Company Announcement - Risk Management as a discipline, no doubt, is often construed as ‘highly technical’. More often than not, clients and end users of risk management reports are left confused or unsure in terms of the value risk management can add at virtually any level viz. corporate and/or project application. In this thinking piece, a philosophical view is considered in terms of the ‘missing link’ between the vast body of ‘risk management’ knowledge and that of tangible value add.

The context of this paper is the consulting services sector, in which risk management is virtually mandatory on most capital projects. Have you ever considered that the risk management profession relies on various approaches, methodologies and analysis tools, which are either informed by international best practice standards such as ISO 31000: 2009, with tools and techniques as contained in ISO 31010: 2009, of which clients have varying levels of exposure and understanding? This question spawns a fundamental and critical view that risk consulting services often run the risk of not meeting client expectations.

In order to address the disparity, this paper seeks to provide some guiding questions that could be considered when engaging clients, to ensure a common alignment at the onset of a new project or service offering.

The disconnect – think before you consult   
Synapse is defined as “a junction between two nerve cells consisting of a minute gap across which impulses pass by diffusion of a neurotransmitter” (Oxford, 2015). In layman’s terms, this means a structure that permits information to flow from one nerve cell to another. As this definition suggests, a connection is made via impulses and it can be stated that the same phenomenon applies when engaging in risk consulting services across multiple clients.

Stephen Covey famously quoted “start with the end in mind”. This basic yet powerful point of departure is viewed as a fundamental step towards mapping the appropriate application of risk management services which a client/project may require. The ‘disconnect’ becomes evident when a risk consultant applies a vast wealth of knowledge to a particular project which may still be construed as inadequate viz. the proverbial throwing of the book at the problem. This disconnect can be illustrated below (refer to Figure 1). The examples provided in Figure 1 are merely representative of some of the methods and tools available to risk consultants, noting that these are not exhaustive .

Figure 1 illustrates the potential disparity between what a client may want versus what risk consultants may deem necessary (subject to project context). The figure represents the myriad available tools and techniques that could be used to identify and assess risks, as opposed to what the client needs to consider prudent to the project context.

The complexity becomes evident when engaging clients within different markets. In some instances, risk management forms part of their way of doing business, whereas other clients use different methodologies such as Cost/Benefit Analysis, hence the analogy of reflecting a level of balancing.