When our team at Assurance Screening and I first decided to begin my blog, we thought of what we wanted it to become. We decided that in the beginning, we would use it as a good way to get out monthly risk management tips, and my weekly thoughts and observations regarding the types of services we provide our clients, the feedback we are getting regarding our client’s use of our services, and thoughts around risk management principles within a multitude of areas. In true Steven Covey form, we are beginning with the end in mind.
Risk Management Tip of the Month: Begin with the end in mind.
When we talk about this, what we are essentially doing is visualizing the end result of your organizational desires. When Jason Terry with the Dallas Mavericks tattooed himself with the NBA Championship trophy, his end, and the end goal of the Dallas Mavericks was to have that trophy. They as a team took the necessary steps every day, with every practice, and during every game to mentally and physically accomplish what they needed to do to achieve their goal. Believe it or not, this same principle can be employed for something as fun and exciting as vendor and subcontractor risk mitigation and compliance.
If your goal is to mitigate the risks you are taking with your current subcontractor and vendor pool to minimize the costs your organization faces with the current ineffectiveness of your current processes, then that is your end. The first step is to assess where you are at. Consider answering the following for your organization:
- Do you have a standardized subcontractor or vendor qualification form? If yes, are you requiring each subcontractor or vendor to update their information at least annually?
- Who is responsible, and what processes do you have in place to verify this data that is received to be factual?
- Are you confident that all your subcontractors and vendors carry the required amount and types of insurance that your organization requires?
- Where in your organization does “the buck stop”? If something is missed, who is ultimately held responsible for the added costs, and delayed projects?
Once you know the gaps, you can define what it looks like when your gaps are no longer in your way. Too many organizations focus on sales and additions to the bottom line, and then forget about those issues that can take away from profits, like vendor and subcontractor defaults until something happens. Being reactive versus proactive rarely gets any organization to where they want to be in the end. Focus on what you want, decide how it will happen, and be proactive on defining out the responsibilities regarding who will be responsible for what. If you do that, then you have a pretty good start.