I'm looking for some marketing intelligence regarding the best practices in setting up a Risk practice.
What constitute the value proposition of a Risk consulting services? What are the critical things to put attention on?
Can anybody share his/her knowledge & expertise in both best practices for setting up a new Risk Consulting practice and the customer perspectives on how they select a consultancy? Are there any case studies available?

What is the most important from a client perspective: previous experiences, robust methodology, tools, overall thought leadership?

What methodologies work and for what type of organization? Based on what criteria do clients select Risk consultancy? What is the best offering strategy?

Thanks.

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  • I've established a risk practice for our firm and we are quickly growing national wide.  As you’ve identified in your question, the single most important ingredient to building a risk practice is to have a strong value proposition for your client.   

     

    The most critical area of focus is in how you analyze and assess your risks.  We’ve found that executives do not find value in the current practice of identifying hundreds of risks to then turn around and run a campaign to ‘vote for the top 10 risks’.  By focusing your mitigating efforts on only your ‘top 10 risks’, you are leaving a tremendous exposure of unmitigated risks to the organization.  The value to our firm’s risk practice methodology is in analyzing risks patterns that impact each strategic goal. 

     

    Identifying and analyzing risk patterns adds a bit of science to the age old art of assessing risks.  Typically, risks do not happen in isolation.  Systemic and catastrophic events usually are triggered by a pattern of risks occurring simultaneously.  By understanding your pattern, you’ve increased your odds of mitigating a catastrophic event—exponentially! By analyzing and mitigating the risk pattern that impacts your strategic goals—you’ve also increased the chances of achieving your goals. 

     

    By order of importance, our clients are most interested in our: 1) methodology—that is where the value is gained 2) the experience and professionalism of our risk advisors and 3) the ease of implementation and cost verses value received.

     

    Yes, we do have a case study. We ran our risk model for the United Nations.  We helped the UN analyze and assess the greatest risk patterns that threaten the success of their peacekeeping operations.  We figured, if we can help the UN with solving world peace, we can help Corporations with prosperity and growth!

     

    I would absolutely love the opportunity to further discuss our methodology or client case study.  You can read about our upcoming book at: thevalueprocess.com or read about our risk model at: logicbringslight.com 

    http://thevalueprocess.com/
  • I look forward to reviewing colleague's comments on this topic.

     

    I agree with Craig's first point.  I have one client that boldly stated that she "didn't want the flavour of the day" when it came to risk solutions.  The solutions I presented needed to be unique and tailored to her environment.

     

    You especially need to understand the environment you're reviewing, have an understanding of the attitude and appreciation of the environment from the perspective of the people working there.

     

    I agree with many of the comments put forth already.

     

    Michael White, CPP

  • From Macro and Strategic Perspectives :-
    Market forces form the "rules of the game in the industry", which when stable and operating efficiently can reduce uncertainty but create risk for start-up company (company) covering transaction costs connected with conducting their activity, and more importantly, creditability/integrity. These rules include "formal" such as legal, industry framework/practices whereas "informal" refers to codes of conduct, values, and norms including the uncodified attitudes that are embedded in the society. To be successful, I would suggest owner of the company to perform the following :-
    Step 1 :-
    Examine the role of market forces which can be enabling and constraining before looking at strategic responses. Obtaining market intelligence report is crucial.
    Step 2 :-
    Strategic responses should consider the recursive link with industry framework, the effects of path dependency including direction of change, and integrating the role of personal trust and competency as a substitute for deficient formal industry framework. Such embeddedness serves as a distinctive feature of the owner.
    Step 3 :-
    Strategy/Tactic should cover the following :-
    a) show a high level of sensitivity and responsiveness to the needs of customers who are heavily influenced by market forces, and to understand the typology of their risk management practices which is usually - reactor, defender/prospector and analyser - and how they practise risk management especially dependency risks between parts of the company or within group.
    b) use networking and personal contacts for business purposes involving friends and acquaintances being tied together in a web of favours and counter-favours in order to facilitate access to new prospects. However, to avoid disappointments/failures in networking process, motivation, persistence and responsibility are key factors.
    c) application of effective communication tools by conveying key probabilities graphically, providing recurrent guide material throughout presentation/documentation (since the difficulties in interpreting probabilities can impair the communication of risk information to new prospects), including trade-offs between costs and the perceived and environmental risk associated with prospect's business, and corporate risk disclosure.
    d) risk management service is a mature industry where company often struggle to grow profits as more competitors enter the market which in turn can underpin sustained performance. Whilst innovation differentiation is associated with performance for company operating in an dynamic environment, due consideration should be given to its implications.
    e) entry strategies are associated with company size, depending on owner's capital capability, if
    - entry strategies are based on the exploitation of new market/unique risk model and/or addition to competition, higher initial size should be considered, and
    ii) based on necessity, smaller scale should suffice.
    f) in addition to those highlighted by Cem Mesc,        ,  
    - it is important to share the relevance of supply chain risk to prospect by focusing on sustainability and risk externalities, and 
    - in securing mandate, it is imperative to understand the human side of the board behaviour by studying their risk thinking and practice such as (i) personal knowledge of or familiarity with the issue and (ii) moral importance of the risk management issue since cognitive and motivational compatibility of board members affects cooperative board decision making.   
  • First let me start by saying that I do not claim to be an expert on the subject. However, having worked with organizations that try to size and manage risk I have learned it is not one thing. I have worked with consultants who specialize in credit risk or IT security risk, or ..... Today's enterprise risk covers a very broad range of areas and concerns: Financial, Operations, Technology, Business Continuity, and others.

     

    I think it still makes sense to specialize in one thing that is one's sweet spot. After all, it is that core competency that adds value to the client and allows you to earn a favorable billing rate in return. I'm stating the obvious but clients seek risk consultants in areas where they have no resident expertise of their own. If I'm interviewing a candidate I would want to see measurable results and positive outcome of past projects. Metrics around work performed and results is key.

     

    -Saba

  • Boris,

    We've been working for manufacturers seeking to mitigate trade credit risk for the past 19 years.  Clients select us based on our 1) expertise/success in managing credit risk 2) industry experience and 3) methodologies/technologies.  Our clients choose us for our reputation, so have strong references ready.  Your offering needs to have an ROI.  Ours is tangible to calculate: existing interest/opportunity costs plus bad debt expense.  If they don't see the cost reduction, it's a tough sell.

     

    Good luck!

  • Very interesting inquiry...I have been pondering this as well! I have found that it is difficult to penetrate the organization wall via consulting mechanisms. Private and Public Risk organizations are passionate about the way they do business and very hesitant to let outside "scrutiny" in (human condition)...at this point I have gathered network and experience are the two most important assets one can leverage...
  • Hi All,

    1. What is the most important from a client perspective: previous experiences, robust methodology, tools, overall thought leadership?


    1. From client perspective the most important points are :

    intelligibility of the risk descriptions how real did you felt the client's core areas that takes risks into account.

    clarity for the possibility of risks which could exposure in time. How accurate did you quantify the risk you are talking about.

    Any risk consultant could measure himself based on the risks found that are binded to real life and client's core business (main cost centers and valuable assets including brand)

     Those are reference sources that a risk consultant can do create value for enabling himself to be selected

     

    2. What methodologies work and for what type of organization? Based on what criteria do clients select Risk consultancy? What is the best offering strategy?

     

    2. Methodology often depends on industry you are serving. Except base activities the vantage point would change by the need of client. When clients do feel some un-expected results could outcome from the business than could select a consultant and have the proper infomation for directing its investments.

     

    Simply you can not use Octave method in GSM technology risk assessment because the cycles are very much repetetive and time consuming and GSM hates to be late and consume much times for academical studies. You should create a quick solution for GSM that enables the client acting faster than the competitor to keep valueable assets up and also built mid-long term atrategies that will lead the investments.

     

    In every condition a risk consultant should focus on the highest value and/or most fragile area of client. Of course a risk consultant should convince the client that industry knowledge is 20% of the risk study 80% is to be visionnaire and see how the company could stay steady, protect integrity and also increasingly earn money with sales and cost reduction activities from hazardous exposures.

     

    Me either, looking forward to see the comments on my answers to the questions.

     

    Cheers

    Cem

     


     

  •  

    Craig,

     

    Till date, the biz has more pre-defined methodologies. the modern practices includes, interaction with Analyst across countries, more client specific solutions, attracting high quality Risk Managers, moving ahead of regulators are some.

     

    looking forward for more discussions.

     

     

     

  • Hi all,

     

    I also look forward to see this thread's comments!

     

    I believe the most important thing is to build a strong "Trust Bond".  It is also important to try to specify areas of expertise no just "Risk".  A good approach here is by illustrating some of the projects you have worked on.

     

    Hope this helps !

     

     

  • I look forward to seeing the comments that will come into this thread.

    From my experience with knocking on the doors of Risk Management offices in multinationals I see two trends.

    1. They are more interested in hearing what you have done that is different. There are so many people doing the same thing, applying the same  formulas they want to identify "uniqueness" that is cutting edge. I have never been asked for my certifications.

     

    2. I believe that for the more socially responsible organisations (my core area) it is important to link to the people and reflect how people are at the heart of building opportunity through mitigating threats.

     

    all the best

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