What lessons have we learned on how to manage business risk?

Ben Blackett Ord,
Bovill

As a consultancy that specialises in financial services regulation we have been better placed than most to weather the economic downturn. The difficulties suffered by some of our clients and the reduction in start up activity at the beginning of the year has to some extent been balanced by a more aggressive and intrusive regulator leading to a greater number of requests for assistance. The economic downturn has reinforced the business basics of conducting due diligence on new clients, rigorous debt chasing and getting the best out of your people.

In difficult times there is greater temptation to accept clients that would be unacceptable in better times - if you don’t want a particular client in good times you certainly don’t want them in bad times! In relation to debt chasing we put debtors into three categories, those that can’t pay (where there is not much you can do but arguably good due diligence mitigates against this being too sizable a category), those that can pay but are inefficient (where a degree of forbearance may be appropriate for the sake of a relationship) and those that can pay but won’t (where we tend to move swiftly to legal proceedings).

Tougher economic times are not the time to carry people, or tolerate staff not working to their maximum potential. A greater focus on appraisals and evidence based performance feedback helps mitigate against this, and high quality focused management information ensures clear messages for everybody as to which behaviors are most important.