Risk Insider: Grace Crickette

The Art of War and ERM – Energy

By: | June 6, 2016 • 4 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: ERM | Risk Insider

This is the ninth post in a series from Risk Insider Grace Crickette on how to gracefully bring together traditional risk management, change management techniques and enterprise risk management concepts. The series is inspired by strategies devised by Sun Tzu, a Chinese military general and philosopher.

Make ERM, Not War

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Art of War Key Principal: Opportunistic Flexibility In Adapting Strategies And Tactics To Situation

The way to capitalize on the endless opportunities created by ever-changing conditions is to become engaged as a part of a well-thought-out plan and be flexible in adapting tactics within the context of each pre-determined strategy.

The fifth chapter in Sun Tzu’s book focuses on the Creative or Energy mode. Our application is that this is where the greatest amount of preparation and on-going effort takes place in implementing enterprise risk management.

From our menu of common elements of an ERM program, let’s move on to the fourth element: Form multidisciplinary groups focused on ERM and specific initiatives

In my last post, I advocated for independence, but strong collaboration and sharing of information between various groups in an organization. The ERM program can become the framework that brings the various activities together and provides the forum to create integration and collaboration.

Now, let’s get “the band” together.

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Who is in the ERM “band” and what they are tasked to do, has varied greatly throughout my career. It was influenced by the type of organization, the organization life cycle, leadership’s directives and for what purpose the group was formed.

In all cases the ERM groups were productive and helped to elevate the organization’s understanding of risk. This happened not because of the type of group that they were, but because there specific objectives and the activities that were made very clear.

I would advise not getting too hung up on having your top leadership in the band — it can be great if that happens, but don’t put off forming a group if you don’t get the CEO to chair. Here are some examples:

Risk Management Committee: Made up of middle managers with a focus on a narrower band of risk, but with an ERM lens on understanding that operational risks have an impact on reputation, finance, compliance, etc. as depicted: Hazard_700x525

 

ERM Panel: Executive sponsorship with membership at all levels of the organization focused on supporting the ERM administrative team with implementation across the organization.

Board Risk Management Committee: The company’s board forms a risk management committee (or committee by another name) and the risk manager reports into that board on the progress of ERM — or the risk manager reports to the full board (or both).

Audit, Risk and Compliance Committee (ARC): Executive sponsorship with formal charter and with members from middle management to executive management, with reporting in by various individuals and groups under an ERM framework. ARC_700x525

Workgroups: Groups formed under a larger committee, panel, or board committee as described above, to address a particular issue or area of risk; or as an independent long standing group that reports into the ERM department.

Example: Establish Workgroups

The ____ committee/office may sponsor standing work groups to collaborate on projects and programs that have benefits to the organization. This structure will allow for expansion and contraction of groups as needed and reduce the number of groups and meetings required to address the wide variety of risks that the organization must address.

The workgroups will not be formed without clear written process and expectations for these work groups. The goals of any workgroup formed will include:

    • A. Produce work products that improve the effectiveness of the organization in delivering on the strategic plan;
    • B. Provide a forum for the exchange of professional ideas;
    • C. Allow participants to share common experiences and solutions related to a particular focus specialty, i.e., safety, financial controls, continuity planning, security, etc.;
    • D. Act as subject matter expert advisor to the _______committee/office;
    • E. Review challenges common to the organization and recommend a course of action;
    • F. Review new or updated regulatory requirements and recommend action plans;
    • G. Review new and emerging technologies.
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Key Takeaway: Implementing ERM takes Energy and Creativity, forming groups exponentially increases the energy around your ERM Program.

Don’t get too hung up on what your groups’ structure and membership looks like — just get the band together and start making some music.

Bands are notorious for losing members (mostly drummers!!), so accept that your ERM band will change over time, and Rock On!

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

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]