Why Corporate Event Planners Need to Know Risk Management
As a corporate event planner, it’s your job to take your client’s vision and turn it into a reality. Sometimes, though, the unexpected can happen. Every single event you plan will come with potential risks (a lackluster turnout, inclement weather, damaged property, or even an unexpected pandemic). Though the majority of the time, none of these risks will come to pass, it’s still just as important that you and your client are ALWAYS prepared for anything!
This is why in your line of work, properly understanding risk management and its necessity is mandatory. After all, many of your clients won’t stop to think of these factors. Their focus is the event itself; not necessarily the things you want to avoid.
As the certified professional, it’s your responsibility to not only make your clients aware of risk management, but implement solid strategies so that you know how to respond if something were to go wrong. Not to mention, it helps protect you and your business. Taking all needed measures to properly anticipate/handle potential risks will help ensure that you adequately meet your contractual and legal obligations to your client, as well as any insurance requirements pertaining to the event.
So, what exactly is “risk management”? How best should you go about approaching it for each job? These questions – and much more – will all be answered below!
What is Risk Management?
In the world of corporate event planning, risk management is the practice of putting strategies into place, in order to minimize the chance of bad things happening during your client’s event. The larger the event, the more potential risks there are of something going wrong.
By anticipating all of these potential risks in advance, you (and all other vendors and suppliers involved) can take the proper precautions needed to avoid them. Or, at the very least, know how to most effectively salvage things, should any unwanted surprises occur.
In a nutshell, there are 4 main steps involved in the risk management process:
- Anticipating potential risks and hazards
- Plan strategies to minimize or eliminate the risks
- Developing contingency plans for risks that can’t be eliminated completely
- Effectively communicating these strategies to all relevant parties
Let’s break down each step a bit further!
Step 1: Anticipating Potential Risks and Hazards
Try to imagine anything that possibly can go wrong. These are the potential risks and hazards you want to avoid! Most commonly, the factors that can pose a threat to your client’s event would typically include:
- Safety risks – This involves any type of risk of physical injury to yourself, your staff, your client, guests, vendors, suppliers, and anyone else involved with the event.
- Damage to property or equipment – As a corporate event planner, you don’t want any sort of harm to come to your property or equipment, as well as any property or equipment owned by vendors, suppliers, the venue, etc. Weigh in external factors that could potentially take place during the event – such as intoxicated guests, bad weather, etc. – that might pose a threat to the integrity of the property and equipment.
- Financial risk to your client’s company – If the turnout of attendees isn’t nearly as high as anticipated, this can result in a loss of profit for your client and their organization. Similarly, theft and/or damage done by guests during the event can result in your client’s wallet also taking a hit.
- Risk to professional reputation – This can be your reputation, your client’s reputation, or the reputation of any other vendor/supplier involved with the event. If the turnout is poor, customer service is unprofessional, risks aren’t properly handled, etc. this can all lead to the reputation of those involved being tarnished.
- Security risks – This pertains to both physical security and cyber risks, such as hackers.
Step 2: Plan Strategies to Minimize or Eliminate the Risks
The type of risk will help determine the kind of risk management strategy you should take. When putting together these strategies, don’t be afraid to communicate with your client, any stakeholders involved, and your fellow industry professionals involved in the event. They all have a part to play, after all!
Plus, they may be able to offer insight and advice that you didn’t previously consider. Stakeholders, for example, may be able to draw on their experience with past events, in order to provide guidance for the best risk management practices you can implement for your event.
There are 4 main categories of risk management strategies:
- Risk Retention/Risk Acceptance – The act of determining whether the cost of managing the risk outweighs the cost of the risk itself. If the risk is relatively low in severity, it may not be worth it to spend time and money in the effort to avoid it altogether.
- Risk Transfer – The act of transferring the assessed risk to a willing third party, such as an insurance provider. While this won’t necessarily reduce the chances of the risk occurring, it will remove all responsibility from you, your client, and the vendors/suppliers involved.
- Risk Avoidance – This basically means any strategy where the aim is to avoid the risk completely. This can sometimes be incredibly pricey, though, so it’s always important to circle back to the concept of Risk Retention when evaluating the severity of any possible hazard.
- Risk Reduction – This is also known as “risk control” or “risk mitigation”. This involves taking steps to try and reduce the potential impact of the risk or hazard.
When training to become a certified corporate event planner, your accredited course will ensure that you become well-versed in all 4 of these strategies. They’re fundamental to your success in this industry!
Step 3: Developing Contingency Plans for Risks That Can’t Be Eliminated Completely
Next, it’s then the responsibility of corporate event planners to come up with actual plans for avoiding and/or minimizing all risks. When coming up with these contingency plans, keep in mind both the overall severity and likelihood of each individual risk.
The most effective way to plan for risks is to physically list out each one, and order them in terms of how damaging they would be and how likely they are to actually occur. You can start this list by categorizing each potential risk into one of the following groups:
- Onsite Hazards – This would involve any potential risks that can take place at the location of the event itself. Examples would be tripping hazards, unsafe materials, electrical cable risks, etc.
- Environmental Hazards – This would be any risks imposed by the environment that can lead to physical injury or damaged equipment. Examples include puddles of water, muddy grounds, etc.
- Weather Hazards – Thunderstorms, hurricanes, tornadoes, heat exhaustion, and any other force majeure that’s beyond a human being’s control.
- Financial Risks – Not enough guests in attendance, theft of cash/property/equipment, etc.
- Food and Drink Risks – This can include allergic reactions, choking hazards, food poisoning, damage due to intoxication, etc.
- Travel for Out-of-Town Guests or VIPs: Common examples would be delays, accidents, etc.
- Unforeseeable Risks – Vendor/supplier no-shows, acts of terrorism, pandemic, etc.
Afterwards, you can then assess each category (and their respective, grouped risks) and figure out who or what these risks pose a direct threat to. Once you feel you have laid out everything and thoroughly understand the circumstances of each potential risk/hazard, you can then prioritize them in terms of which require more time, attention, and cost, versus ones that may not require as much (or any) action.
Step 4: Effectively Communicating These Strategies to All Relevant Parties
The thing about risk management is that it’s basically ineffective if you’re the only one prepared for it. Your client’s event is a team effort. As such, it’s crucial that the entire team is on the same page about this.
Once you have your event’s risk management plan mapped out, take the time to communicate it with everyone involved. This would include your client, stakeholders, vendors, suppliers, and the venue.
Ultimately, any potential risk or hazard will be greatly minimized if ALL relevant parties are following the same protocols.