Risk management in business relationships: four basic tips to agencies and businesses

Risk management is essential to the success of your company. Any large business takes years to build and all this time you just cannot move without business relationships!. No flip-flops or renegades are tolerated here. Quality partners are chosen for an extended period alliances are built strategically. Customers have always relied on professionals who know their trade, who are apt to study the business, who are reliable in financial matters, and happy to grow together.

However, there is no sense to believe that to find the right partner is a “job half done”. A great idea is nothing without implementation, the treaty conclusion is nothing without a strong collaboration during the overall goal.

There are several phases in the process of managing risks when integrating a business and an agency. And these are closely related to project development stages.

The First Stage – Getting To Know Each Other

Each side demonstrates their strengths, indicates their professional accomplishments, and shares their experiences. This phase follows a preliminary assessment of the other party’s potential. This is the first actual conversation which can show us whether we will be a good match, or not.

The agency is naturally interested in a decision in their favour. The business hopes that their mission and resources will be passed to the right people, who won’t just disappear or swap to another project within a week. The business will want to rely on a proactive agency to estimate risks and make sure they stand out from the crowd while achieving the results needed to grow revenue.

Advice for an agency: Do not delude a business instilling false perceptions of your work. Examine the business: their website, market position, weak and strong points, as well as their main competitors. Make sure that the client has a distinct task, and understands the goals. Think about your financial risks in business. Be positive about all these points match your profile, and you have expertise in solving similar issues. Prepare a forecast with your own vision of the situation. Talk about your real possibilities. Do not lie. And do not give the impression that you want to compete with the client’s in-house marketing team – focus on the interaction. Discuss the risks. Prepare a list of KPIs and metrics which will help you both move in the right direction.

Advice for a business: do not fall head over heels and try to avoid over-expectations. Examine the agency’s experience in solving similar tasks, read the other clients’ reviews on their services. Formulate specific, nonabstract tasks basing on the analysis of your actual situation. Try to avoid the inflated expectations, because during the initial period it will be not so easy for the agency team to cope even with those tasks that they set themselves. Let alone exceeding their results. It would be great to cope with it yourself, otherwise, don’t be shy to hire a risk management department.

The Second Stage – Project Start

In the second phase of relationships, a business often has excessive expectations. And an agency will often encounter their first serious problems. Rational risk management here can make both parties winners. These can be one or two additional tasks with a higher priority, errors in the estimated time on tasks, or the necessity to support previous solutions that were implemented before. This can lead to first delaying the deadline, the discrepancies between expected and actual results, and other niceties which are so minor in the long run, but so tangible in the beginning.

Advice for an agency: This is crucial to start your work on the project by establishing a timeline and division of responsibilities between your project team members. Everyone should understand their area of concern. Pay attention to the details and try to constantly monitor the workflow. Mistakes which may be unnoticed six months later can have a snowball effect at the start. Therefore, this will be the perfect option if your team members keep their tasks in the one collective task management system, where they can note their results, issues, request for additional data, prioritise tasks, or leave comments. This solution can demonstrate the overall picture at any stage of cooperation, as well as to find a ‘bottleneck’ if something goes wrong. Do not forget to schedule regular meetings.

Advice for a business: do not push too hard. Highlight mistakes, provide tips, share your vision, and give quality feedback. But please, try to be as polite as possible. Tell them that you will control the process, but avoid micromanagement. A team on the opposite side really needs your support. It’s true, the loyalty has not been earned yet, but your support can be an advance payment that will energise the team. Believe in them, and your confidence will result in an excellent consequence for you.

The Third Stage – The First Milestone

An agency will provide a report for a specific period: a month or a quarter. You discuss the achievements made. How do these outcomes differ from what was originally planned?

It is important to discuss all matters openly. What was done well and why during this period? Which part of the plan has failed to implement and why? What changes have occurred during the process and what was our reaction to these? How did each team perform specific tasks? What should be improved in the next period? All these are examples of risks you should always keep in mind.

Advice for an agency: monitor your results daily. If you have noticed a possible problem, tell your client about this, offer solutions and your help. We wouldn’t recommend you to wait until this problem resolves itself. Even if your customer doesn’t provide you with any information, or a manager at their office is overloaded and can not answer the questions you ask in time, at least 50% of responsibility lies with you. So it’s time to act on your own authority, especially if you know how to solve this problem timely.
In most cases, this will have a positive effect if you surpass the business owners’ expectations and therefore confirm your quality and skill.

Go that extra mile, devote a little more time to the details. Look at the very core of the task at hand. If you have executed or even over-fulfilled in the agreement, if you managed to eliminate the risks – well done, now it’s time to think what else can be done. Keep moving forward!

Advice for a business: assess the situation. Is the performance align with what you expected in return? Has the team met your expectations? What insights have been gained from collaboration? What is the agency good at? What is going wrong and why?

Speak up, your feedback is important. If some trivia seems obvious to you, it could be something new to the opposite side.

Tell them about your plans. Tell them what has happened on your side during this time period. What has changed in your company, which changes are planned for the nearest future?
At this phase, both parties usually agree on long-term goals: six months, year or more. So, each party must be confident that the strategy moves in the right direction with enough resources, and that the communication is clear. It is extremely important to agree upon milestones: months, quarters. If there are any issues with the collaboration, these must be brought to the light of the day, discussed and settled. The majority of problems which a typical project resides is in communication. Small issues and misunderstandings often evolve into lengthy conflicts. And this leads to loss of effectiveness.

The Fourth Stage – Successful Collaboration

The project is evolving, KPIs are performing as planned, the teams have elaborated a model for successful collaboration.

Advice for an agency: apart from the good work created now, you are supposed to offer an image of the future. Invest time into the development of your client. Analyse your results, present them new opportunities, offer new tools. Prepare a list of recommendation and show them the ‘numbers’ of new possible profits. This is a time to propose other your services.
Remember that just doing your job right is not enough. Everyone cares about the future. And you have the power to take part in creating this future, shared together by you and your partner.

Advice for business: keep moving on. Continue arranging regular meetings, ask questions, share insights and news about your business. Look for some benefits for your inhouse team from collaboration with the agency. Trust your partner but do not forget to observe from aside and provide feedback.

Last words about risk management

There is no denying that every business relationship has its own specifics. We definitely cannot give you a perfect general script which will help you cooperate with your client or outsource agency successfully, and avoid all hardships. Your relations with a small-business client will be completely different from a large business client, relationship with European company will be different from American or Asian. And there are million other factors that influence your business relations even within your company.

Bits of advice for an agency:
– Analyse client’s business thoroughly
– Analyse your team strength carefully
– Do not start the work if your client has a too abstract task
– Stay honest with your client in any situation
– Assign responsibilities between your team on the basis on their real skills
– Monitor the work process constantly
– Meet and discuss your results and issues with a client systematically
– Do all your best to achieve client’s goals
– Try to keep the relationship with a client after the project is completed if you realise a large perspective in the partnership

Bits of advice for business:
Analyse your business and define your real weak points and areas to improve
Set up your aims and prepare a list of legible technical enquiry
Be up to speed, coordinate their strategy if this completely doesn’t suit your own vision
Control the process, but avoid micromanagement
Try the agency on for size, if they really good – they could help your in-house team progress and improve your other business areas

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