There are two basic models for delivering risk management services: the transactional model and the consultative model. The first model begins with products, while the second begins with an analysis of need. At Fulcrum Risk Solutions, we employ a consultative model because we have found that it provides our customers with the best value at the lowest cost. To help show how it provides this value, consider another scenario where we can see both models at work.
Almost every adolescent goes through an “awkward” phase of growth, a period where limbs grow gangly and clothing never seems to fit quite right. My wife and I have a son who is in the middle of this phase. If I took him to a store to try on suit jackets, I know already what we’d find. A jacket that properly fit his shoulders would have sleeves that barely passed his elbows, but any jacket with sleeves of the right length would fit him like a tarp.
If we were lucky enough to find a jacket that fit his arms and shoulders, we still wouldn’t be out of the woods. The well-fitting jacket could be the wrong price, the wrong style, or the wrong fabric; there are dozens of reasons why a jacket of the right size might be rejected. Suppose, though, that we hit the jackpot and found a well-fitting jacket which ticked all of the right boxes on the rack. Even if we found the perfect jacket for my son that day, he could grow out of it in a few months, and then we’d have to go right back to the rack to hunt for another.
This shopping experience is typical of the transactional model. In the transactional model of risk management, organizations are presented with a limited portfolio of products and attempt to pick the ones that seem to best fit their needs and goals. As the above example demonstrates, the prospects of finding the perfect risk management solutions “off the rack” are dim. In trying to select coverage from limited options, it’s easy for organizations to overspend and remain under covered.
To get the risk management solutions that best fit your organization, you need to partner with a firm which utilizes the consultative model. In the consultative model, a firm begins by determining what your organization’s needs actually are (as opposed to what they seem to be) and then focuses on creating strategies to address those needs. To keep with our shopping example, think of the consultative model of risk management as something like employing a tailor instead of buying from the rack.
A tailor has a sharp eye for detail, and when he measures a person for a suit, he is able to see little things that most of us miss, features that make us unique. He incorporates those details into each of his suits, so that when he is finished, they will fit perfectly on only one person in the entire world. As his client grows, the tailor can alter his creations, letting out a seam here and there so that the suit continues to be the correct size.
Like the tailor, we also seek to create a coverage strategy that fits your organization perfectly. Because we work with strategies rather than physical materials, though, we have several advantages over the tailor. While a bespoke suit often costs much more than a mass produced one, our risk management consultants can frequently develop and implement custom strategies that are cost-neutral or even cost-saving. Our work also allows for plans to be easily updated. A tailor might eventually run out of seams to take in or out, but a risk management plan can be adjusted indefinitely to grow with your company.
With the consultative model, you don’t just get the right products for your organization, you also get expert advice on implementation and rollout, data monitoring and analysis, and continuous support. At Fulcrum Risk Solutions, we know that when organizations are confident in their risk management strategies, they are emboldened to become the best versions of themselves. We’d love to work with you to see how we can help you flourish.