Risk Insider: Shep Tapasak

Managing Reputational Exposures

By: | July 13, 2017 • 2 min read
Shep is Managing Principal for Integro, and Healthcare Practice Leader for the Southeast. Shep has 25+ years of experience in property/casualty. He is passionate about specialization and innovation. He can be reached at: [email protected]

Benjamin Franklin is credited with saying, “It takes many good deeds to build a reputation, and only one bad one to lose it.”

While a sobering perspective in the 1700s, there is even greater risk in the age of social media and the Internet. Although intangible, reputation can be a valuable asset. And like all assets, it needs to be managed and protected. Following these five steps can help you do so.

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  1. Identify Key Stakeholders

Identifying key stakeholders is critical to understanding what may impact reputational value. Typical stakeholders include: customers, potential customers, employees, prospective employees, regulators, creditors, owners/shareholders, and vendors. Yet not all of these stakeholders are crucial to the brand or reputation of a firm.

For example, in the food and beverage industry, consumers (and prospective consumers) are dominant stakeholders. If they are disappointed, there will be value loss.

In many firms, the responsibility of assessing and managing reputational exposures is not clearly delineated.

  1. Evaluate Stakeholder Expectations

Consider the following hypothetical situation. I own a fast food chain that is well known for fresh, quality ingredients. My dominant stakeholders are customers and prospective customers. If a widespread and well-published E. coli outbreak is traced back to my restaurants, there is a high probability that my dominant stakeholders will take their business elsewhere.

Depending upon how this crisis is managed, there is a risk that my business might never recover. Compare this with Starbucks’ focus on social responsibility issues, and the social media backlash around their announcement to hire 10,000 Muslim refugees around the world. While some portion of potential customers decided to buy their morning latte somewhere else, this plan resonated with the vast majority of current customers.

  1. Establish Clear Roles and Accountabilities

In many firms, the responsibility of assessing and managing reputational exposures is not clearly delineated. Reputation is recognized as important with a degree of focus in different parts of the organization, but with little or no coordination.

With significant reputational assets at risk, a member of senior management should be designated with the responsibility to assess reputational exposures, lead coordination among different departments, and develop strategies to improve resilience.

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  1. Plan for Reputational Resilience

Different parts of the organization often focus upon specific stakeholders. Some are better at planning strategies, while others tend to be more reactive. Crisis or catastrophes present challenges, but if robust plans are in place to help companies navigate crises, there are opportunities to enhance reputational value.

  1. Explore Insurance and Risk Financing Options

The insurance industry is ripe for innovation. There are different kinds of insurance products that can narrowly address risks to reputation. Most are more crisis management in nature, providing expert resources or reimbursement of certain expenses. There are a few more holistic approaches, which can offer advisory services, analytics and some level of risk financing. Captives can provide much needed flexibility in what is currently an immature insurance market.

Conclusion: Reputation can represent a very valuable asset. Crisis should be expected. By planning around these five areas, this asset will not only be protected, but it can be enhanced—even in the face of crisis.

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

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Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

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Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

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More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

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