09/08/10

By Claire West

Every business has to deal with risk and it’s impossible to eliminate it, despite the best efforts of the nanny state. The risk in business comes from all angles — financial, operational (including health and safety), environmental, people, knowledge retention and reputation. Employers worry about what happens if they get it wrong and also about how to get the staff to ‘do it right’. However, risk = reward — if only organisations manage it well.

Most employers are surprised — in fact, some are downright disbelieving — to find that there are ways of managing risk that not only removes the issues around ‘getting it wrong’, but also can have a really positive effect on the bottom line. It’s possible to use an integrated management system to manage risk, save money and increase profits. It’s all to do with seeing things from a different perspective.

Malcolm Tullett is a risk and safety consultant with well over 15 years in business, plus 20 years in a role where risk was part of the job — as a senior officer in the London Fire Brigade. In 2006 he put his ideas on integrated risk management together and won an innovation award from the Institute of Engineering and Technology for his concept PROPA (Profit through Positive Action).

If someone has an accident at work, instead of seeing it as an inconvenience or disaster (depending on the severity), it can be seen as an opportunity to improve the processes to prevent it happening again. Often this results in better operating systems that are more efficient and effective.

“I can’t stand all the ‘conkers bonkers’ stuff that goes on, both in and out of the workplace,” he says, “risk and safety are usually seen as a necessary evil and a stick-on solution. I’m hoping that the new government do what they are promising and cut the legislation down to a manageable level so employers can get on with doing what they’re in business to do, without being strangled by the law.”

A real integrated management system addresses all areas of the business — finance, operations, people and sales and marketing — and allows the whole organisation (whether big or small) to streamline their operations.

Less effort in managing the information will reduce admin time and free staff to do the things that really make a difference, not to mention that collecting the information from people’s heads ensures that they don’t take it with them when they leave!

However, there are also many opportunities in every business to hit the bottom line. For instance integrating the sales and production processes means that the sales team don’t outsell production, and production doesn’t make more than the sales team can ever shift. It can be linked into the supply chain and reduce costs in storage and make a real difference to the cost of sale.

Over production is a risk to the business with valuable resources tied up in stock. Failure to deliver on orders taken is a risk to the business with the company’s reputation on the line. A warehouse full of parts or materials that may not be used for weeks or months is a risk to business as that’s money sitting dormant. Integrating the information from all these departments reduce the risks, allowing much better quality management decisions to be made.

This is just one example — with a little creative thinking most businesses, whether service or product driven, can change the way they operate and deliver vastly improved results for a much lower cost. Done properly, this is invisible; it’s part of how the organisation works, not a ‘bolt-on’. Oh yes, it works for health and safety too!

Malcolm is co-director (with Chris Hilder) of Risk and Safety Plus Ltd. http://www.riskandsafetyplus.com, based in Surrey but operating throughout the UK and overseas. “It does what it says on the tin!” he smiles. “Risk management, safety in the workplace — and the Plus is about less obvious aspects of ‘elf and safety, such as dynamic risk assessment and, of course, everything that sits behind the concept of the PROPA way to do business.”