Risk Insider: Chris Mandel

Risk Management Effectiveness: What Matters Most

By: | November 5, 2014 • 3 min read
Chris Mandel is SVP, strategic solutions for Sedgwick and Director of the Sedgwick Institute. He is a long-term risk management leader and a former president of RIMS. He can be reached at [email protected]
Topics: ERM | Risk Insider

People are always trying to glean the keys to success in risk management. Well, here’s what I know: No two successful practitioners are doing exactly the same thing. Nor are they following a template based strategy. What you can take away from that is that a) there’s no one right way to practice risk management, and b) the best risk strategies are those that are aligned with, if not custom designed to fit, the needs and priorities of the organizations for which they are intended.

What matters most in achieving risk management success? For starters, a thoughtfully cultivated risk culture is prerequisite to long term success. Keep in mind that your employees’ risk taking and risk-managing behaviors — without a specific design and strategy for your intended risk culture — will not likely be the behaviors or culture you most need and ideally desire. Therefore, communicating your expected culture is a pursuit of great value to your long term risk management effectiveness.

Here are 10 other items that, in my opinion, matter most in effectively managing risk. If you operate with these elements in place, you will be more likely to have an effective strategy that other leaders will both contribute to and enable through resources.

Downside Protection Job 1: The first priority is to make sure reasonably preventable loss is addressed through both mitigation and financing tactics. Management and governance rightly assume this is under foot.

Influence and Gumption: Every senior risk leader must have the respect to be heard and the gumption to push back on risk owners and stakeholders with whom they may disagree.

Consistency: With risk process and sub-processes being the way in which the work gets executed, it is essential that their use be consistently applied by all users.

Process Rigor: Processes that produce results and have impact require a rigorous approach to how they are designed, measured for effectiveness and continuously improved.

Data Interpretability: Reporting actionable information is a must for showing results and impact.

Communication Clarity: Beginning with a clear definition of risk itself, an entire sub-strategy for communicating your messaging will ensure you reach the right recipients at the right time with the right message.

Reliable Measurability: Not every risk can or should be quantitatively measured but when you do, make sure it is as believable as possible.

Value Creation: Recognizing and leveraging risk for gain is the necessary evolution of the discipline’s practitioners if they ever hope to move beyond the tactical.

Managing to Appetite and Capacity: Risk cannot be effectively managed without a clear view into how much risk you are taking, want to take and have the capacity to take or assume.

Aligning Risk and Performance: The penultimate outcome for risk professionals is they manage risk relative to performance. Alignment, if not integration, between these disciplines is essential to achieving short and long term goals.

Sure, there are other tactical elements of a good risk strategy and framework, but I believe they will naturally flow out of these elements when put into practice with the proper senior level mandate and regular reinforcement of strategy.

Read all of Chris Mandel’s Risk Insider contributions.

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]