MOD 015: Mr. Murphy Finds Your Risk Planning Hilarious
Merchants of Dirt Episode #15
Bounce back from missed deadlines, bad schedules, forgotten equipment, and ruined venues by using a few simple race day risk mitigation strategies.
Key Take Away #1: Risk Management Definitions
Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of your race.
Proper risk management implies control of possible future races. The key is that risk management is proactive, not reactive, with the primary purpose of:
- Identifing possible risks
- Reducing or allocating risks
- Proviing a rational basis for better decision making in regards to all risks
- Aid in planning
Assessing and managing risks is the best defense you have against Mr. Murphy and race day catastrophes.
By evaluating your contingency plans for potential problems and developing a process to how you will address them, you will improve your chances of having a successful race.
But this is an annual process for:
- Ensuring that high priority risks are aggressively managed
- All risks are cost-effectively managed throughout the race
- Making informed decisions on issues critical to your success
To approach Risk Management, first, you problem solve and work through each risk and think about what could possibly happen, and how that result could impact you and your business.
When you consider how you can best deal with that risk by providing it one of the following Risk Responses:
- Avoidance — Eliminating a specific threat and usually means eliminating the cause
- Mitigation — Reducing the expected monetary value of a risk event by reducing the probability of occurrence
- Acceptance — Accepting the consequences of the risk by developing a contingency plan to execute should the risk event occur
Key Take Away #2: How to bounce back when everything goes wrong
Disappointment is cheap, injuries are expensive.
This is why contingency planning is probably the MOST important risk management process there is!
It solves potential issues BEFORE they become problems and is how a race promotion company stays in business.
The primary role of any race promoter is to first “do no harm”.
However, avoiding customer disappointment, racer injury, or even a lawsuit, is not always possible.
This is why all race promoters need to create a tool called a risk mitigation strategy.
This process is something that you include on your annual planning schedule — usually in January — to help you keep your risk mitigation strategy up-to-date from season to season.
There are six parts to your contingency planning process each informing your overall risk mitigation strategy document:
Injury Risk: The first part of your plan should be directed to war gaming how you will deal with an injury.
Liability Risk: The next part of your plan should be directed towards figuring out how to minimize the financial impact an injury can have on your company.
Cancellation Risk: This part should also push you to create processes for how you decide if and when to cancel a race.
Venue Security Risk: Should your event require security this is where you make that decision.
Acknowledgment Waiver Risk: This is your first line of protection in that it shows that your customers were informed of the risks before they step onto your course.
Customer Behavior Mitigation Thinking: The final part of your plan should be concerned with how you plan on dealing with disgruntled or disappointed customers.
Key Take Away #3: The risk management problem-solving process
Here is how you put your risk management problem-solving process together:
#1 – Identify the Risk: Do some brainstorming
#2 – Analyze the Risk: Determine how best to manage risks
#3 – Develop a Risk Responses: Assessing possible remedies to manage the risk or possibly, prevent the risk from occurring
#4 – Develop a Contingency Plan or Preventative Measures for the Risk: Take the ideas you have that will reduce or eliminate risk likelihood, and convert them into a process you can put in place on a moment’s notice
Putting the strategy together does take some time, but is a critical last step in your annual planning.
Your Risk Mitigation Strategy only requires you write down all the results you collected from each of the six parts, and any other risks you find relevant to your business.
No matter how you format you put it in, it should be short, direct, and include only the information that will be easy to find in a crisis.
Once you have real answers to all your contingency plan process questions, the actual risk control you will have over your race will be easy to communicate to park officials, insurance companies, and your staff and volunteers.
Communication of this contingency plan is the key to its success. A plan that nobody ever reads or implements does you no service when a major injury or incident occurs.
If you plan for how you will deal with these issues BEFORE they transpire, you will be prepared even if you never have to use it.
This is the primary way you develop a contingency plan for each risk.
Please note that I am not a lawyer and you should always consult a lawyer when developing your Risk Mitigation Strategy.
And now you know.
What Do You Think?I want to know what you think about my podcast! Please leave me feedback by doing the following:
- Go to the Merchants of Dirt Podcast iTunes page.
- Click View in iTunes under the show artwork.
- Submit a review and give it a 5-star rating!