4 Steps to Run a Risk Workshop

A recent question on Ask-NCN reminded me of a workshop I attended during our 2015 Building Opportunities Conference in Vancouver, BC on Identifying and Managing Risk in Social Purpose Real Estate. The presenter that resonated most with me was Mandy Hansen of Insight Specialty Consulting, who focused on ways that you can understand risk, especially risk from partnership. She suggested that all social purpose real estate projects (including nonprofit centers) conduct a “Risk Workshop,” a constructive way to assess potential issues. Here are the steps to run your own Risk Workshop:

1. Identify Your Team: For large organizations, pick someone from every department. Accountants will be concerned about different risks than your board members or program managers. For shared spaces, this will mean including a variety of representatives from your tenant partners. Don’t get trapped with a room full of HiPPOs (Highest Paid Person’s Opinions) – you need the full picture.

2. Meet to Brainstorm Risks:
Ask everyone on your team to share the risks that they are most concerned with. This can be done through slip-writing or post it notes, so that people can contribute without criticism. It’s important to create a comprehensive list.

3. Assess Probability and Impact to EACH Risk: Work with your resident experts during the workshop to group the risks into by their probability of happening and the impact that they will have on your operations. Typically both are grouped on a scale of low, medium, and high. This step often takes the most time in a workshop. At the same time, skilled experts can take these probabilities and impact ratings and transfer them into an amount that you should be budgeting for as a “risk contingency fund.”

4. Develop Strategies to Address Risk: If your building’s basement floods, what will you do to address it? Go through your list of risks, and determine steps you can take. Your options are to avoid a risk, transfer it, mitigate it, or accept it. Perhaps you would plan to change the grading of the property to encourage drainage and reduce the likelihood of flooding (Avoid it). Maybe you would buy flood insurance (Transfer the risk to the insurance company). You could mitigate the risk by moving all of your important documents to the top floor of the building. Finally, you could just accept that the basement may flood, and you don’t need to do anything about it.

Shared spaces and any collaborative should also consider partnership risks, which can be harder to identify and manage. These partnership risks can be based on different assumptions or interpretations of values, or they may arise from different external perceptions of the partners. In a collaborative, you are taking a risk that your credibility in your field or your relationship with your funders, among other things, may be impacted by your partners’ actions. Mandy Hansen recommended putting solid legal documents like contracts or MOUs in place, as well as establishing a conflict resolution practice and documenting any financial arrangements.

My favorite take away from the presentation was “Risks don’t go away – they just get managed.” Take the time to assess your vulnerabilities and strengthen your center.


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