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

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.

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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.

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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]