Home' Inclean : INCLEAN May-Jun 2015 Contents 52 INCLEAN May/June 2015
By Bridget Gardner*
Risk management can seem like a pretty
limiting exercise. Avoiding risk runs contra to
the entrepreneurial spirit. Let’s face it – no
risks, no business. It’s that simple.
My first accountant said to me, ‘Bridget,
business is about deciding which risks are worth
taking. Sometimes you will make brilliant
decisions, sometimes you will make bad
decisions with potentially serious consequences,
but the trick is to stay mostly in the middle’. I remember walking
away thinking that was the most boring attitude to business I had ever
heard! Where was the adventure, the vision, the opportunities? I now
think to myself, where was the plan?
I’m quite sure my old accountant was talking about the risk of
financial ruin, and not about breaking the law to turn a quid.
However the reality is that industry often plays roulette with
regulatory risk to maximise profits. But this balancing act can end in
disaster, for example: toxic mining spills; road accidents from poorly
maintained trucks; or injuries to cleaners working without adequate
training or protective equipment.
Despite the complaint that ‘green tape’ (environmental regulation)
is inhibiting profits, there is a growing recognition that taking risks
for short-term gain, can cause long-term pain for business, as well as
the environment. Could risk management planning provide cleaning
companies with a framework for increasing opportunities, profits and
sustainability? This article explains how.
Shifting the focus of risk from threat
Policy makers started thinking about risk in terms of opportunities
as well as threats, earlier this century. A useful guide by NSW’s
Department of State and Regional Development; ‘Risk management
guide for small business, 2005’, explains that: ‘Risk management is the
way in which adverse effects from risk are managed and potential
opportunities are realised.’
This shift was also recognised in the second Risk Management
Standard: AS/NZS ISO 31000:2009 – Risk management – principles and
guidelines. The first of eleven new Principles of Risk Management
states that it ‘Creates and protects value’.
In July 2014, the Commonwealth Government released a document
that I recommend you all read, titled: Commonwealth Procurement Rules
Achieving value for money, July 2014. One of the key messages is that
government wants to increase the value of their dollar via the better
management of risk.
Creating value through risk management
You probably already have a risk management plan for mitigating
Worker Safety and environmental risks, plus a suite of risk
assessments, registers and safe work method statements. But with the
exception of public liability issues, such hazard-based risks generally
relate to your own company’s operations, not your customer’s.
So how can a risk management process add value to a government
contract? I was recently commissioned to write a risk management plan
for one of my clients in response to this request-for-tender question. My
brief was to use their Integrated Management System (IMS) and green
cleaning program, which I had helped develop, as the way to demonstrate
the value these programs could provide their prospective contract.
We first explored the possible situations that might jeopardise an
investment in their cleaning services, and the treatments that could
protect it. After the normal hazard-based risks to worker’s safety and
the immediate external environment, we focused on uncertainty-based
risks to site security, business continuity and service disruption due to
emergency events. This was an eye-opening exercise.
We then listed the potential risks to the premises and its occupants,
and used the risk management plan to document how their green
cleaning program could prevent them. Such risks included:
• poor quality perfor mance,
• inefficient and ineffective services,
• damaged assets and surfaces,
• poor indoor environment quality,
• skin contact with residual chemicals,
• poor hygiene and cross-contamination, and
• damaging the client’s corporate social responsibility reputation.
Growing opportunities through
This new risk management plan not only demonstrated the value of
investing in my client’s cleaning service, but it has become a valuable
business tool, by giving them:
• clear instructions for integrating their green cleaning program
through their entire operations,
• a pathway for improving quality performance and efficiency via
training and monitoring, and
• the confidence they can deliver on their promises.
As a local government consultant, I would like to point out that government
agencies are no longer required to take the lowest bid, and that ‘value’ does
not mean ‘cheap’. They are recognising that tendering too low to win the
job significantly increases the risk of adding costs down the track, either from
additional periodicals, or by having to retender if the contractor fails.
A good risk management plan can demonstrate the value of your
service at a price that allows it to occur. It also provides an effective
road map for growing your business and improving safety and
sustainability in 2015. Win – win!
*Bridget Gardner is director of Fresh Green Clean, www.freshgreenclean.com.au
Adding value via
...Continued from page 51
their cleaning services? There is strong evidence that workers are more
productive with fewer sick days and longer employee retention (www.
Developing a comprehensive scope of works, benchmarking
contracts to ensure sustainability and spending a bit more on cleaning
will result in longer life of assets, reduced maintenance and lower
Legal risk – Building owners and building managers are responsible
for the health, safety and working conditions of building occupants
including contractors. A comprehensive scope of works forms the
backbone of a cleaning tender and clearly defines all facets of the
work to be perfor med, how it is to be performed, ensures confor mance
to legislative requirements and outlines a balanced scorecard of
expectations with managed compliance that is essential to mitigate risk.
Corporate risk – Nothing is more damaging to brand and
positioning as a good corporate citizen than bad publicity. All these points
are high risk and need to be – and can be – avoided. It’s all in the scope
*Brian Clark is CEO of Better Managed Contracts, www.better managedcontracts.com.au
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