Column: Risk Management

Framing Success

By: | September 14, 2015 • 3 min read

Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

If little goes wrong at your organization, does it mean you have good risk management? Or are you extremely lucky?

When is something a preventable incident, and when is it an accident?

Advertisement




Furthermore, what do we consider an accident anyway? We use all these terms so interchangeably that often I wonder if it is really worth making a distinction between them. Terms used to describe luck, risk, incidents and accidents include the words unexpected, unforeseen, unintended, uncontrolled and chance. I’ve even read that an accident can be deemed a chance event without an apparent cause.

Effective risk management should be evaluated by measuring the effort it took to try to achieve the spirit of risk management.

All this makes a risk manager’s head shake. If it’s all about luck and chance, why bother with risk management efforts at all?

I recently was part of a vivid conversation. A group was lauding their risk management successes because nothing of real significance had befallen their organization for the past few years. Any incidents were minor in nature.

This prompted a curious debate, trying to answer the question: Why were they successful?  Or were they just lucky? Or was it success by design? I was keenly interested to hear the differing opinions and views.

Some felt it was just luck and the right environment for little risk; others felt that maybe the risk management was overly engineered so it was impossible for anything to go wrong. The remainder felt we right-sized our risk management effort. Who’s right?

It’s a question I feel still plagues us as an industry. We struggle to clearly measure the impacts of good risk management. In times like these, I tend to lean toward basic principles.

What is risk management again? For me, simply put, it is a decision-making practice that tries to manage possible deviations from what you are trying to achieve.

Effective risk management should be evaluated by measuring the effort it took to try to achieve the spirit of risk management.

When measuring risk management success, we should try to answer these overarching questions: Does your organization have a process that provides risk information to facilitate decision-making for optimal resource allocation so that the organization can achieve its goals?

Is the risk information sufficient, considering the authority and resources given to the risk manager? Is risk information being utilized for decisions?

Gauging risk managers’ achievements based on the number of adverse events is simply not relevant. Objectives for a risk management program need to measure how well organizations survive bumps in the road. Deterring incidents should never be considered unexpected, unforeseen, unintended. We should not count on luck.

Risk management efforts should measure how well the risk management process anticipates such derailers, and whether risk solutions are routinely designed, trained, institutionalized and rehearsed. And most importantly, are organizational goals being achieved while tolerating hindering events?

Advertisement




Thinking back to my recent debate, the organization’s success seemed to be by design. Risk solutions were right-sized, designed, trained and rehearsed.

The organization’s activities were not incident-free, but they were resilient enough to tolerate setbacks. The group stayed on track to deliver on their objectives for which they are now receiving acclaim. They achieved their organizational goals, and risk management was pivotal to getting them there.

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]