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2016 Teddy Award Winner

Bringing Focus to Broad Challenges

Target brings home a 2016 Teddy Award for serving as an advocate for its workers, pre- and post-injury, across each of its many operations.
By: | November 2, 2016 • 6 min read

Target’s roughly 341,000 employees perform a wide array of tasks. In its nearly 1,800 retail locations, they stock shelves, walk the aisles assisting customers and man the cash registers, sometimes staying on their feet for hours on end. In the company’s 38 distribution centers, they move large pallets and work side by side with heavy machinery.

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Target also operates in 49 of the 50 United States. As any national company can attest to, this presents regulatory complexity, as no two states are the same when it comes to safety regulation, health care resources and workers’ compensation law.

The safety and workers’ comp challenges, to say the least, are broad.

Then, the retail giant underwent a companywide reorganization in March 2015, which left the risk management department with fewer team members, and just as much work to accomplish. The team is responsible for safety, claims, finance and insurance across the corporation.

“We had an opportunity to help team members learn new skills and expand their knowledge base,” said Jodi Neuses, safety director, Target. “From the safety team’s perspective, we had to do some cross-training so that everyone had a well-rounded understanding of our risks on both the retail and the distribution side. We no longer had specialized experts in just one part of the business.”

The same was true on the workers’ comp side of the equation.

The Target Risk Management Team (L to R): First Row - Shannon Simonette, MaryJo Pollock, Dan Hawkins, Rachel Gillman, Debbie Marshall, Alicia Kronstedt; Second/Third Row - Carla LaVere, Megan Rooney, Melissa Cudzilo, Eric Oldroyd, Dean Sherman, Elaine Boevers, Gina LoPesio, Ben Holmes, Jodi Neuses, Amanda Lagatta; Not pictured: Diane Howden, Rob Wilkey and Debra Shoemaker.

The Target Risk Management Team (L to R):
First Row – Shannon Simonette, MaryJo Pollock, Dan Hawkins, Rachel Gillman, Debbie Marshall, Alicia Kronstedt; Second/Third Row – Carla LaVere, Megan Rooney, Melissa Cudzilo, Eric Oldroyd, Dean Sherman, Elaine Boevers, Gina LoPesio, Ben Holmes, Jodi Neuses, Amanda Lagatta; Not pictured: Diane Howden, Rob Wilkey and Debra Shoemaker.

“We were fortunate to have team members who were specialists in workers’ comp claims and have previously been adjusters,” said Amanda Lagatta, Target’s director of insurance and claims. “We had people with similar skill-sets work together to apply those skills in new ways.”

The team also began re-evaluating whether it was utilizing its third-party vendors in the most efficient way.

“We made several changes with our claims vendors and managed-care vendors, so that we were fully leveraging all the services they provide,” Lagatta said.

Neuses and her team turned to professional associations like the American Society of Safety Engineers and the Minnesota Safety Council to stay updated on the latest guidelines and training. Vendors and professional groups have become a regular source of expert advice for the safety team.

Rebuilding the expertise of the safety and workers’ comp team offered an opportunity to view the company’s challenges with a fresh perspective. It opened their eyes to new ways to improve their programs.

The workers’ comp claims team, for example, made greater use of predictive analytics to streamline and expedite its processes.

“This is a service that we think is unique to us, and has really evolved to become a central part of our advocacy program.” — Amanda Lagatta, director of insurance and claims, Target

Originally, the analytical tool was used to determine at the outset the level of adjuster that should be assigned to a case. It was meant to direct the right level of expertise to a claim. The problem with that model, however, is that it touches a claim only once and does not account for how the claimant’s experience changes over time.

“We subsequently updated the model so that it looks at a claim at different points throughout its lifecycle, not just at the start,” Lagatta said. “As things change, we’ll evaluate the use of a return-to-work coordinator, and when we should call a roundtable to discuss a claim’s progress to develop a new strategy or get different people involved.”

Diving deeper into claims data also helps the safety team pinpoint where injuries are happening, so they can focus prevention efforts where they’re needed most.

Stronger Safety Culture

A culture of safety devoted to keeping team members and guests safe is a critical goal for Target. Efforts are focused on creating a top-down culture of safety throughout the company, including leading off meetings at distribution centers with safety messages, and leveraging an ergonomic specialist to consult on workstation design and merchandise presentation to minimize injury risk. The team also engages the “assets protection” leader at every retail location to take on the role of “safety captain” to reinforce a culture of safety in their stores.

Amanda Lagatta, director of insurance and claims, Target

Amanda Lagatta, director of insurance and claims, Target

Huddles — how the Target store teams refer to their twice-daily gatherings — and Start Up Messages, in which managers communicate the company’s safety message before the day begins and lead their teams in stretching and other warm-up exercises, are another key feature of the safety program.

Signage in stores and distribution centers remind employees of hazards and safety practices they should follow to mitigate them. Training programs for powered equipment were simplified and adjusted to allow trainers and supervisors to control when an employee is ready to be certified and move on to independent work.

“Safety is mission-critical,” Neuses said. “We try to be proactive and continually reinforce that message.”

Advocacy-Based Model

Unfortunately, even the most thorough safety program can’t prevent all accidents. When an injury does occur, Lagatta and her team ensure that the worker is treated with respect and care — and treated quickly.

When a team member is injured on the job, they often don’t know how to navigate the workers’ comp system or how exactly the claims process works. Confusion and frustration can add to the employee’s stress and lead them to delay seeking care.

As part of an initiative to build a more formal, advocacy-based claims model, Target instituted a Workers’ Comp Assistance Center with the help of its TPA, Sedgwick Claims Management Services.

“This is a service that we think is unique to us, and has really evolved to become a central part of our advocacy program,” Lagatta said. “Someone from the assistance center — not the claims adjuster — will reach out to the team member and make the first contact with them. Their job is to reassure the team member that we care and we’re there for them, to familiarize them with the workers’ comp process and answer any questions.”

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Those initial calls are also an opportunity to collect additional information about the claimant and the injury. That data is entered into the predictive modeling system and used to direct the right resources to the case.

Return-to-work coordinators are another critical component of the advocacy approach, and the retailer’s return-to-work program is a differentiator in the industry.

The risk management team has identified suitable light-duty positions for injured workers, and provides 12 weeks of modified duty payroll to support the stores using this program. But sometimes follow-up surgeries are necessary, and recovery can be a difficult road. Post-surgery, injured employees may receive another 12 weeks to accommodate the additional treatment.

Third-party service providers again play an important role in this process. Nurse case managers liaise with physicians and human resource departments to gather the information they need, and keep all parties on the same page. For example, they can analyze an injured team member’s abilities and investigate worksites to determine what is safe and suitable.

“We really rely on our vendors to help navigate that process and make informed decisions,” Lagatta said. “We’re fortunate to have partners we can trust, so we can maximize the impact of our department.”

Since implementing these changes in safety, claims management and return-to-work, Target has seen reductions in claim frequency, length and cost, and has improved the experience for its injured workers. &

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Read more about the 2016 Teddy Award winners:

target-150x150Bringing Focus to Broad Challenges: Target brings home a 2016 Teddy Award for serving as an advocate for its workers, pre- and post-injury, across each of its many operations.

 

hrt-150x150The Road to Success: Accountability and collaboration turned Hampton Roads Transit’s legacy workers’ compensation program into a triumph.

 

excela-150x150Improve the Well-Being of Every Life: Excela Health changed the way it treated injuries and took a proactive approach to safety, drastically reducing workers’ comp claims and costs.

 

harder-150x150The Family That’s Safe Together: An unwavering commitment to zero lost time is just one way that Harder Mechanical Contractors protects the lives and livelihoods of its workers.

 

More coverage of the 2016 Teddy Awards:

Recognizing Excellence: The judges of the 2016 Teddy Awards reflect on what they learned, and on the value of awards programs in the workers’ comp space.

Fit for Duty: 2013 Teddy Winner Miami-Dade County Public Schools is managing comorbid risk factors by getting employees excited about healthy living.

Saving Time and Money: Applying Lean Six Sigma to its workers’ comp processes earned Atlantic Health a Teddy Award Honorable Mention.

Caring for the Caregivers: Adventist Health Central Valley Network is achieving stellar results by targeting its toughest challenges.

Advocating for Injured Workers: By helping employees navigate through the workers’ comp system, Cottage Health decreased lost work days by 80 percent.

A Matter of Trust: St. Luke’s workers’ comp program is built upon relationships and a commitment to care for those who care for patients.

Keeping the Results Flowing: R&I recognizes the Metropolitan Water Reclamation District of Greater Chicago for a commonsense approach that’s netting continuous improvement.

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

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In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

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Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

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How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

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One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]