Archive for October 2017

Workplace Health and Safety a Vital Component of Mature Risk Management

Businesses of all types are being transformed by technology, and so are the many kinds of workplaces that support their operations. Changing business strategies and increased productivity lead to rapid changes in process, which often means that executives lack a full understanding of the impact on the health and safety of employees and third parties. Workplace health and safety risks are among the most critical to address, as they can result directly in loss of life and limb—not to mention chronic injury and illness, work stoppage, lawsuits, and damage to brand reputation.

Traditionally, workplace health and safety matters have been addressed by dedicated safety teams working apart from the business, and risk management teams relying on spreadsheets, checklists, and incident reports as tools of the trade. As the number and interdependence of risk factors increases, this is no longer a sustainable approach—the cost of managing each regulation, requirement, change, or incident out of siloed programs will continue to rise, while effectiveness erodes.

The growing influence of international standards for risk management (e.g., ISO 31000, ISO 9001 and ISO 45001), and emphasis on integrated risk management as a key factor in cultivating business resiliency have created prime opportunities for workplace safety professionals to raise awareness of their role in risk management and of the impacts of accidents. With the right processes and technology, safety professionals can help protect their organizations from a range of negative outcomes from employee absences to insurance premium increases to fines and lawsuits.

With this in mind, health and safety leaders, C-level executives, and boards should be incorporating workforce well-being into strategic planning, corporate responsibility programs, and risk maturity initiatives across the enterprise. Governance, risk management, and compliance (GRC) efforts are not abstract—they are interrelated, and each function can be made stronger when addressed holistically. Carrying out integrated GRC initiatives (including health and safety programs) involves orchestrating and centralizing numerous interdependent policies, processes, and reports.

Integrated risk management should raise continuous, data-driven improvement of health and safety measures to the same level as other operational risk measures (e.g., cyber security, outsourcing, fraud prevention). Supporting these efforts with a systematic and streamlined process and toolset for documentation, tracking, training, reporting, and analysis is fundamental to incorporating them throughout the enterprise.

Integrated risk management processes help organizations foster accountability and collaboration, form a clear and complete picture of risk, cover compliance obligations more efficiently, reduce safety and health incidents, and improve incident response. The longer problems remain unaddressed, the greater the liability and risk exposure. Ineffective responses to workplace health and safety issues can lead to repeat accidents, illnesses, absences, loss of productivity, higher fines, higher insurance premiums and increased scrutiny from regulators and business partners. The GRC processes that need to be optimized include: performing risk analysis and business impact analysis; maintaining and reviewing process and safety documentation; investigating and reporting on accidents, injuries, illnesses and near misses; analyzing injuries and issues by site to pinpoint and measure risk; automating generation of incident forms for outside agencies (e.g., OSHA and HSE); executing job hazard analyses; managing site inspections and remediation actions; and ensuring employees are aware of safety processes.

There are few excuses for the blind spots that lead to major workplace health and safety issues. If we integrate policies and controls with processes and systems across the enterprise, we can gather and analyze metrics on just about every aspect of operations, as well as incorporating employee input and best practice guidelines. GRC technology solutions that include a health and safety component can help automate and bring a new level of intelligence to the associated risk analysis.

Enterprise-wide data integration enables predictive analytics capabilities, making it possible to identify health and safety issues and communicate them to executive decision-makers before they turn into incidents and losses for the company. Data captured during risk or safety assessments, and investigations into near misses and incidents generates insights to be incorporated into safety protocols and job training. The same types of analyses can be applied to vendor and supply chain management to improve health and safety outcomes throughout the value chain.

Data-driven safety programs should also include mechanisms for gathering input and feedback from the workforce. Whistleblower capabilities, responsive communications, and reliable procedures for following up after an incident or near-miss cultivate a safety-first environment. The ability to reassure workers that their wellbeing is a management priority positively impacts everything from recruitment and retention to incident rates, productivity, and corporate reputation.

Organizations cannot reach a mature, effective level of risk management without incorporating health and safety into their operational risk programs. An informed and comprehensive view of risk leaves enterprises better prepared for planned growth as well as unexpected opportunities and challenges. To strengthen business resiliency and sustain competitive advantage, executives must prioritize the continuous monitoring of health and safety risk and compliance across all business units, partners, and vendors. Mature risk management not only saves lives, but also lowers insurance costs, increases productivity and protects the sizable investments companies make in acquiring, training, and retaining their workforce.

Keys to Embracing Disruptive Technology

Keys to Embracing Disruptive Technology

In taking stock of potentially disruptive technologies, CEOs should be ready—really ready. Reinhard Fischer, chief of strategy for Audi of America, urges CEOs to “stop denying reality, which is what taxi operators did with Uber. Now Uber has taken about one-third of the taxi traffic in big cities.” Disruption is happening faster than ever. “Before when you talked about technologies coming, you’d name one or two,” says EY global chief innovation officer Jeff Wong. “Now there are 10, and they’re all relevant and important. That’s what’s really changing for the CEO.”

Here are some key pointers for CEOs looking to embrace disruptive tech solutions:
Don’t panic. The world is rife with examples of businesses where technological revolution fell short of its warnings. Early participants in e-learning, for example, still haven’t made money, says Julian Birkinshaw, a professor at London Business School. “Sometimes we forget about industries that haven’t been turned completely, immediately upside down. You have to make an ultimate commitment to new technology, but it’s not like you necessarily have to do that immediately.”

 

1. Take a long and broad view. Wall Street may demand rapid returns but woe be unto the CEO who concedes wholesale. “You’ve got to try to optimize for 10 years from now, not even just one to two years ahead,” warns Guo Xiao, CEO of the consulting firm ThoughtWorks. CEOs must also broaden their transformation push to encompass relationships with suppliers, customers and other external constituencies. “The greatest success comes through building an ecosystem of alliances and not thinking that the impact of technology is all within the four walls of your company,” says Nichole Jordan, national managing partner of markets, clients and industry for Grant Thornton.

2. Disrupt yourself. Critically evaluate your existing business model much as a hacker would try to take down a cybersecurity network. “Find out what the weak points are that you don’t see so that a disruptor can’t take advantage of them—and so you can disrupt yourself,” says Fischer.

“YOU’VE GOT TO TRY TO OPTIMIZE FOR 10 YEARS FROM NOW, NOT EVEN JUST ONE TO TWO YEARS AHEAD.”

3. Seed early successes. Enable a “culture of testing and learning new technologies, not necessarily passing and failing them,” advises Roger Park of EY. Former Humana innovation chief Paul Kusserow, now CEO of Amedisys, recommends testing technologies with “people in the company who have a very specific problem that a technology could solve—more acute than anywhere else in the company—or who believe that a process needs to be changed and this could help it. Then you need to make sure these people get not only the benefit of the innovation but credit for taking the risk.”

4. Create emerging-tech scrums. EY’s Jeff Wong suggests charging a team with “actually getting dirty with tech and playing with it, trying to address and answer problems.” Audi of America created a “digital team where we pull all the bright young minds that are working on digital topics and merge them with people who do strategy for the long term,” Fischer says. “It’s a little lab where we play around with all kinds of ideas and ask ‘what if?’ questions.”

5. Expect resistance. “There are incredible forces working against innovation” in any organization, Kusserow says. “Technology has to be so good that someone has to be willing to take the risk of restructuring or disassembling an existing process to which their success or maybe their careers may be tied.”

6. Don’t get hung up on a specific technology. Resist the urge to make a big bet on the latest buzzword technology, says John Mullen of CapGemini. “Don’t prepare yourself to chase certain technologies, but [rather] to get better decision making in your organization, because the technologies that pass through your ecosystem are going to be different tomorrow than today.”

7. Focus on building capabilities. CEOs need to see their roles as “building an organizational culture that can rapidly figure out which technologies are advancing, what the paybacks are and what the future leverages of those technologies are in order to determine whether they’re part of the business strategy going forward,” Mullen says. Consider putting tech people on the board and add the CIO to the company’s core management team. “You need to infuse specific technology skill sets in management—people who understand digital as well as your industry,” says Jeanne Beliveau-Dunn, VP and general manager of Cisco Systems. “They need to be embedded in each business unit.”

8. Reckon with legacy IT. A company’s IT base typically must provide the computing horsepower and platforms for embracing machine learning and other data-intensive disruptors. Many CEOs get excited about a shiny new app, “but they shouldn’t lose sight of the fact that existing IT can be an enabler or an inhibitor of new digital services,” advises Paul Appleby, EVP of transformation for BMC Software. “They have to work on how to turn their existing infrastructure into a competitive differentiator. It may not be the exciting piece, but it’s what will allow you to be agile and scale and do so in a trusted environment.”

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

 Carriers are expected to gain a significant share of the estimated US$130 billion global in-flight broadband ancillary revenue by 2035

 

The mainland, which has the world’s largest smartphone and online retail markets, is predicted to corner a considerable share of the estimated US$130 billion of global in-flight broadband-enabled ancillary revenue forecast for airlines by 2035.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages”

“We can expect to see significant growth in China because passengers prefer to bring their personal electronic devices on board to access their choice of content and services, as they would enjoy on the ground,” Otto Gergye, the vice-president for Asia-Pacific at British satellite telecommunications company Inmarsat, told the South China Morning Post on Thursday.

“In-flight broadband is able to bring about tremendous customer service and revenue possibilities for airlines, brands and internet companies.”

His comments followed the release on Wednesday of a research study on the emerging in-flight market segment, Sky High Economics, by the London School of Economics and Political Science in association with Inmarsat.

Airlines in Asia-Pacific can expect to see the greatest opportunity from in-flight broadband-enabled ancillary services, with total revenue projected to reach US$10.3 billion on the back of passenger growth and wide availability of such services, according to the study.

Revenue would come from broadband access fees, advertising, so-called premium content and e-commerce sales  arrangements with companies such as JD.com and Alibaba Group Holding. New York-listed Alibaba owns the Post.

The study estimated airlines around the world currently receive, on average, an additional US$17 per passenger from traditional ancillary services, such as duty free buys and in-flight retail, food and drink sales. In-flight broadband-enabled ancillary revenues would add an extra US$4 by 2035, it said.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages,” said Alexander Grous, the author of the study.

A recent global survey of 9,000 airline passengers from 18 countries conducted by market research firm GfK and Inmarsat found 68 per cent of passengers in China ranked in-flight connectivity as more important than in-flight entertainment.

The survey also found the mainland airline likely to lead in providing in-flight Wi-fi services is Beijing-based national flag-carrier Air China, according to 46 per cent of respondents. It was followed by China Eastern Airlines, headquartered in Shanghai, and Guangzhou-based China Southern Airlines.

“The major airlines in China have already struck strategic partnerships with the country’s largest online retailers, such as JD.com and Alibaba Group, to serve their passengers,” Gergye said.

“These include making online flagship stores available across various flight routes and providing online payment support, such as through Alipay.”

Such demand is fuelled by how mainland consumers are more accustomed to using the internet than anywhere in the world, with 731 million users at the end of December last year, according to the China internet Network Information Centre. Of that number, 695 million people access the internet on their smartphones.

Online shopping has also remained buoyant on the mainland, despite a slowdown in the domestic economy. The country’s online retail market is predicted to grow to US$1.7 trillion by 2020, compared with US$750 billion last year, according to a report from Goldman Sachs.

“There’s no doubt that in-flight broadband will revolutionise the way we work, play and consume content whilst in the air,” said Paul Haswell, a partner at international law firm Pinsent Masons.

“There is potential for airlines to generate additional revenue, but these carriers should not just treat in-flight broadband as an extension of an in-flight shopping magazine. Instead, they should look at innovative ways to entice passengers to spend.”

At present, only 53 out of an estimated 5,000 airlines worldwide offer in-flight broadband connectivity, the study said.

China is forecast to record a total of 1.3 billion passengers flying to, from and within the country by 2035, according to a forecast made last year by trade group the International Air Transport Association.