Risk Insider: Grace Crickette

ERM and the Art of War — Energy

By: | October 10, 2016 • 3 min read
Grace Crickette, a leader in enterprise risk management, is special administrator, Finance and Administration for San Francisco State University. She can be reached at [email protected]
Topics: ERM | Risk Insider

This is the tenth post in a series from Risk Insider Grace Crickette on how to gracefully bring together traditional risk management, change management techniques and enterprise risk management concepts. The series is inspired by strategies devised by Sun Tzu, a Chinese military general and philosopher.

Make ERM, Not War

rainbow peace sign copy

Art of War Key Principal: Opportunistic Flexibility In Adapting Strategies And Tactics To Situation

The way to capitalize on the endless opportunities created by ever-changing conditions, is to become engaged as a part of a well thought out plan and be flexible in adapting tactics to those ever-changing conditions within the context of each pre-determined strategy.

Chapter V, focuses us in on moving to the Creative or Energy mode, wherein the greatest amount of preparation and on-going effort takes place in implementing Enterprise Risk Management. From our menu of common elements of an ERM Program, let’s move on to the fourth element: Form multidisciplinary groups focused on ERM and specific initiatives

In my last post, we looked at the importance of forming groups to support the ERM initiatives – getting the band together. Once you have the band together, then what?

Provide a Clear Vision and Specific Tactics and Outcomes

Here are some ideas and examples on how to think about, create and execute your vision.

• Establish a sense of Urgency

• Examine the market and competitive realities

• Identify and discuss crisis, potential crisis or major opportunities

From “Leading Change” by John P. Kotter

• Develop estimates – outcomes/targets

• What is our value message?

• Manage the barriers!

From “The Art of War”

Vision Statement and Strategy (Tactics):

Our mission is to enable all members of our organization to identify and manage risks associated with their activities, consistent with the strategy and objectives set by our leadership.  By strategically managing risk we can reduce the chances of loss, create greater financial stability, and protect our resources

Advertisement




Strategy: Enterprise Risk Management. We will move towards an enterprise approach to identifying risks and managing risks including financial, business, operational and governance risks

Strategy: Identifying and Reducing the Cost of Risk. By identifying and analyzing the full cost of risk we will develop strategic plans to reduce the cost and free up resources to be used for meeting the University’s mission

Create a Sense of Urgency With Specific Targets

Here’s an example of a call to action with a specific measurable outcome within a specific time.

Mission: Reduce the Cost of Risk
by 15 Percent in 24 Months

What was the outcome?

Reduced Cost of Risk
by 16 Percent in 18 Months

The organization exceeded the call to action and delivered at a higher percentage and in a shorter amount of time. How was this possible?

Leverage the power of the actuary! Analyzing data beyond frequency and severity married with deep inquiry into a specific area of operation enables the ERM practitioner to be capable of determining the changes that can be made to obtain very specific results.  This allows you to be almost certain of the outcome. Measure twice and cut once!

Focus. Instead of trying to make many changes at once, make very specific and incremental changes.

Have your actuary present alongside you to support the needed change and educate your organization, and through that process identify your Champions and Supporters.

Bring your Champions and Supporters together and share the vision, the target outcomes, and train them in the tactics to make the change.  If possible make this an exciting event rather than a meeting.

Bring your Champions and Supporters together to launch your change. Make it an exciting event rather than a meeting.

Bring your Champions and Supporters together to launch your change. Make it an exciting event rather than a meeting.

Move rapidly. Stay focused; deploy as many resources as possible to your target.

In addition to your Champions and Supporters, there are at least three types of people that you have to manage when implementing change:

• Group 1: People who want the change but have been disappointed in the past because change has not happened.

• Group 2: People who don’t want any change.

• Group 3: People who don’t notice change until after it has happened.

If you feel the need for speed … the results will be:

• Group 1 will be excited because they see the change actually happen.

• By moving rapidly you will have good results before Group 2 can derail you.

• The first that Group 3 will hear about the change will be the results!

I suggest that you brainstorm with your team regarding why some may be against the change and prepare FAQ sheets with the answers already completed.  This way you are prepared for battle.

The result of being prepared, rallying the troops, and moving quickly is that you have a quick win that gives you, your team and your ERM program credibility.

Now repeat!

A Strategic View of Risk – Examples of Outcomes

crickette-chart-101016

Communicate your good results and then identify other opportunities. In this example there are four key opportunities identified that will add value and that are measurable.

• Efficiency = reducing the number of days to execute a process.

• Cost of Risk = reduce the cost of claims.

• Cost of Borrowing = improved credit rating because of ERM capabilities.

• Redundancy = developing an ERM IT platform can reduce the number of IT systems needed.

The opportunities will differ by organization, but I’m certain, ERM Warrior, that you will seize them!

Key Takeaway: Implementing ERM takes vision, urgency and the capability to focus and execute rapidly. Leverage the power of the actuary and do deep inquiry before you set your targets. By messaging your vision with specific outcomes you increase your chance of success because people know where you are going and they will follow!

Remember — It’s not Risk Management, its Change Management!

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]