Risk Management

By Greg Crosslin
March, 2006

It's What We Do!

Recently, a long time friend and independent operator called me to tell me that he had decided to sell his decades old business. He was already in the process and had received a request from the potential buyer to produce a copy of all of his “risk management guides or plans.” Part of his inquiry to me was what was meant by this request. It was at this point that I realized that those of us who provide risk management services to the industry still have a long way to go.


Risk management, as defined by academics, is “..the process of measuring, or assessing risk and then developing strategies to manage the risk.”


In all reality, risk management does not overlap but permeates every single step of our operations and business. First of all, what we provide our customers is risk management services. We help them manage, control, treat, deal with or otherwise address risks of targeted pests. This applies across the spectrum of our services from termite treatment to general pest care to mold remediation to lawn care. It seems rather simple.


It should seem just as simple that everything we do in order to meet the service requirements constitutes risk management of our own business operations. From how we answer the phone (“XYZ Pest Control, can you hold?” versus “It’s a great day in Destin Florida. Thank you for calling XYZ Pest Control; how may we help you?”) to how we inventory and store our pesticides; to how we input and store our customer data; to how we train our employees; to how we contract with our customers; to how we store records in customer files; and, how we maintain our documents is all part of the risk management of our business practices.


Many of the most successful companies across the country have a two-stage process. The first step, often referred to as the “Mission Statement,” includes the “whys” the company is in business. This often provides a grandiose statement as to their business purpose but generally states what the business is all about. The second stage or step of this process is the “how-to’s, whens and wheres” or the operational policies and procedures of how the business accomplishes the goals stated in stage one.


I have also heard it referred to on a more basic level that the risk management is nothing more than how to make money and then how to keep it once it has been made. Whatever step across the spectrum you choose to identify, risk management is involved in every aspect and area of your business and it is just that – it is about managing the risks you face as a business enterprise.


The simple fact is, every practice, procedure, treatment protocol and every aspect of how you do things is part of your risk management plan, and accordingly, should be so documented. I realize this sounds like a very daunting and overwhelming task, but quite frankly, most of you already have a risk management plan in place and probably just don’t realize it.


If you treat with a pesticide, then you are required to follow the label. You have some practices and procedures with regard to label adherence, attention to labels, training on labels, etc. This is part of your risk management plan for treatment. This is your first step in the application process so it is your first step in the risk management process, or at least one of the steps, in how to apply specific pesticides.


I’m sure that even if you don’t have a written procedure, you have a general way of doing things that is involved in every aspect of your office from the way you maintain your vehicle to the way you clean your sprayers to the way you store customer files to the way you bill customers for services, etc. What you need then is an organized and central location for retention of these items. This is the first step in getting your risk management plan together. Again, I understand this sounds like an overwhelming task and many of you will stop right here and read no further. But for those business-savvy owners who are interested in success, I suggest you go forward with the process. For those of you who don’t have written policies or procedures or are concerned that they are too basic or not applicable, then I have two resources for your immediate contact.


The NPMA and Lloyd Smigel’s Discovery Retreat each provide very sound and “cookie-cutter like” basic polices and procedure manuals to get you started. No, one size does not fit all, but these are a wonderful and inexpensive resource to begin the process. These were designed by pest control professionals for pest control professionals and understand the aspects of the basic needs of a risk management plan. Because they are industry written, they are easily adaptable to your own business issues. So, what’s the next step?


Put together your basic plan. Get all of your policies, procedures, memos and notes centrally located and begin organizing them. It is not all that difficult and you can organize it any way you like. Some pest control professionals use a table of contents or index of topics and record all of their different policies and procedures by topic. Others treat them in a chronological basis of how they come into affect on a daily basis in dealing with customers. It does not matter how you choose to organize it as long as it is organized around your use requirements. The basic step is to get the plan together.


Once you have all of your memos, your how-to’s, procedure and various things you’ve created over the years and have asked each of your key employees or supervisors to write down their version of the “how-to’s” then you put them in order and begin reviewing them one by one. You may be amazed at what you find the written procedure is compared to what is actually being done. Once you have had a chance to review and edit these to conform to your current practices or conform to your requirements, you will have your basic set of policies and procedures or your basic risk management plan. No more, no less.


Once you have established this working document (yes, it is a constant and continuous work in progress) you add to it whenever the need arises. The most active areas of change deals with training. Obviously, this is because new products come online, techniques are changed or approved by the manufacturer and/or regulatory bodies and you need to have your employees consistently following the proper standards and procedures.


One of my customers has a very unique and inexpensive way of having a monthly continuing education training session tied in with his continued risk management training. He takes his current copy of Pest Control Magazine and after reviewing the entirety of it, makes a copy of an article or column. He attaches a copy of this article or column to the bi-weekly paycheck that he gives to each employee. Sometimes it is aimed only at technicians and on other occasions the entire staff. Within three days after he issues the paycheck along with the article/column, he has a meeting just like he does every day before the technicians go into the field. He gives a simple five or ten question test that is prepared and printed out. Sometimes these are simple true/false questions, other times are fill-in-the-blanks or multiple choice questions. They are designed to teach and not to trick. If a person does not do well on the test, then that person “earns” an opportunity to meet with the supervisor for redirective training. If that person consistently does not do well, then he or she is given an opportunity to find a new job. But more importantly, at the end of the test period, a few minutes is devoted by and between the owner, supervisors and technicians to discuss how that article or column might effect one of their current or recent customers or how recommendations or suggestions or new techniques might be incorporated into the company’s procedures. Sometimes they change a procedure. At the very least they have an ongoing work in progress for addressing new issues of training and treatment.


What a wonderful and inexpensive process to have a continuing risk management module for training personnel and evaluating new and different techniques and issues facing the industry.


There is an old adage I have often heard and it goes something like “Plan your work and work your plan” to be successful. A risk management plan or guideline is the embodiment of this old cliche. From how to answer the phone to how to store customer files is a known quality assessment issue on a daily basis. Each of us may be a little bit different in terms of how we do it, but we all do basically the same tasks. The real goal is to make sure that you have a policy and procedure that is aimed at carrying out your company’s philosophy with regard to services to your customers in such a way that it is not only understood by your employees, but practiced by your employees, delivered to your customers consistently and routinely such that it is a reoccurring procedure and not by happenstance or fluke. This is important on many levels. This is quality control.


Providing consistent, properly thought out and delivered services should be profitable. Secondly, in the event of a claim, this gives you the opportunity to evaluate if there was something done wrong or if policies and procedures need to be reviewed or if there is something specifically customer oriented (defective design, etc.) as opposed to one of your procedures that is at issue. Third, it gives the opportunity to easily address new issues, treatment modalities, new products and procedures as they come into the marketplace on a thought out and managed program as opposed to a happenstance change of procedure. It also prevents you from keeping the adage “Well, it was always done this way” from permeating your company. Further, it provides your insurance company (and who is not paying enough premiums lately?) with an opportunity to truly evaluate and underwrite business practices and procedures from a risk perspective. Finally, upon the unwelcome event of a lawsuit, it gives an opportunity to answer those discovery questions as to how you carry out your business for not only the claimant but others which may help to defeat a claim.


Obviously, there are many aspects of the nuances involved in risk management. This column presents little more than an overview or an introduction to risk management and why it is so important to your practice. If making money is a goal you have, then having a sound risk management plan or guideline in place is an absolute necessity. As the old commercial used to state, “You can pay me now or you can pay me later.” I firmly believe that a proactive, well-managed company spends time in addressing the practices and procedures of the company, evaluates the needs of the customers and often edits and reinvents itself along the way. This is how we as individuals grow and develop and our companies follow the same. Your policies and procedures should similarly grow and develop in accordance with your business needs.


Risk management is nothing more or nothing less than how you operate your business. It should not be seen as some additional thing you have to do or come up with or some other task that you have to face. Instead, it is the very essence of your business existence and should be so treated. The first part of the cliche, “Plan your work ...” is very important. The second half, “... and work your plan” is equally as important. Risk management challenges this: Have you planned your work, and if so, are you working your plan? 
If you have failed to plan as the other old cliche goes, “Then you have planned to fail.” Risk management is not an important aspect of your business, it is our business.

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© 2020 by Greg D. Crosslin.

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