Column: Risk Management

Risk, Resilience and Results

By: | February 22, 2016 • 2 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

Oil prices slumped to $28 per barrel as I write this. We have seen price slumps in the past but, maybe it’s just me, the dip seems to have happened very quickly.


There are several very rational explanations circling, but how did we allow ourselves to get into this mess?

After a quick survey of all the global oil companies’ websites, I noticed every one had a link to a Corporate Citizen report outlining their status and progress towards “sustainability.”

Essentially, they believe that to achieve sustainable success, they must act in the long-term interests of their shareholders, the planet and society, and create long-term value and benefits for investors and communities in which they operate.

Sounds great. So what happened? What is the plan for investors and communities now that their investments have tumbled in value?

I applaud organizations on the pursuit of sustainability, but I now question their approach.

I think of a story of a mountain town. For generations, local shepherds raised sheep in a “sustainable way” — treating the herds well, hiring locally, never overgrazing fields or impacting the water supply.

The town was deeply invested in its sheep and had pride and joy in the goat cheese they sold globally. But what if the bottom dropped out of the cheese market? In a global commodity market, “sustainable” practices alone won’t keep them in business.

The idea of “sustainability” is commonly misunderstood, often paralleled to self-sufficiency. But virtually nothing is self-sufficient. We exist in a globalized, highly connected world.

We are vulnerable to real-world disruptions ranging from political upheavals to hurricanes and earthquakes. Beyond sustainability, we must actively build a culture that is much smarter, more resilient.

Talk about resilience sounds an awful lot like good enterprise risk management.

Imagine if our shepherds came up with other ways to employ their knowledge and resources, such as encouraging the production of wool sweaters with local weavers.

Weathering bumps in the cheese market would be much easier. Diversifying like this builds resilience into the community and its continuous journey to sustainability.


Here is the funny part. Talk about resilience sounds an awful lot like good enterprise risk management. Assessing wide ranges of risks and creating response plans is akin to ERM.

We have little control over nature, but we do have control over how we respond and adapt. That is how we become resilient.

According to Dr. Tom Mitchell and Katie Harris from the Overseas Development Institute: “Resilience, a concept concerned fundamentally with how a system, community or individual can deal with disturbance, surprise and change, is framing current thinking about sustainable futures in an environment of growing risk and uncertainty.”

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.


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.


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]