An approach to risk management in the language industry (part 1 of 5) 1

Enrique_CavalittoAs a Project Management Professional (PMP)®  and in my years working as project manager in the services industry I learned to use risk management as a key tool to prepare for the unexpected.

Ten years ago I joined ProZ.com’s team of site staff and discovered the enormous professionalism shared by many translation freelancers and companies. However, I am under the impression that a systematic approach to risk management is not widespread in the language industry and I assembled some notes to help bridge that gap. 

The following is the first post in a five-part series from an article I wrote on this subject for the June 2016 issue of MultiLingual magazine. It is reproduced here with their permission. 


Introduction

Scenario 1: A professional translator reports being scammed by a client. Known contact information on the client turns out to be false. Money is hopelessly lost.

Scenario 2: A translation company owner complains that a translator just recruited for a critical job failed to deliver, and as a result the agency lost a good client.

Scenario 3: A dispute between a translator and an agency arises after a project is delivered, when it is discovered that the payment method used by the agency is not available in the translator’s country of residence.

What do these situations have in common? One or more parties experienced losses and other inconveniences because the circumstances were different than expected, and the problems could have been prevented by asking just a couple of questions at the right time.

Welcome to risk management, the professional way of dealing with the uncertainties of the future!

This article will present some basic considerations on risk management, two internationally accepted frameworks and an overview of their application in the translation industry, followed by a possible practical approach and some examples.

Risk and risk management

Both in our ordinary lives and in our professional activities we make decisions based on assumptions (statements taken for granted) and predictions (statements about what will happen in the future). The filling of these cognitive gaps is done based on past experience, benchmarking, advice from others or the acceptance of other people’s statements.

In practice, many of these variables will not behave in line with our expectations. This can happen because randomness played against us, or we were deceived by our own wishes or by third parties, or maybe because we failed to consider possible deviations from the status quo, or we were simply wrong.

In a nutshell, our decisions involve a degree of uncertainty and, as the complexity of our processes and the number of decisions multiply, so do the possible negative impacts of uncertain events or conditions on our objectives, also known as risk.

Risks are characterized by their probability of occurrence and the possible impact of their consequences. Risks are always conditional and in the future. Once a negative condition occurs, it is no longer a risk but an issue.

Risk management is the process of handling these uncertainties in order to reduce their probability and/or impact, and it defines the difference between reactive firefighting and proactively managing projects and processes.

Risk management should be undertaken by all organizations, including the one-person companies otherwise known as freelancers. It requires commitment from the organization’s management, and a systematic approach must be pursued to develop consistent policies and practices.

We will present the widely accepted generic frameworks provided by the Project Management Institute (PMI) and the ISO 31000 standard, followed by a discussion on their application in the language industry (and the organizations working in this ecosystem).

This article first appeared in the June 2016 issue of MultiLingual magazine. Reproduced with permission.

NEXT: READ PART TWO >>

One comment

  1. Pingback: An approach to risk management in the language industry (part 2 of 5) « Translator T.O.

Leave a reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s