Why Risk Management Is an Essential Part of Planning an Event
Risk management is an essential aspect of project management and, more specifically, in planning an event.
“Risk” can be defined as any unwanted event or situation that can lead to the failure of your project or event. There are different types of risks such as social, political, cultural or financial, and they all need to be taken into consideration.
Risk Management therefore identifies all the potential risks that may arise from holding an event and then lists the steps event organisers and professional event management companies should take to reduce or mitigate identified risks.
In the events industry, there are always lots of moving parts at any given time with a multitude of unknowns that event professionals need to prepare for. Here are some of the risks and reasons why risk management is crucial for each event.
Financial risks can be covered and mentioned in lots of different ways.
Firstly, most professional event organisations arrange events for clients, and when something goes wrong and is not appropriately managed, it can jeopardise the agency client relationship, resulting in a potential financial burden on that agency. Covering all the risks and having plans will help to ensure that an event is successful and that the client is happy.
Secondly, some events are paid for events where guests will be purchasing a ticket to attend. In the instance that the event does not run as planned or is not managed sufficiently, attendees may require their money back – not something that will help with the profitability of that event.
Finally, failure to plan and analyse risks in advance may result in problems that will need to be fixed mid-event without a strategy. This may cost a lot more money than necessary and will likely cause you to go over budget.
Health and Safety
There are often lots of health and safety risks which can be associated with all different event types.
During the build and derig of an event, this is particularly key, as this is where there are increased health and safety factors as a result of rigging the set for conferences, furniture set up and more. Only designated and approved suppliers should be allowed on-site during the set up and tear down of an event.
Public liability and other insurances should be held to cover accidents and injuries at an event, and the entire site should be assessed prior to opening the event.
Failing to plan and predict or manage risks increases the chances of not being able to act efficiently should something unexpected occur. This can cause unwanted media attention, and reputation is a difficult thing to recover. By planning for risky situations, these can be swiftly resolved and sorted, avoiding any bad press.
Events Beyond Your Control (Force Majeure)
Including a force majeure in a contract is a good way to mitigate the loss of funds due to an unexpected event. Unforeseeable circumstances that prevent someone from fulfilling a contract such as extreme weather, acts of government, and shortages of energy supplies can be covered for when signing contracts with venues and suppliers.
Overall, by defining risk management processes for your company, success is made more likely by minimising and eliminating negative risks so projects can be finished on time. This enables you to avoid going over budget and fulfill targeted objectives. When there are no risk management strategies in place, projects get exposed to problems and become vulnerable. Effective risk management strategies allow your company to maximize profits and minimize expenses on activities that don’t produce a return on investment.
About the Author
Sarah Hill is an Events industry content writer. She started her career in the events industry almost a decade ago; as time progressed becoming an avid event blogger, and she has been sharing her insight on corporate event planning for several years.