Risk Insider: Jack Hampton

Cyber Security: Beware of the Blind Spots

By: | February 21, 2016 • 3 min read
John (Jack) Hampton is a Professor of Business at St. Peter’s University, a core faculty member at the International School of Management (Paris), and a Risk Insider at Risk and Insurance magazine where he was named a 2018 All Star. He was Executive Director of the Risk and Insurance Management Society (RIMS), dean of the schools of business at Seton Hall and Connecticut State universities, and provost of the College of Insurance and SUNY Maritime College in New York City.

During my time in the military, I was a company commander in charge of trucks that supplied fresh and frozen food to the troops. I lost one of the trucks on a narrow winding road in the mountains in a foreign country when it encountered an oncoming bus filled with innocent civilians.

Advertisement




The 19-year old driver swerved to avoid a collision and went over a cliff. In the memorial service, I praised the unselfish act even as I mourned the loss.

The driver encountered a point of limited vision on the road. Maybe driving too fast. Maybe not. He did not have the life experience to be wary of blind spots. He needed to use extra care.

  • Sony had only 11 people assigned to its information security team. Eight were executives or managers. Three were information security analysts.

The telecommunications highway is filled with places where incidents can occur. There are many stretches of straight road where we can drive at full throttle in terms of megabits per second. At times we seem only to be concerned with greater speed and efficiency, but what about the blind spots?

A security check on potential authorized users of a system illustrates the problem. Bradley Manning joined the Army in 2007, passed an FBI security check, and was given a high-level security classification.

Apparently, a shortage of intelligence analysts caused senior officers to ignore signs of psychological instability. The Army gave him access to top secret communications systems and data.

Access to a system should be based on “need to know,” not “need to assist others with clerical tasks.”

Perhaps the most egregious blind spot example involves Sony Corp. The narrative starts in 2011 when George Hotz, nickname Geohot, objected to the fact that Sony did not allow individuals to create their own games on Sony PlayStation.

He cracked the PlayStation codes and shared his findings. Sony sued him and was in turn attacked by the Anonymous hacktivists group. We think that Sony suffered a loss that exceeded $2 billion.

What is the lesson learned? Do not invite angry outsiders to your table.

In 2014, the company announced plans to release a movie depicting the assassination of the North Korean leader, Kim Jong-un. Sony was aware of the anger of a nation with extensive capability to hack sophisticated computer systems.

Three weeks prior to the movie launch, Sony IT personnel met with representatives of a “threat-intelligence” firm to discuss safeguards for its system. Fortune magazine documented Sony’s behavior, which is quite horrible and will not be related here.

A few highlights:

  • In 2007 the top information security officer at Sony Pictures said it was a “valid business decision to accept the risk of a security breach” and Sony would not invest “$10 million to avoid a possible $1 million loss.”
  • Sony had only 11 people assigned to its information security team. Eight were executives or managers. Three were information security analysts.
  • Advertisement




For years, senior executives failed to realize the exposure and repeatedly declined to take greater precautions. The company proceeded full speed ahead somewhat oblivious to the blind spots that warn of impending disaster. From all indications, we cannot isolate Sony with this problem.

We need to change our behavior even as we rebuild the information highway.

New Jersey did it in the 1950s with Route 22. This busy stretch of road was the site of numerous head-on collisions. A “Jersey barrier, a low concrete wall dividing two-way traffic, was developed at the Stevens Institute of Technology. The federal government and most states use it today to save lives.

When will we create a successor to the winding and narrow two-lane information thoroughfare that we call the Internet? Until we do, we must pay far more attention to the blind spots.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

Advertisement




That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

Advertisement




Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]