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What IT Security Execs Think About Risk Management

In response to the results gathered in its 2012 Strategic Security Survey, InformationWeek has some simple advice that can apply as much to your marriage or workplace debates as it can IT risk management: pick your battles.

When it comes to security and risk management, don’t try to address every possible threat. Instead, pick your battles: Implement better access control, vet cloud providers, safeguard mobile devices, educate users and build more secure software, for starters.

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They surveyed nearly 1,000 IT security pros and many of the findings are fascinating.

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The following four graphs are just a small sampling.

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You can download the full, 44-page report at their website (link above).

Most interesting to me is the top two bars in the second chart: security executives now, finally, consider internal users as just a large threat as they do cybercriminals.

 

Turtles Killed by the BP Oil Spill

We have covered the BP oil spill extensively over the past two years.

For companies it was one of the most dramatic lessons in the dangers of excessive risk taking and showed just how much damage can be done — to a reputation, the environment and the families of those who died in the explosion — when a company displays a “pattern of neglect and corner cutting.” We’ve looked at the risk management lessons of the spill, the events leading up to the Deepwater Horizon explosion, how the rig’s blowout preventer failed, and how conflicts of interest hinder offshore drilling regulation.

Now — after a Greenpeace Freedom of Information Act request has finally uncovered some previously unreleased images — we look at the heart-breaking ecological damage of the spill.

Here is what is presumably a government worker cleaning up some of the dead animals that were killed by the oil that filled the Gulf of Mexico. Mother Jones has a gallery of many more explicit photos showing just how badly some endangered sea turtles were covered in crude.

Discussing Trends at the Advisen Casualty Conference

At Tuesday’s Advisen Casualty Conference here in New York, a hot topic was that of trends within the industry. It was clear that Stan Galanski, president and CEO of Navigators, had put some thought into the topic, coming up with the following trends he feels are important to the industry:

  • Globalization — “There is a need for global product liability coverage,” said Galanski. We need to look no further than the UK Bribery Act and the Foreign Corrupt Practices Act (the recent news involving Walmart is a good example).
  • Miniaturization — “We’ve gone from records to 8-tracks to CDs to iPods to the cloud,” said Galanski, talking about how the density of electronic components can be construed as a risk. He referenced the case of Intuitive Surgery, Inc., the maker of the da Vinci surgical robot, which has allegedly caused numerous injuries and at least one death — that of a 24-year-old woman who was undergoing a hysterectomy when the robot caused burns to an artery and her intestines, which led to her death two weeks later.
  • Disintermediaton — By this, Galanski means the removal of intermediaries in a supply chain. “So what exposures are risk managers picking up with the absence of these people and/or businesses?” Though disintermediation may be more cost effective, it comes with added risk.
  • Personalization — When you open iTunes, the application suggests songs you may like based on your recent purchases or downloads. The same goes for Amazon. When you log into the site, it suggests new books or apparel you may want to purchase based on past buying habits. “It’s a great feeling as a consumer, but as a risk manager it brings concerns about your business’ laptops and computers.
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These are indeed interesting observations of trends, but they are, in fact, only one man’s opinion. But we learn by sharing. With that in mind, I ask you what trends you’re noticing within the casualty industry?

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Work Teams: What’s the Risk?


The following is a guest post written by Therése Palmiotto, senior underwriter for Travelers Select Accounts.

Many companies today are turning towards the integration of work-teams into the traditional office environment. Managers are hopeful that this new work structure will help the organization improve in areas of efficiency, production and effectiveness.

The alignment of employees into individual work teams is a relatively new concept in the United States.  Although it is growing in popularity within many different organizations, there is still not enough historical information gathered in order to establish a coherent set of rules, values or formulas. Companies adopt the concept and it is uniquely applied to each work situation since we are essentially still in the learning process when it comes to developing strong work teams within an organization.

Teamwork can be exciting and can lead to some of the most rewarding experiences of an individual’s working career. It can also be frustrating, difficult, and challenging, however.

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Any change to the way that a company operates internally can also be a potential risk to it’s reputation in the marketplace. Aligning your staff into a more team-focused environment may mean better collaboration and communication behind the scenes, but the shift in roles could also expose your employees to negative perception. Competitors’ ears seem to perk up just enough to catch wind of organizational changes and opportunities to poke holes in a company’s reputation. Most difficulties can actually be predicted and with the use of proper tools, can be tackled and overcome. Recently, Billy Beane, the general manager of Major League Baseball’s Oakland Athletics and the subject of the best-selling book and Academy Award-nominated film Moneyball discussed  how risk and data play a part in running a baseball team. In his discussions, Beane speaks about how using risk management techniques had helped him develop and lead a successful baseball team. If risk management skills can benefit a professional sports team, then we can apply the strategies of successful sports teams to help risk management and insurance professionals in developing successful work team environments within their own organizations.

The design of work teams is based on the theory of synergy. The productivity of the whole is greater than the sum of its parts.

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This is a concept that sounds like something I remember hearing many times, beginning with the first practice at t-ball at age five. Teams that are well-functioning offer mutual support of its members, which helps increase morale and generally brings out the best in its members. These are positive by-products that any manager would want to see among baseball players or office employees. Both on the field and behind a desk, the creation and maintenance of successful teams comes down to effective management, strong leadership and clear communication.

MANAGEMENT starts from the top down. Key decisions on the baseball field start well in advance of opening day. The entire baseball season starts at the top with the owners — in the business world, we call them high-level executives. Deciding to incorporate work teams is a major organizational change. It needs to be well-supported at the top and clearly communicated down the lines. When the foundations and concepts are established at the senior management level, employees are more apt to buy into the change. In the story of Moneyball, the coach desperately wanted to build ateam with big names and high salaries, but that was not the message that Billy Beane had in mind. Using a theory based on data analytics and risk management, Beane could not see paying for skill sets that didn’t correlate with winning. It was his unique strategy and in order for it to work, it had to be established at the top and carried out and supported by the lower level managers and coaches.

ACCOUNTABILITY is crucial. Baseball players know exactly what is expected of them. They know what their responsibilities are and they know how they fit into the big picture. A pitcher knows that a bad pitch will impact the catcher’s performance. The same rules apply when talking about work teams in an office environment. Establishing accountability will also hold very strong to the success of the ultimate change. Specific objectives are important not only to identify the achievement goal, but also to pinpoint who will be responsible for these changes. The human resource department will most likely have to develop new approaches towards incentive pay and bonuses, and depending on the strategic nature of the objectives, new performance metrics may also be necessary.

COMMUNICATION that is clear and consistent is the absolute key to success. Managers need to communicate with employees who are affected by an organizational change, not at them. For any change efforts to be effective, there must be a level of buy in from those who are affected by it. Early involvement and communication are two ways this can be accomplished. It is important to recognize the value of involving employees when planning change through various methods, including task force committees, focus groups, surveys hotlines or conversations, both formal and informal. Ball clubs also communicate by collecting feedback from those on the field. After each game, players go into the locker room, where the managers, coaches and players all talk about what went well and what didn’t. The team’s performance is analyzed and teammates offer recommendations on how to do better next time. Much like players spend hours watching game tapes, organizations should be stepping back to review and evaluate the organization’s performance amidst such a change.

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 Seeking feedback from their employees is another way to analyze the situation. Asking people how they feel and what they think makes people feel more involved. When employees feel involved, they’re more accepting of change and feel more support for the change initiative.

Managers of baseball teams have relatively easy ways of measuring success. If the team makes it to the playoffs, it’s a pretty clear sign that the team is working well together. When ticket sales are low, and the team finishes the season with a losing record, owners understand immediately that the team is seriously lacking. In business, we don’t have the luxury of such cut and dry performance feedback, but we can rely on reputation as a litmus test for success. Don’t forget that internal changes don’t just impact the employees. Using strategies from the field to develop strong workteams will help to successfully manage your organization.