to chop every idea they have to the ground. You hired them for a reason. They are recommending what they are recommending for a reason.
Delegation is a skill and not at all inherent, so if you find yourself competing with parents of toddlers on who can hover more, you might want to back off.
You have to trust the doctor to do their thing, right? You have to have that same faith in the risk management consultant you chose to do theirs as well.
We promise your life will be so much better that way.
How Consultants Can Change Everything
Outside perspectives can change everything. It happens all the time. You and your therapist have a breakthrough. Your doctor eases your worries with tests and answers. Your contractor found a cheaper way to do that thing.
These new ideas and thoughts can give projects new momentum and levity that can be hard to come by when both you and everyone around you lives and breathes this one undertaking. So, you can see how seeking the help of a risk management consultant can be extremely helpful.
They can save everyone on your project time, money, and energy that is better spent on other things—not this one issue that keeps giving you nightmares.
Next time you find yourself running into a wall with no way over it, consider getting help from someone whose whole job is focused on building stairs.
Let New Ideas Find You
Here at A.McBeth, Inc., we know it’s better to pop our thinking caps open, receive new ideas, and use them on occasion than act like we know everything. Project management is pretty uncomfortable with that attitude, which is why we are offering up new (and old) ideas all month long, so sign up to be notified the next time one pops up. You won’t want to miss it!
