Keven Moore on Insurance: Business owners must balance risk with ...

Back in 1980 returning from a hunting trip with some childhood friends, we eyed the historic Young?s High Bridge, a railroad bridge that towered over US 62 between Anderson County and Woodford County line. My buddy challenged the other two of us to join him in climbing up and walking out onto that bridge.

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Like most teenagers, being young, dumb and feeling bullet proof, we took the challenge. Once at the top I remember having second thoughts gazing 1659 feet across the river to the other side of the bridge with no railing or walkway on either side of the track. Just railroad ties with 2-foot gaps where I could see all the way through to the river 283 feet below. Nevertheless, we all did it and walked away with our very own ?Stand by Me? moment.

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In my line of work in the insurance profession, I am sometimes called a loss control consultant or a risk control engineer. I personally I prefer to be called a Riskologist, as it is my job to study a client?s risk exposures and loss experience ? and provide the cure to prevent or minimize reoccurrences.

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To understand the science of safety and risk management, you have to understand the human psychology. People with risk-taking behavior are responsible for many of the accidents and claims we see. Accidents and risk takers are synonymous, and employers today spend countless hours encouraging, educating and sometimes disciplining employees to stress that such behavior is detrimental to their safety and health.

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The bigger question to examine though is why do employees take such risks, even when they can see the danger.

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Everybody reading this is a risk-taker. We all take chances every single day of our lives. Many of you took a chance driving to work today and were rewarded with a positive outcome. If you were having a car accident on average two times a week on your way to work, I bet that you would eventually stop driving to work, would you not?

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The underlying cause for risk-taking behavior can be traced to the positive rewards being sought. Maybe it is for a promotion, or for financial gain.

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Early in my career I investigated a partial hand amputation accident. I learned that an employee working on a skeleton crew late at night at a machine shop in Indiana had removed guards and had jerry-rigged his workstation. I learned he was using a 2?4 board to depress both of the palm control buttons allowing him to free up an extra hand so he could retrieve a part sooner through the cycle. This made his production numbers look great.

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Many investigators would have stopped there, but I still didn?t have the reasons for his risk-taking, so I kept drilling down and learned that he worked in a piece mill position (getting paid by the number of pieces he produced). He was being rewarded
for his excessive production.

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He was willing to bypass the safeguards to make more money, and since there was insufficient oversight on third shift, he could operate at this unsafe pace.

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Many times if I have enough loss data I can drill down to determine where and why a loss is occurring. With a little detective work I can sometimes even see accidents following a certain supervisor. Once I uncover this loss trend, I will suggest that maybe it isn?t entirely that supervisor?s fault, and encourage management to see what may be motivating him/her to overlook safety. Maybe the bonus-structure emphasizes more production at the expense of a zero-accident culture. Maybe it?s an infrastructural change or the new organization structure that has negatively affected the safety performance.

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Far too often employers are willing to reward entrepreneurial spirit, which rewards risk-taking behavior. But risk-taking is inherently failure prone, otherwise it would be called sure-thing-taking.

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Without risk-taking, we?d all still believe the world was flat, and many of the modern wonders and comforts of the world today would not exist. There wouldn?t have been a Bill Gates, Steve Jobs, Henry Ford or even a McDonald?s restaurant.

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As I now look back to that ?Stand By Me? moment on that dark cold railroad bridge I now realized that both friends have been risk-takers their entire lives. Brad Redmon (former Lexington Legends minor league baseball team owner and former Blockbuster franchisee) and his brother Rick Redmon (former Halloween Express franchisee and current Jet?s Pizza franchisee) have been very successful, respected business owners.

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So the take-away here is that every business owner or manager today still needs to unleash the right balance of entrepreneurial spirit and risk-taking behavior within their employees, as it is these attributes that are necessary to grow a business. But they must instill that risk-taking behavior with an effective and safety and health program that promote a strong zero-accident culture.

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Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor?s degree from University of Kentucky, a master?s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.

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