Risk Insider: Grace Crickette

Modifying ERM to Fit the Organization

By: | June 19, 2014 • 2 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: Claims | ERM | Risk Insider

One change management technique that I leverage regularly is adaptation: taking what I believe to be the best or “truest” form of enterprise risk management and modifying it to fit the organization.

I recently worked with a group of business leaders in the health care industry that all had a desire to implement enterprise risk management (ERM), but were deeply entrenched in traditional risk management, specifically incident and claims management.

Frankly, they did not have a clear picture of what ERM would really “look like” or how it might manifest in their organizations.

What became clear was that for this group to begin to get any traction with ERM, their program would need to be incorporated into existing programs. The following is what I proposed.

To gain an enterprise view of incidents, events and claims arising out of the organization, develop an ERM approach to evaluate incidents, events and claims.

The channel by which an organization can efficiently and effectively promote a comprehensive framework for making risk management decisions — which maximize value protection and creation by managing risk and uncertainty and their connections to total value — is by integrating risk management practices into strategy.

This concept can be depicted as a tree, wherein the high visibility risk events (i.e., patient injury) are represented as the branches of a tree. It is the underlying systems that give rise to these events which are the root causes (the roots), and the trunk of the tree is the management channel through which the health of the roots flows to either support or weaken the branches.

We place strategy in the management channel (the trunk) and it is through the integration of the consideration of risk into strategy that the tree can be strengthened.

RiskTree_Crickette_700pxStrategy or strategic planning manifest as processes and programs in a variety of ways in an operation:

• Human Capital: Recruitment, onboarding, training and retention.

• Technology: IT architecture, security planning, vendor management.

• Legal/Regulatory: Compliance programs, quality review, internal and external audit.

• Operational: Procurement, supply chain, facilities planning, long range development plans.

• Financial: Budgeting process.

• Hazard: Emergency management and business continuity planning.

By integrating the consideration of risk into existing programs and processes rather than having the risk activities outside of those programs, the organization gains efficiencies, and the risk activities add value by improving the likelihood of success by minimizing friction and disruption that ultimately impacts customer (patient) satisfaction.

The role of the ERM practitioner is to support the integration of basic risk management techniques into existing programs and processes and assist management in identifying the problem areas, determine resolution and track and trend progress.

An example of integrating ERM into existing human resource (HR) processes:

Crickette_Chart_700px

Key Takeaway: Gain traction through adaptation.

ERM & Strategy: Explore and understand where strategy and strategic planning lives in your organization and collaborate with others to incorporate the consideration of risk in to those programs.

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

Read all of Grace Crickette’s Risk Insider contributions.

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]