Risk Management for Architectural and Engineering Firms
by Gerry Stebnicki P. Eng.
Managing risk is all about getting out of harm’s way or, at a minimum, adequately protecting oneself when placed in a position of high risk. The old adage about standing behind a donkey is a good one to think about in terms of risk. If you stand there long enough, you’ll get kicked. And it doesn’t smell that great either.
It’s surprising that, time after time, architectural and engineering firms continue to place themselves in that position, and they just accept the fact that the inevitable kick is acceptable. Wearing body armor is not the solution. Your clients can see that from a mile away.
Firms carry the risk of design errors and the resulting financial impact that can result in direct cost to the firm to repair those errors, or from carrying increased insurance cost. The most devastating effect from those risks is the possible loss of clients and reputation.
Let’s look at some of the things that guarantee to keep our design firms behind the donkey, in the kicking zone:
- Hiring low wage staff and believing it is good value;
- Resisting change that’s necessary to keep ahead of the competition;
- Not equipping staff with appropriate training or tools for the job;
- Not being creative in services agreement structure;
- Not being innovative in design process.
In addition to those, there are myriad other ways to get your firm in trouble or to increase risk unnecessarily:
- Repeat critical information in more than one location in the construction documents, so changing it in one location make it necessary to find and correct all of the others.
- Forcing staff to use old technology, causing them to perform repetitive low value tasks, often leading to errors as a result of the lengthy mindless processes;
- Not taking the time to understand new technology and applying it inappropriately, resulting in higher than necessary production costs.
- Ignore the importance of carefully reading the contract.
- Being afraid to document and charge the client additional fees for additional services.
Poor risk management will have a large impact on the quality of your work, staff morale, client relations, and ultimately and painfully on the bottom line. Enable office protocols and utilize technologies that can help you with some of this risk management tasks. Shop for the right tools, which can make an enormous difference to production costs and accuracy. Make check lists for critical processes on each project. Don’t let the important details slip the cracks.
The best, and risk-safe, position for your firm to be in is in front of the donkey, leading the pack.
Gerry Stebnicki P. Eng. is President of of DraftLogic Inc.DraftLogic Inc. is a company that has created expert systems software for electrical designers. This proven approach can be a game changer for design engineering firms and for design/build contractors. Contact DraftLogic Inc: www.draftlogic.com