The 7 traits of effective risk reduction leadership in your organization

I read an article the other day titled “The 7 traits of effective leaders”. I totally agree with the article, but started thinking about how these traits relate to effectively reducing risk within a business. Here are some thoughts on this topic:

1) Make others feel important about their role in risk reduction

If all the directives and ideas about risk reduction come from you, how effective will they really be? The best ideas always come from the people that are closest to the action.

2) Promote a vision about risk reduction

Followers need a clear idea of where you’re leading them and they need to understand why that goal of risk reduction is valuable to them. Your job as a leader is to provide that vision.

3) Follow the Golden Rule

Treat your followers the way you enjoy being treated. An abusive leader attracts few loyal followers. If you are going to get people excited about risk reduction, they need to believe in you as a leader.

4) Admit mistakes, whether related to risk reduction or not

If you have made an error that leads to higher risk or losses for your company, ‘fess up! If people suspect that you’re covering up your own errors, they’ll hide their mistakes, too, and you’ll lack valuable information that can help you reduce more risk in your organization.

5) Criticize others about losses or potential losses only in private

Public praise encourages others to excel. If someone prevents a claim or reduces a claim, praise them to everyone! However, public criticism only embarrasses and alienates everyone, and discourages others from reducing risks within their area.

6) Stay close to the action

You need to be visible to the members of your organization, and they need to know you care about reducing risk within your business. Talk to people, visit other offices and work sites, ask questions, and observe how business is being handled, and what potential losses are prevalent. Often you will gain new insights into your work and find new opportunities for motivating your followers.

7) Make a game of competition with risk reduction

The competitive drive can be a valuable tool if you use it correctly. Set team goals, and reward members who actually perform at reducing risk within the business. Examine your failures, and celebrate your group’s successes.

Risk and the Meaning of Risk:

When most people think of “risk” they associate a negative connotation with the word, and assume that risk is inherently bad. However, lets take a closer look at the definition of risk, and the possible impacts it has on a business project. A risk is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives." While most focus on the negatives of risk, they fail to take into consideration the positives associated with the term. As experienced “Risk Managers”, Commercial Risk Service is able to not only protect your business from the potential negatives, but we see the positives in a risk management plan that allows for more business profitability. Like the phrase states “the higher the risk the higher the reward”, it is our job to find that balance in risk vs. reward, protecting your business first (risk) and increasing your profitability second (reward).

Within a risk management plan there is usually a “risk strategy” and finding this “strategy” that fits your business is vital to the outcome of different business projects or your company as a whole. There are four different strategies when it comes to risk management and they are; accept, avoid, mitigate, and transfer. Each project your company undertakes needs careful consideration as to how the project will manage that risk. If the strategy that is in place currently is not correct it could be costing you thousands of dollars, and possibly putting your entire company in jeopardy. Commercial Risk Service knows risk management and we are experts in risk strategies. Maybe it is time you had an expert examine just how your company handles risk-both the positives and negatives.

Commercial Risk Service
Risk Specialist
Clay George

Harassment Remains Major Workplace Problem

You would think that in the “enlightened society” we live in today, we should be past having any problems with harassment issues in the work place. Oh yea- ever heard of Herman Cain? He is just another in a long line of employers- those that are well-known and those that are relatively obscure- that have created issues in the workplace with sexual harassment.

Let’s think about it- what issues do we have to deal with now that may add to our harassment risk in the workplace?

---Greater informality in today’s workplace
---Widespread use of social media
---Knowledge by the working class of exactly what harassment is

Experts say employers should use a strong policy, training and an accessible complaint program to discourage and address sexual harassment. While the number of sexual harassment complaints filed with the U.S. Equal Employment Opportunity Commission fell 7.7% in 2010, sexual harassment remains a significant problem. According to the EEOC, there were 11,717 sexual harassment charges filed in 2010. What is worse, 64% of organizations received at least one sexual harassment claim in the previous two years.

However, the types of sexual harassment have changed over the past 20 or 30 years. Where previously it was more common to see where women were asked for “sexual favors in exchange for some employment benefit, now the vast majority are hostile environment theories. While the means may be different, with today’s use of text messages, emails, Face book posts and tweets, as long as we have males and females in the workplace, this sort of activity will probably continue.

The proliferation of texts and emails has also increased the risk of issues concerning sexual harassment. People are becoming more comfortable sending inappropriate material via an email or text message than they would in person. Now you can harass someone without seeing them or touching them! You can create a sexually hostile work environment via email from the floor below or the office next door. There are also instances where people may not intend for something to be harassment, but it may very well be perceived that way; and sometimes people just don’t think.

What is the best practice for confronting sexual harassment?

• A strong training policy

Employers should be sure they have updated, sophisticated social media policies that address the role social media may play in sexual harassment. Anti-sexual harassment policies should be updated to reflect today’s social media, and social media policies should address its potential role in this area.

One thing that training supervisors need to be aware of is that they can be held personally liable for sexual harassment.

Even if the company has insurance or provides a defense, the company cannot provide them with coverage for punitive damages.

• A readily accessible complaint procedure

You have to develop a culture where people feel they don’t need to put up with sexual harassment, where employees can let someone know and something actually will be done about it. There should be frequent and regular communications with the employees, and I don’t mean standing up in front of a room and lecturing employees about it. It requires being truly “out on the floor” communicating with everyone.

• Responsive investigations

An easily accessible complaint and investigation procedure also should be in place. Employees should also be able to make the complaints anonymously if they feel they need to do so.

• A corporate culture that discourages sexual harassment

Sexual harassment simply put can’t be tolerated at any level. If that culture is created throughout the organization, you have much less chance of having a problem.

Sexual harassment is still a major issue, but one that can be dealt with relatively successfully if handled up-front and consistently.

Bobby Bland PWCA, CIC
Vice President
Commercial Risk Service

Is it "at-work" or "working-out"?

The American Heart Association says that walking 10,000 steps per day can help reduce the risk of stroke by 70%, and initial heart attack rates by 90%. The American Diabetes Association says that walking 10,000 steps per day can help reduce Type II diabetes by 50%.

Companies investing in the walk-at-work movement machines are the newest craze. Several manufacturers are producing desks that will accommodate treadmills so the employees can exercise WHILE THEY WORK! Many companies, such as AOL, AAMD, BestBuy, Bristol Myers-Squibb, Coca Cola Bottling, Consona, Eli Lilly, Microsoft, Pixar and Toyota are trying out this model.

Even in our office, Beth Bowman, whom many of you know, came to me with a proposition. She wanted to STAND at her desk all day instead of sitting. She was having back problems, and she believed it was partly because of sitting all day. We

accommodated her, and raised her desk enough that she can stand all day. She doesn’t have a treadmill under her desk, but I am happy to report that all of her previous back ailments are gone! She believes a large part of these results are because of standing all day instead of sitting. It also burns more than 700 additional calories daily as well!

However, companies investing in the walk-at-work movement could expose themselves to employees filing cumulative trauma claims, said worker’s compensation expert Paul Braun, with AON Global Risk Consulting. “The very simple issue around this type of exposure is that if somebody gets hurt at work and the company has this kind of arrangement, the claim will be accepted; there’s no way around it.” Braun said.

There is a conditional trade-off here- on the one hand, you are helping employees to exercise more and maintain a healthier lifestyle, which in the long run could save you on your group health plan. In addition, you have created a happier, healthier employee that is probably more productive in the long run. On the other hand, the simple fact that you are helping employees to walk while working could open you up to more exposure from a Worker’s Comp standpoint. (Even if a person was running every night after work and they were diagnosed with an ailment from too much stress of running, the injured employee could still maintain that the injury was sustained at work, and it would be paid.)

Don’t get me wrong- I think it is a great idea. However, you need to know what you are getting into when your employee wants to “walk at work”!

Bobby Bland PWCA, CIC
Vice President
Commercial Risk Service

ID Theft is up 34%- What can we do?

The number of U.S. households and businesses that fell victim to some kind of identity theft rose to 8.6 Million in 2010, costing the victims about $13.3 Billion, the U.S. Bureau of Justice Statistics said Wednesday.

Each person or business who reported a dollar or more in identity theft lost an average of $8,200 in 2010. About 7% of all households were victimized and 11% of businesses were victims as well, which is up from 5.5% in 2005. From 2005 to 2010, the misuse of an existing credit card account was the fastest-growing type of identity theft. Reports of credit card information stolen from businesses and people’s trash, and from legitimate card readers by devices attached to machines such as ATMs that record the information for use later also made up a large portion of the losses. Many of these cases involve relatives, roommates, or in the case of businesses, an employee stealing information from people close to them. Also, Internet shopping can put more people at risk.

We recently had one of our business customers that fell prey to identity theft. The business’ credit card was stolen from their mailbox before the owner could retrieve the mail. By the time they found out about it, this theft had fraudulently bought over $22,000 worth of merchandise. As business owners, what can you do about this growing problem? What safeguards are available to you? Here are a few:

1) Make sure when you order something with your business credit card that it is on a secure data line. There are ways to check this before ordering.

2) Be aware of charges to the credit card, and have a limit set where the card company will automatically contact you when a purchase is made over that limit.

3) Many credit cards are stolen through the mail, with thieves taking the cards as they are sitting in the business’ mail box. Make sure you have a P.O. Box for all that type of mail to be sent to. NEVER put your actual physical address on the return addresses part of the envelope- only your P.O. Box number.

4) Use common sense- be involved in the use of your company credit card, and limit access to the card to a bare minimum.

5) Make sure you have purchased crime coverage for your business. If should include Blanket Employee Dishonesty and theft of property.

As business owner’s, we must all be aware of the consequences of identity theft. If can be devastating.

Bobby Bland PWCA, CIC
Vice President

Commercial Risk Service

ADA to Crack-down on Hotel Industry

Back when I was playing in baseball tournaments and traveling every weekend, we had to stay at different hotels in strange and non-familiar towns. One reprieve from being out in the sun all day was getting back to our hotel and going straight to jump in the pool-it was amazing! However, unless hotel owners are ready to shell out some major money, the days of enjoying a hotel pool may be over.

The Department of Justice along with the American with Disabilities Act have imposed some new strict regulations concerning hotel pools. Taking effect March 15th, 2012 if you do not have an ADA compliant chair lift at every one your pools and hot tubs, you will be forced to shut it down or face potential fines.

Let’s clarify what they are expecting of hotel owners to purchase to meet these new requirements: They are mandating that every pool has an ADA complaint chair lift to assist people with disabilities getting in and out of the pool. If you have more than one pool, this requires you to purchase more than one lift, and after pricing these items out, it can get extremely expensive. At an average price of $5,000 dollars, this new ADA requirement could be devastating for your business. There are several hotels in Arkansas that have decided to shut down their pools and hot tubs all together instead of purchasing multiple chair lifts.


This is a major decision hotel owners are going to have to make in the near future, and it could be one that would affect your entire operations. No matter what the decision you come to, the question is are you prepared?

Clay George
Risk Specialist
Commercial Risk Service

John Wooden: The Path to Greatness

After his death last year at age 99, accolades poured out for John Wooden, the greatest men’s college basketball coach ever. Wooden had 11 national titles. Collectively, the four coaches with the next most have 13!

“What Coach Wooden did will never be touched”, says one of the all-time great coaches, Mike Krzyzewski. “You can have a pretty good argument about who is the second-greatest college coach of all time. There’s absolutely no argument about who is the greatest”. In 27 years at UCLA, Wooden sometimes won with more talent and sometimes with markedly less. Here are some glimpses of his greatness:

On skill: Wooden insisted on mastering details He believed that “We are what we repeatedly do.”

On discipline: Wooden might say, “You don’t want to be late coming back.” If the player was late, he’d be benched for the game. One star, Bill Walton, arrived for his final season with wild hair. Wooden said “Bill, that’s not short enough. We’re sure going to miss you on this team.” Walton rushed to the barber.

On winning: He was a ferocious competitor whom Walton called a “caged tiger.” Before playing Duke in 1964, he asked his team, “How many of you remember who finished second last year? They don’t remember who finished second.”

On worth: Sports commentator John Feinstein tells the story from 1984 when Wooden wheeled around his ill wife, Nell, at their last Final Four together, visiting friends. As they were leaving the hotel lobby, they drew a spontaneous ovation from all the other college coaches. Asked about it in 2006, Wooden said, “There is nothing like the respect of your peers.” Feinstein said, “As a coach, he had no peers. And he was a better man than he was a coach.”

Here’s my question:
All of us run or help run businesses. Are you insisting on the discipline that John Wooden demanded? Are you as focused as you need to be on all areas of your business? Are you creating the quality within your organization that you need to do? Are you treating your employees the way you would want to be treated?

If not, maybe now is the time to start. John Wooden was not a “Great Man”, just a man that did great things every day.

Bobby Bland PWCA, CIC
Vice President
Commercial Risk Service