Driving Innovation: How Risk Managers Can Lead with Innovative Thinking

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Logo, RIMS. Text, Women Leading Innovation in Risk Management. Names of the speakers along with their position listed.

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SHERRY HERSEY: Thank you very much for joining us today for the Women Leading Innovation and Risk Management panel.
I'm Sherry Hersey and I'm the Marketing Strategy Lead for Constitution State Services and Travelers. And I'm excited to have four fabulous, very accomplished women joining me on the panel today.

Before we jump into questions with our panelists, I'd like to cover some foundational concepts in innovation and then we'll have some Q and A with our panelists.

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Logo, RIMSLIVE2021. Text, Innovation.

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SHERRY HERSEY: So innovation, when you typically think of innovation, you may think of a groundbreaking idea or a patentable idea. Something very different and new in the marketplace. But innovation is really a process of translating an idea or an invention into something that creates value. So this process is what you'll hear from our panel on.

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Logo, RIMSLIVE2021. Text, Types of Innovation. Graph of innovation types is displayed.

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SHERRY HERSEY: And you also may think of transformational type innovation. That groundbreaking idea when you think of innovation. But there are many types of innovation. There's adjacent innovation, which is innovation in areas that are functions that might be parallel to you. So if you're in a workers compensation claim or risk management, you might learn ideas and develop new ideas from finance or from quality assurance or engineering. So those are in adjacent type innovations.

And then there's incremental innovations, which are smaller changes that add up to something big. So innovation doesn't have to be a groundbreaking idea, it can be adjacent or incremental type innovation as well.

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Logo, RIMSLIVE2021. Text, Innovation Framework Examples.

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SHERRY HERSEY: And in innovation you'll also hear many buzzwords, and these on the screen are examples of innovation frameworks. You may heard of design thinking, user-centered design thinking in new boxes from Boston Consulting Group. I want to share with you something called minimum viable product and many of you may already be using this concept.

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Logo, RIMSLIVE2021. Text, Minimum Viable Product (MVP). Image is displayed showing how to build and how not to build MVP.

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SHERRY HERSEY: What minimum viable product is in this example, if you have an idea for a futuristic new type of transportation. What a minimum viable product does is it creates phases of development, but your phases have to be operational and functional. So in this case, as you're building that futuristic mode of transportation, you're not just delivering a tire, you need to follow the bottom path which is to deliver skateboard first because it's functional as transportation. So you'll hear more about minimum viable product test and learn phasing from our panelists.

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Logo, RIMSLIVE2021. Text, Women Leading Innovation in Risk Management. Images of panelists and brief description of their role displayed.

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SHERRY HERSEY: So now let's join our panelists.

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Logo, RIMSLIVE2021. Video of the panelists displayed.

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SHERRY HERSEY: As we saw in the introduction there are many forms of innovation so now let's hear from our panelists on their current role and a challenging change that they've had to lead in their current or in a past role. Let's start with Roxsann.

ROXSANN WILSON: Hi I’m Roxsann Wilson. I’m the VP of Enterprise Risk Management for safe flight. Happy to be here with you today. I’ve worked for a number of companies that have gone through major changes, a couple spin-off companies where they were spinning off of large organizations into more nimble or agile organizations. And during those times you really need to change your way of thinking. So you know the example I have is more of an innovation not in kind of what we did, but kind of how we did it.

As we moved into these smaller organizations in the med tech space we really needed to be more agile, we needed to be able to respond quicker than in a former larger more bureaucratic organization. And so in risk management it necessitated a shift not from a no culture but from a “yes if” culture. And so what we had was discussions with the business on different initiatives that they wanted to do and we took with it a mindset of, yes you can do that if you put in place these controls or if you put in place these mitigations. And it led to a more collaborative and better product at the end of the day. And it made sure that risk was included at the table and not something to be worked around.

So like I said it was not a product in the traditional sense but it was an innovation and how we were operating as an organization.

SHERRY HERSEY: Yes, and that process and that “yes if” type of mentality and culture is very important in encouraging innovation. Jennifer?

JENNIFER RENO: Thank you Sherry. I’m Jennifer Reno, I’m the Global Risk manager for QVC. I have an interesting story in that I am actually the first manager in the history of QVC although QVC is a 35-year-old company making over 14 billion last year. Never had someone before five years ago so it was a great opportunity to move from the chemical industry into retail and media and learn about a new industry. But I quickly found out that my leader's expectation of my role was very different than the need that we had. So we really had an interesting opportunity to craft what the role in the department would be based upon the needs of our entities around the world.

So one of our first challenges was that each country within our group had actually been set up on its own and sort of as I like to say pushed off from the island and just told to operate. And so we had a lot of competing programs, we had a lot of overlap, very few shared programs. So I spent a lot of time really getting to know each of our countries and their business and sort of where they came to be at that point and then we set about sort of untangling everything. And part of that entangling was also entangling ourselves from our parent company who was sort of sitting on a lot of coverage and not really contributing to anything and creating something that was a little more of a burden than a blessing.

So you know we really set out with the challenge to create a center of excellence for risk management and insurance at QVC and I’m pleased to say that you know in that first year just through a lot of that conscious untangling we were able to save about three million dollars. So today, we have a much more workable portfolio of insurance, we understand where our risks are. I think it's always important to ask why and to question the status quo, obviously politely and respectfully. But it is important to sort of understand where you came from and where you think you’re going.

SHERRY HERSEY: Thank you. Jana would you tell us more about your current role and a challenging change that you've had to lead in your current position or in a past position?

JANA UTTER: Sure, thank you Sherry. This is Jana Utter and I serve as the Vice President of Enterprise Risk Management Forestine Corporation and I’m actually going to go back to earlier in my career for the challenge that I’m going to discuss because I think that seizing opportunities and taking on challenges enables us to really move down a path that helps us to take on more challenges and grow throughout our career.

So I would encourage everyone that's on the call here in the presentation today to think about those challenges and opportunities, if you're early in your career, midway through your career, even later in your career and really try to seize them.

And so I had the opportunity early on to start an Enterprise Risk Management program. So Sherry talked a little bit about transformational change and also about the creation of a minimum viable product and so I think this challenge kind of takes on both. I was working for a large electric utility at the time of the fall of Enron. Some of you, whether you're in the energy sector or not, may remember when Enron suddenly went bankrupt in the early 2000s. And so boards of directors for energy companies for all of a sudden are frantic about what's our enterprise risk management position and they were focused more on market and credit risk. And so at the time, the CFO had come to me and asked if I could launch an enterprise risk management program. And I had obviously no prior experience, had done some energy portfolio risk management, but I kind of went along with it and I think you can get away with this sometimes kind of the fake it till you make it sort of approach. And so that was a challenge and taking on that challenge, one way that I was able to be more successful in creating a minimum viable product for risk management was connecting with other people in these sector. So at the time in the early 2000s, there was a committee of chief risk officers that was formed in the energy sector. I had the opportunity to join the CCRO and work with other people from the energy sector all across the country that were trying to figure out the same thing I was. And so seize those challenges and network.

SHERRY HERSEY: And RIMS provides a great forum, an opportunity to network too and through this experience I’ve had a chance to work with four very talented women here so. Vicki, please tell us more about your current role and a challenging change.

VICKI BERNHOLZ: Thank you Sherry, thank you for having me. So my name is Vicki Bernholz and I am the Chief HR Officer for Keller Meyer Virgins and Services, which is a mouth full. And the first thing I would say that's sort of been a challenge in my current role is that I’m an HR person doing risk management which is fairly unusual. And when I was handed the situation, we're a very acquisitive company, we acquire a lot of companies every year and each one of those companies comes with their broker relationships, comes with their insurance programs and what they believe is right for their employees, they come with different renewal periods, different ways of thinking about insurance and risk. And the challenge for me when I was asked if I would take on the risk management pieces to bring all that together so that we were one company with one set of brokers, there was lots of opportunity to save money and to move forward. You can't really influence claims and bring costs down without having the right data and it was everywhere. So it was a challenge to get everybody to give up a little bit to come together and be one team. The brokers, we had 30 policies that we've whittled down to 11 or 12 now, we saved about five or six million dollars a year. And all we really did was organize and consolidate. The challenge wasn't that part, it was getting the people to sign up for that difference and to make sure that that everybody involved and some people left, we only have one broker, but to make sure that everybody felt a part of a team and a vision moving forward so that we could collectively make sure that we were doing what was right for the company. And it's taken two and a half years to get from where we were to where we are now but it's been highly successful now but it really was about creating a vision, making sure that all the right players were there. We actually were able to influence our captive to bring in a new TPA, which was very unheard of at the time. And so it's been successful but it was really rallying everybody around one vision and making them part of the team and making sure that everybody collaborated well together.

SHERRY HERSEY: Thank you. So a lot of times when you're trying to change and improve and innovate, there are many stakeholders that we have to influence in our organizations and it's hard to align the stakeholders and convince them to change. Jennifer, you've had experience I think, international experience too, working with Germany and other countries with people that are reluctant to change. So how do you encourage innovation in that situation? How do you help people think in new boxes?

JENNIFER RENO: I think it's important to get back to the source of the obstacle to really break the issue down in order to see what's really preventing folks from getting on board to complete the task. It’s important to sort of sometimes moved past the “we tried it before and it didn't work” kind of response to things. It’s also important I think to identify what's important to the stakeholder because what we see as sort of the ultimate output may not be the shared goal of the stakeholder so I think it's important to kind of see and help them understand where did they fit into this equation to really encourage that cooperation and collaboration.

You know for me it's been things, we have a direct relationship with FM so we don't have any we don't have a broker really intervening on our behalf nor do we have broker who's providing any extra services but we're also a media company and a retail company-commerce, so we don't have a strong engineering resource within our company. So we really had to look to a number of different organizations internally to say, you know who really could help us move the ball forward with the risk engineering process and really our real estate team has been really key to that and they've gone through an evolution over the last five years as well to really become a stronger engineering-based organization. So I think to me that was a great example of collaboration.

I think it’s always important to understand your stakeholders, their organization, their challenges. You know, are you communicating with them in a language that they understand? You know, we use a lot of acronyms in our business and insurance and risk management and finance folks may not understand really the value of what we’re talking about, but we need to kind of get to the same level. I think it's always important to make your stakeholders part of the solution. How can we do this together? It's important to understand their priorities, their goals. You know, we need to understand that we sort of live by their budget, we're spending their money, we're not the ones bringing in the money. So I think in order to really achieve that level of collaboration, you need to come together and have a shared goal.

SHERRY HERSEY: Thank you. Roxsann, what are some techniques you use to overcome stakeholders that are reluctant to change?

ROXSANN WILSON: Sure similar to Jennifer, I think being an active listener is kind of a key component. Really making sure you're understanding your stakeholders. People love to talk and if you just setback and listen, they’ll kind of tell you how and why they didn’t think it worked in the past or what went wrong or what the challenges were. And so I think basically making sure you’re hearing them and making sure you're understanding what’s important to your stakeholders will help you develop more of that common vision that Vicki mentioned earlier. It's important that when you are doing that, you can build early wins. So we went through a process to increase resiliency at our organization and resiliency is one of those things like apple pie, everyone says everyone wants to be resilient but we have these 10 other priorities that are pressing right now and so it is important that you hearing them and that you're helping them build that business case for why they should invest in resiliency. And what better time than right now, coming out of a pandemic to really let no crisis go and you know, go to waste in terms of leveraging that. But what we did was we listened to our engineers and we listened to folks and we said, okay well that didn't work in the past when you've presented it. Why? And a lot of times it's because engineers don't speak finance, right, so when they went to build their business case, they weren't putting it in terms that they could understand. So we helped them build that business case and developed an early win and get investment in an area that they’ve known was a challenge for many years. And that really helped us build momentum and they talked to their peers, right. And so when we went to the next location, we got less resistance because they heard we got something resourced that they had a challenge on in the past so it really does help if you can get some of those early ones and get that snowball effect going.

The other thing is to make sure you’re looking across into the past and across other verticals on how challenges have been overcome. I know when we were facing some capacity constraints, we go well this isn’t the first hard market, right, that we've all seen. What are some creative solutions that were used in the 80s? Can we use surety in a different way? So really getting outside of that, you know, kind of historic and using history to help innovate today.

SHERRY HERSEY: That’s great. So you mentioned diversity of function. Usually when we think of diversity, we think of cultural diversity but the diverse thinking of different functional areas coming together can help encourage innovation and creative solutions to problems. And like Jennifer said earlier, learning the language of all those different functions. Roxsann, you said that too about speaking finances, that's also very important. Vicki, what suggestions do you have when there are stakeholders that are reluctant to change?

VICKI BERNHOLZ: Well you know first of all, I have to be patient with them but because sometimes it’s frustrating, right. But they don't get it, they don't want to change. But I will tell you I think that innovation isn't an event, it’s more of a constant state of mind and if there's a culture that's been created that it's okay to question things, it’s okay to ask why do we do it this way? It's we have a culture of just always asking, always questioning, and always saying what can we do to improve? That innovation isn’t an event, and it isn't as hard that way for people and we find people are less reluctant and less difficult because we’re always changing and you sort of get used to it.

So we've done a lot of work to make sure that people understand that innovation, change, these are good things and they’re not to be resisted. They're to be embraced because that's what moves our business forward. And in our businesses, you know, we are a janitorial service that is out there cleaning up in the pandemic and we had to think fast, innovate fast and they had come came up with some very innovative things in a time when it was tough to do. And so I think creating this culture of change is good, innovation is good, and having everybody do it all the time is helpful and sort of prevents the reluctance, if you will.

SHERRY HERSEY: So changing the culture and it's a continual continuous process like you said. And so Jana, what do you do day-to-day to continually innovative?

JANA UTTER: Thank you Sherry. So I learned also early on that ERM, focus more on enterprise risk management than say the traditional insurance risk management but ERM is ever changing. And I think a casing point although it may have been a little long overdue is that the original COSO ERM framework came out in 2004 and then it was updated in 2017. And so while that was a pretty big spread there between the original and the second, it did indicate that ERM changes. So we need looking and at how the trends are evolving for enterprise risk management.

I think one way to do that is to not be satisfied with the status quo. If you do have a process that's working, that's great. But always be looking for ways that you might be able to add some additional value and try it out, pilot it for a quarter. If you do quarterly reporting, add that new idea that you're thinking would be helpful for senior management. I would try to socialize those ideas first and get some buy in before sharing it, but it's continuously looking for ideas to innovate.

And I think ways to accomplish that are staying current with the trends for enterprise risk management or insurance risk management or whatever your discipline is. And ways to do that are through RIMS. I look at RIMS emails almost on a daily basis. I think also there are sector specific resources as well so pick out the ones that are most relevant for your sector. We're in the insurance sector so the National Association of Insurance Commissioners has a daily headlines email. And that’s actually very interesting to look at because we are a health insurer but oftentimes the issues that are popping up in property casualty and life will tend to migrate over to health insurance. And so you can get kind of a preview for thinking about, oh is this a new risk that I may need to be thinking about in the health insurance sector, because it's popping up in property and kind of to your life.

The other tool that I use is keeping a three-year roadmap of plans in place for the current year, what I want to do for the next year to try to introduce some innovative ideas, and then thinking about it two years out as well. And so that roadmap can really help you keep on a path to innovation that may not always be able to be accomplished say overnight or in one year.

SHERRY HERSEY: So, you mentioned several innovation concepts there. You mentioned being in the health insurance industry, this idea of adjacent innovation so looking to the PNC industry for ideas. You also mentioned this three-year road map. Sounds very much like the minimum viable product idea that you saw the graphic earlier, where you’re thinking about the stages and that each stage is a test and it’s a functional test. So those are concepts that are helpful in innovations.

So we might have folks in our audience that maybe be thinking I don't have the creativity to innovate or I can't innovate in my current role, my manager my department doesn't encourage it. It has a very “no can't do” and not a “yes if” kind of added culture. So there might be resources within your company to find like-minded people. For instance, we have an innovation office with teams that help encourage startup projects. We have also something called an annual innovation jam, which is an opportunity for anyone with an idea to gather a team together from different functional areas. We mentioned cross-functional stakeholders before, so you can get technology, operations, sales marketing together. I actually worked on a project that would have been is very relevant in this COVID times. It was using virtual reality to help with ergonomic assessments. So in our work at home environment that would have been helpful to use your virtual reality goggles to make sure you’re positioned properly. So in your companies, seek out these organizations or structures that might help encourage innovation. I think Jana or Roxsann, do you have examples to share in your organizations? Maybe Jana.

JANA UTTER: Sure I can jump in Sherry. Yes sure we have something I think maybe a little similar to what you have. We do have company crowd sourcing platform that generates innovative ideas and that was started probably about three or four years ago and has proven to be pretty successful. So I would say you know I may be one of the lucky ones that works for a company that really encourages innovation. But I’ve also been on kind of the other side of the fence too, where we’ve worked for companies that really didn’t encourage innovations. So I found that the way to really foster innovative ideas in that situation was to join professional organizations, RIMS for example, and you can participate in their opus platform. There is a blog tool on RIMS that allows you to basically share your innovative ideas with others in the RIMS membership and bounce those ideas off of them. And then to kind of gain traction within your own company, take it in baby steps. And I think that’s what’s worked in some previous positions that I had that maybe didn't have those company-wide innovative platforms. Usually you can always find somebody else that’s like-minded like yourself; that's really wanting to introduce some change and you know, kind of pilot it with them and then see where it goes.

ROXSANN WILSON: Yeah, building on what Jana said, our company does have an innovation team and one of the ways that we get some of our best ideas is actually by listening to our customers and doing customer surveys and our voice of a customer. So as the pandemic hit, obviously our industry was greatly impacted. Being an auto glass repair, people weren't driving at the beginning of the pandemic if everyone remembers. My car sat pretty idle for a while other than trips to the grocery store and you know we had to be pretty agile and listen to our insurance clients and to our customers and say, how can we create new products or new ways of doing business that will help people feel safe? And so you know, we came up with using more online platforms, people didn’t have to talk to someone to make their appointment. They could actually come drop it off and never have to actually talk or touch anything. We came up with the drop and go and so it is great working for a company that has that innovative mindset. And if you don't, building on Janna’s comment earlier, networking within the industry is a great idea. I’ve been fortunate to be parts of things like DIG which is the Drug Insurance Group and we recently formed a central Ohio ERM roundtable, where we're hearing from across different industries what things are going to be innovative in our industry and it's really helped elevate I think all of our businesses.

SHERRY HERSEY: Another resource might be if there aren’t formal innovation centers or mechanisms in your companies, another resource might be diversity networks or employee resource groups that though they could be a forum for finding like-minded people, but for learning different perspectives as well. So that's another place to look. So inclosing, what is the one nugget of career wisdom that you would like to give our audience today as they develop in their careers? Let’s start with Vicki.

VICKI BERNHOLZ: Well thank you, Sherry. So my one gold nugget of wisdom is you have to learn the business; you can’t just be a functional expert. And I think that's fundamental, that you have to understand what drives incoming business. I would encourage everybody to learn how to weep the basic financial statements, balance sheet income statement, statement of cashflows. They're not that hard but they educate you about the business and they start to make you conversational in the terms of your business and be able to speak no matter what the function is that you're in. You have to be able to relate it to that to the business. And so I’ve seen many people in my career who get stopped because they don’t understand the most basic things about their business. They only understand what’s in their function. And so that would be the one thing I would encourage people to do.

SHERRY HERSEY: Thank you. Yes, it's very important. Roxsann, what advice would you give?

ROXSANN WILSON: Yeah, kind of building on what Vicki said, I’d say you know be intellectually curious and take risks early in your career. I can tell you it only gets harder, you know. Take that stretch assignment or that international assignment early in your career. Make sure you're going for opportunities even if you only took, you know, two of the six requirements. Make the most of it and do your best because it only gets harder the older you get and the more established you get in your career.

SHERRY HERSEY: Yes, that's a very good point. I had the opportunity to, about 10 years into my career, had the opportunity to work overseas in Asia. And so my husband had to quit his job and had to move my kids out of school and we did that for three years and it was an amazing opportunity. But when those opportunities present themselves you need to take advantage of that. Jana what advice would you share?

JANA UTTER: I’m going to go with grow your network and always foster relationships and keep in mind that relationships that you make early in your career will likely have some benefit to you much later in your career as well. Foster versus hinder relationships. I’ve worked in really three distinct sectors between energy, financial services, technology as well as health insurance. And you would actually be surprised at the number of people that I still connect with today and run into in a professional situation that are from the energy sector that also have crossed over into the insurance sectors. So really foster those relationships, don’t burn bridges, and lean on resources or people that you've met earlier in your career. I have actually gone back to people that I worked for even 20 years ago and asked them to give me a reference for a current position, if it was someone I really worked closely with at that time. That's why it's important to keep those relationships active in some form or fashion.

SHERRY HERSEY: And Jennifer, what advice would you give especially for women that might be struggling or challenged in their career?

JENNIFER RENO: Yeah, I think to echo the points that have already been made as well, I think it's important to look for allies, you know, whether it be internal to your company or external. But you know whether that be a man or a woman, you know, just folks that you can use as a sound board to kind of investigate sort of your next steps or a challenge you may be having in your current role. I think it's always important to lookback on the leaders that we've all worked for in the past or had some alignment with and you know, decide what kind of leader you want to be like. What type of behavior do you want to model? I mean it's very similar like in the upbringing of children, you want them to behave a certain way and conduct themselves a certain way but I think we all find that there are folks in business that sometimes forget who they are, right. And making sure that you know you act with integrity and honesty and that you move forward with discipline, but don't be afraid to stumble and fall. I think that’s where we all learn as well. And you know, to be afraid to make a mistake is the person who's going to be stunted and never go forward. So it's important to be curious and always up for the challenge and just continue as everyone said. Continue to grow the network and nurture the network. It’s hugely important and RIMS I know is a huge part of my network and has really borne fruit for me and I think always remember to pay it forward as well.

SHERRY HERSEY: Yes, and we have an example here of very talented women that are participants in RIMS so please reach out to your network of women in RIMS. And now we'll take your questions and we’ll have a question and answer period. Thank you.