With all the screaming and shouting there has been over GMTV’s competition calls, many businesses outside broadcasting might fail to recognise some more general issues.

The primary objective of management in any organisation is to identify and manage risks. What the GMTV situation revealed is that there was a systematic failure to identify and manage a potentially large risk. In engaging in a contract with an external agency there was a significant risk to their reputation. Customers would inherently identify this service provider with GMTV; however, had GMTV considered the nature and risks with this relationship?

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What this and a similar incident at Blue Peter revealed that producer’s management had not recognised the risks associated with this activity and set out to identify, monitor and manage them appropriately. What seems to have happened is that GMTV identified this as a separate revenue from subsidiary activity and seeing no risk took their eye off the ball pacing the activity in the hands or a third party of in the case of Blue Peter, very junior staff.

Would either of these companies have done this with editorial content? The answer is certainly not. Like any organisation, producers recognise that when you are talking about any customer focussing activity you have to be very careful. In GMTV’s case what they recognised is a potential revenue stream and contracted a 3rd party to organise the relationship and revenue earning between their customers and themselves.

There is absolutely nothing wrong with using third parties to communicate with your customers and to sell to them. Companies use agents, franchises and a whole host of other relationships every day. However, they recognise the risks involved and take steps to manage the risk and plan for possible contingencies.

Consequently, what can companies learn from GMTV’s mistake? There are two things:

Firstly, establish good relations with your service providers especially ones that are customer focussed. You need to understand what drives them and ensure that the culture in your organisation and theirs is compatible. The relationship cannot be simply about delivering a service-level agreement (although this is important), it has to operate on a variety of levels proportional to the level or risk (not the current level of income or expenditure).

In addition, this relationship has to be managed by someone who understands the issues involved and will be listened to by management.

Secondly, when embarking on new business areas or activities, manage and recognise this risks this might present. You cannot outsource a management role to a service organisation and as I outlined above managing risk is a key management role. The fact you are using an outside expert company does not eliminate the requirement for you to identify, monitor and manage the risks involved.

Where you could use a service provider is to use their experience to help identify and report on this risks to management. As well as to develop a plan of action to manage these risks. However, even this cannot take away the primary responsibility of management to identify monitor and manage these risks..