You are a principal at Structural Engineering Company (SE Company). You have carefully nurtured a good relationship with a new client who has approached you with a new megaproject.

You’ve followed all of your company’s good practices of risk management. Have you done everything that you can to ensure the project will be trouble free?

Company leaders should establish the importance of addressing the risks of providing structural engineering services.

Defending the company from claims can have a devastating effect on a healthy company by sapping many hours of valuable management time and profits away from operations. When prepared, your staff can play a vital role in recognizing and reacting to risks. They can be the "early warning system" of recognizing festering issues and unhappy clients.The staff is on the construction site, in the clients’ offices, answering the phones, and on the front line with the design teams and constructors. They are your eyes and ears and they are bright, educated people who are motivated to help the SE Company succeed. You just need to stress the importance of loss prevention to the company and provide the tools and training to help them help you manage the risks.

So how do you set up a risk management program, or enhance one that you already have in place? The Risk Management Program (RMP) of the Council of American Structural Engineers has some suggestions. Based on the organization’s "10 Foundations of Risk Management," the RMP can help you develop a plan to use at your company. The plan will enable you to engage your staff to help develop your own risk management program tailored to fit everyone’s SE Company.

Building your organization’s risk management program together with the staff has two important benefits: it taps all the brain power and creativity of the company and gives everyone ownership of the resulting program. It is critical to be open and honest about the goals of the company’s risk management program and to be receptive to all suggestions and ideas from those who work with you. This virtually assures that it will be a workable program in which everyone believes. Additionally, this approach will command a good understanding of the importance of each tool, technique, and situation reaction that is developed.

The first tool in the RMP’s plan addresses the first of the "10 Foundations of Risk Management": create a culture for risk management and preventing claims. To develop a culture of risk management and claims prevention, you first have to realize your firm’s current philosophies and how culture develops within a company. Company culture comes from three aspects—artifacts; shared values, knowledge, and learning; and basic unspoken assumptions.

Artifacts

Create artifacts to constantly remind the staff of risk management and its importance to the company.Following are a few suggestions:

• discuss openly and freely any lessons learned or challenges involving risk management;
• post the "Foundations of Risk Management" poster around the office to remind them about the importance of risk management;
• visit www.acec.org/rmp to get the latest in risk management information; and
• create a risk management commitment statement that all of the personnel know, understand, and can repeat.

Shared values, knowledge, and learning

Create an awareness of and commitment to risk management throughout your organization by sharing values, knowledge, and learning.

Following are recommendations:

• share examples of real claims that were filed against practicing engineers that could happen at any firm;
• tie risk into the firm’s financial information (for example, share how much the company is paying for insurance);
• share any potential claims with the staff and explain the consequences that the company can face;
• provide claim statistics to your staff;
• role play by meeting with your staff to present real-life situations in which the company is faced with a risk management situation; and
• attend educational presentations, such as RMP’s Risk Management Convocation or educational presentations.

Basic unspoken assumptions

Basic unspoken assumptions are those aspects of company culture that are not confronted or debated. These sometimes guide behavior to a greater degree than the stated values. By nature, assumptions will take longer to develop than the first two recommendations. In fact, by going through the first two aspects, basic unspoken assumptions relating to risk management will be developed.

The Risk Management Program (RMP) is organized as a program of the American Council of Engineering Companies’ (ACEC) Coalition of American Structural Engineers (CASE). The group’s mission is to enhance risk management, loss prevention, and claims management techniques of the structural engineering profession. To learn more, visit www.acec.org/RMP.

Nils V. (Val) Ericson, P.E., is the chair of the RMP Steering Committee, as well as the chairman and CEO of The Di Salvo Ericson Group - Structural Engineers, Inc., in Ridgefield, Conn. He can be reached at val@tdeg.com.