Special Event Risk from a Project Management Perspective
William J. O'Toole
Event Project Management System Pty Ltd
www.epms.net
email: Bill@ epms.net (please delete the space between @ and 'epms.net' before sending)
tel : 0418419322
It demonstrates the maturity of an industry when they take an interest in their mistakes, collate them and learn from them. I congratulate ISES for recognising the importance of risk management to the development of the event profession. For too long the event industry has ignored the past problems. Ask many event managers about their events and it's as though it went from 'go to o' without a hitch - except the client changing their mind and the suppliers turning up with the wrong equipment. I suppose they are protecting their good name. The trouble arises when there is a major problem it seems to come from nowhere and the results are often devastating. One only has to consider the Sydney to Hobart yacht race. If we do look at the past problems then it is often with 20/20 hindsight - of course 'if we had only planned better!' But this does little to help with future events. Each event is a unique combination of suppliers, venues, clients, sponsors, audience. Even if all these event elements are exactly the same, the weather is different , the Australian dollar goes up, a key company collapses or is merged, or there is new legislation pertaining to the event.
If we do not learn from our mistakes, as the saying goes, we are condemned to repeat them. The individual event manager, on their own, can hardly do this. Certainly they can learn from their own mistakes - but this does not make an industry. An association such as ISES can provide a provide a repository of the 'lessons learned' that can be used to strengthen the industry.
Fortunately the event manager has a tool that can be used for their future events. This is the risk management methodology as set out in project management. This paper will outline the methodology, adapt it to the event industry and finally give some references.
Risk Management
Our industry is based on risk. By this I mean uncertainty about the future creates risk. An event is a unique combination of elements i.e. suppliers, attendees, clients and therefore has a degree of uncertainty. Most of the event manager's time is reducing that uncertainty. When I put on an concert in the middle of a swamp ( Macquaire Marshes in NSW) the uncertainty was high. Would anyone turn up? Would the I get a satellite dish and satellite time for the broadcast? Would someone get bitten by a snake or meet a wild pig? The job of risk management is to discover the areas of uncertainty and reduce them. That is not enough for the modern event manger, they must be able to demonstrate how this has been done.
The first myth to dispel is that risk management only concerns safety or security. These are important parts of risk management - but they are only parts of it. If the event manager concentrates only of safety issues, then they may miss other areas of risk that impinge on safety. For example not enough funds to hire the right number of security staff because a sponsor has pulled out. In this case the primary risk is the withdrawal of a sponsor . The secondary risk is the result on the security issues. The advantage event managers have is they are very conscious of safety risk. People are our events. When a person lands on the moon and the world is watching - this makes it a special event. - not just an engineering feat. The event manager understands the basic process to do a full risk management plan. They already do this when they walk the site, looking for problems, such as electrical leads that are not taped down or stairs that are not well lit in white light.
The risk analysis process used is
Ø Identify the risk
Ø Assess the likelihood of the risk occurring
Ø Assess the impact of the risk occurring (severity)
Ø Produce a strategy to minimise the risk
Ø Assign the task to minimise the risk with a time frame
Ø Monitor the risk
Ø Reassess the risk for further action
Figure 1 shows the flow chart of the process. Note that there is an output - or deliverable from this. It is a risk plan document.
Figure 1 ( adapted from O'Toole W & Mikolaitis P 2002
It all sounds technical - but if you observe what you do when you ask the caterer for a sample of their food you are beginning your risk management of this element of the event. Your assessment of the risk may conclude that it is a good idea to take a photos of the plate of food so that the caterer knows what you expect on the night of the event. Thereby minimising the likelihood that they make a mistake at a time when it would be impossible to correct - i.e. just before it is served to the guests.
Hopefully, this example illustrates that the technical risk management process is second nature to the event manager, it is almost intuitive. The next step is to look at all the elements of the event and apply the same process. But there is a problem - how do you identify all these elements? If you leave one out you are not doing a full risk management. This is why the risk management is based on project management. The 'elements' are found in the work breakdown structure (WBS). That is, the list of work that needs to be done to get the event organised and finalise the event.
For example one element of the WBS is sponsorship. A risk in this area may be identified as 'sponsor withdraws from event'. Using the risk analysis process above, we look at the likelihood of it happening and the consequence if it does happen. Then we try to reduce both - if possible. We could reduce the likelihood by making sure that we regularly communicate with the sponsor and understand their business requirements. We can reduce the severity of the consequence by making sure we have other sponsors the take up the slack. What are the other ways the event could reduce the risk?
There are more tools and techniques from project management that can be used. These include:
1. Stakeholder analysis - many of the risks arise from the requirements of the stakeholders. Therefore a stakeholder management plan is a first step in risk management.
2. Fault trees - this technique is used to assist identifying risk and allow the staff to be consulted and become part of the risk management process. Note that 'consultation' is recommendation in some OHS legislation. Getting the staff and suppliers involved in risk analysis is an important step.
3. Documentation - proof of risk management is not just an incident free, successful event, it is the documents that recorded the risks and were an integral part of the management of the event. These include incident report sheets and a risk register. They make up the risk management planning document. Such documentation is basis to project management.
4. Terminology - project risk management gives the event company a list of accurate terms that can describe risk. These are the standards used across all industries. As well the staff has a language to describe the possible problems at the same time as analyse them.
5. Risk Audit - the risk audit is related competency and maturity models outlined in the so named conference paper. The aim of the risk audit is to allow the event organisation to know where they are in respect to the standard in the industry. It helps to identify the gaps. Figure 2 is an adaptation from the Sports Industry - who are far in advance of the event industry in this field. In this case it is for public events.
Figure 2 sample from Risk Audit - adapted by the author from the Department of Sport and Recreation Tasmania (with permission)
IDENTIFYING RISKS
Identify risks using the following checklist as a prompt
1 The Organisation
q Is the event being run under the auspices of an incorporated organisation?
q Has the organising committee been delegated the authority to organise and run the event?
q Is the role of the organising committee clear?
q Are responsibilities of committee members clear?
q Is the committee working to established timelines?
q Are accurate notes made of proceedings and decisions at
q meetings?
q Is good communication maintained between committee members?
q Is good communication maintained between the committee and the parent organisation?
q Are organisers aware of their Duty of Care?
2 Finance
q Have financial projections been completed to establish the event's viability?
q Has finance been allocated as a specific role to a committee member?
q Are arrangements in place to segregate event finances from those of the parent organisation?
q Are all financial transactions pertaining to the event recorded?
q Are receipts kept for all purchases?
q Are safeguards in place to protect financial assets?
The five tools and techniques are only a sample of what can be used to assist the event manger to create a risk resilient event organisation.
Conclusion
I hope this small paper has the attracted the event manager's attention and directed them towards understanding risk management for events. Risk management planning is increasingly being demanded by event stakeholders such as the government and their agencies, insurance companies, sponsors, Workcover and the courts. As a practicing event manager, you already know the process and risk management will give you the language to describe it. You can then apply it across all the event - and even to the strategic aims of your company. There are some courses that can help you in this. Standards Australia International runs a workshop on Risk Management for Events. ACEM has course in project management and risk - see references.
It is vital that the event manager keeps up to date on these issues as well as understanding what other industries are doing in risk management. It is great credit to ISES that they have made risk management an important part of the conference.
References
Macquarie Marshes -a précis of the event can be found on the CD 'Wetlands' by Sirocco on ABC Music 522 008-2
O'Toole W. & Mikolaitis P., Corporate Event Project Management J Wiley NY 2002
Standards Australia International - one day workshop on Risk Management for Events
August 27 Sydney, 28th Melbourne, 29th Brisbane 2002) www.events.standards.com.au
ACEM has on day course in project management and risk
www.business.uts.edu.au/leisure/ACEM/website/index.htm
Event Project Management CDROM - risk management downloadable documents - available from www.epms.net