Column: Risk Management

Service Is Value

By: | September 15, 2014 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

Those who know me in the risk management industry know that I am a real stickler when it comes to using vague words or terminology. Ironically, my word obsession first started when I explored the true meaning of the word risk.

We use this word everywhere in our industry but do we really understand what it truly means? Moreover, do we in the industry all use the word consistently and with the same intention?

How is value derived from your risk management programs? I recall an expression that resonated with me: “Value is created by being of service.”

Another choice nebulous word that often makes me crazy is the word, safe. Honestly, what does that mean? To add to continued aggravation, a new word recently made me pause — the word is value. My word definition quest started when someone asked me: What value was my risk management program providing? It is a fair question, but if only I truly knew what it meant.


An accountant sees value as the monetary worth of something. Economists view value as the utility of something and its power of trade. Marketers understand value through the eyes of the consumer and their perception of the worth of something.

So, how do risk managers recognize value? How is value derived from your risk management programs? I recall an expression that resonated with me: “Value is created by being of service.”

Think about an item or service that you own that you simply couldn’t live without. I think of my smartphone. It is my portable email, calendar, music system, calculator, flashlight, etc. — and let’s not forget, my mobile phone too. This gadget truly serves me and without question, I truly value it. Value in this case is a measure of the sheer size of the hole it would leave if I lost it.

In much the same way, risk management must serve an organization in an essential way for it to truly be of value.

Imagine having a program that forces the clear articulation of an organization’s strategy and goals. Which brings forward intelligence that enables more sophisticated operational and strategic decisions that can drive optimized and sustained performance.

Information that was derived from the program allows an organization to become more agile and respond more quickly. This allows an organization to avoid unwanted situations or seize opportunities before its competition does. What a program. What a service. What value.

This is the value of a solid enterprise risk management program.

An enterprise risk management (ERM) program creates a neutral centralized line-of-sight to risks and issues. This consistent rendition and single source of truth around sensitive risk issues allows the organization to avoid confusion or misinterpretation of risk events with stakeholders.

The risk intelligence created by an ERM program helps to defend the allocation of scarce resources on risk management activities.

By having a logical and consistent means of understanding risks, the organization can more easily defend its decisions around investments in risk response activities and its allocation of scarce resources.


Also, by centralizing decisions around risk management activities, the ERM program forces governing entities to truly recognize their organization’s risk position.

By making centralized decisions around which risk controls to institutionalize, leaders can examine and follow a collective, not individual, risk appetite or tolerance for risk and protect their shareholders.

That is what I call valuable service. But I guess the best way to measure if your ERM program is truly valuable, is by seeing how many people would miss it if it was gone.

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.


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.


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]