Joanna Makomaski

Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

Column: Risk Management

Naked Risks

By: | August 3, 2015 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

For the past three and a half years, I have proudly served the 2015 Pan American Games organizing committee as their VP of enterprise risk management. These continental Olympics for the Americas, which run from July 10 to Aug. 15 in Toronto, are the second largest games, worldwide, second only to the summer Olympics, with more than 10,000 visiting athletes and officials from 41 countries.

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With 1.5 million tickets sold, spectators view 68 disciplines of summer sports at 88 venues and facilities as well as enjoy spectacular opening ceremonies, torch relays, and live festival sites.

To say the least, an operation like this comes with a few risks. I won’t lie.
The idea of having the accountability to assess all risks felt overwhelming, but I took on this momentous task. Now as I reach the end of my time with the games, I am thrilled to say that we did it.

By identifying our risks, we were able to defend the allocation of resources on risk management activities, investments in risk controls, and right-sizing asset protection strategies.

I have never been prouder of my team for this accomplishment. This was enterprise risk management at its best.

The ERM program had a risk assessment process that forced a neutral centralized line-of-sight to risks and issues that all functional areas and external stakeholders relied on. By identifying our risks, we were able to defend the allocation of resources on risk management activities, investments in risk controls, and right-sizing asset protection strategies.

More than 200 distinct risks from across all functional areas and venues were documented along with associated risk treatment options. Risks included sport delays or cancellations due to weather, traffic or inaccessible venues; warm weather related issues; health, safety and environmental concerns; and animal control situations.

We cross-checked each risk against our insurance program. Our coverage procurement was aggressive, ensuring limited exclusions and low to non-existent deductibles. Nonetheless, I was still curious to know in the end, how many of our risks were covered by commercially available insurance products in our markets today?

The results were revealing. Approximately 25 percent of our risks had some form of insurance cover; meaning 75 percent of our risks had none. We called these exposed risks the “naked risks.”

Our job as an ERM team was to be sure they got covered with some other kind of risk control before games time. They included a variety of trained and tested health and safety, security and contingency plans.

These critical plans provided guidance in managing events that deviated from normal operations of the games.

At times, our risk control plans got a wee unusual but with good precedent. The 2010 Commonwealth Games used langur monkeys at several of their venues in New Delhi to keep other havoc-causing monkeys in check in public places.

No joke. We have dogs trained to keep geese off our athletic tracks. Just imagine a 100-meter dash with honking water fowl on the track.

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Nonetheless, I am frequently concerned by the false security many senior teams and boards may have around the power of their insurance coverages; not realizing that risk control must go well beyond insurance procurement.

It likely doesn’t help that often we reference the insurance group as risk management. I guess Warren Buffet said it best when comes to naked risks: “Only when the tide goes out do you discover who’s been swimming naked.”

Just be sure it’s not you.

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Column: Risk Management

Whose Risk Prevails?

By: | June 1, 2015 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

When I relay the upcoming story, I fear some of you may think less of me. I am curious however to discover what readers think. So please do write me with your thoughts.

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I was on an early morning flight. All the passengers were boarded and settling in for a long flight. The head flight attendant came on the intercom with the usual pre-flight announcements and routine housekeeping information.

At closing, he had one last announcement. He told us that one of the 180 passengers had a peanut allergy and asked that we dispose of any peanut products that we had.

He proceeded to come around to every seat with a garbage bag waiting for us to throw things out.

I was a bit stunned. I had grabbed a morning coffee and muffin just minutes prior.

Was I supposed to throw away my quick breakfast?

Did my Chapstick have peanut oil traces? My face powder? My hand cream? My snack-size bag of almonds?

With the resurgence of measles and other previously controlled or vanquished infectious diseases, should we mix vaccinated children with non-vaccinated children in classrooms? Whose risk prevails?

In the end, I handed nothing to the attendant. I confess I felt a bit off afterwards and it made me think.

Was I to dispose of things that I needed and use every day?

Moreover, was the risk faced by one enough to override and create inconvenience, discomfort or loss to 179? Was this risk management effort a bit too heavy- handed?

This situation somehow reminded me of grade school — when naughty Billy got caught chewing gum in class, the teacher took all of our gum away. Even as a child I never understood the logic.

But the question remains, in situations like that, whose risk should been managed? Whose risk prevails? Whose rights are more important?

Is there a rule of thumb that can guide us as to which risk should override the other?

When faced with such a quandary, I always feel it is best to re-group and go back to basic principles and intention of good risk management — ensuring goal delivery and protection.

So, in this case, if the airline set a goal to ensure all passengers experienced a safe and comfortable flight, I suspect the peanut-snatching approach gave discomfort to many and hence undermined that goal.

But if the airline set a goal to ensure “14B with the peanut allergy” had a peanut-free, safe and comfortable flight, the risk management measures were appropriate.

This situation made me further think of our new socio-medical dilemma that’s brewing.

With the resurgence of measles and other previously controlled or vanquished infectious diseases, should we mix vaccinated children with non-vaccinated children in classrooms? Whose risk prevails?

Whose rights are more important — the risk borne by the few unvaccinated children, or that of the whole class?

Parents who choose not to vaccinate argue that it is their right not to vaccinate. But their decision can make their child a potential source of infection, endangering their community and cause the potential return of vaccine-preventable diseases.

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Is it incumbent on parents of vaccinated children to accommodate non-vaccinators?

I recognize that a well-functioning society requires us to routinely recalibrate our competing interests and risks.

But I also feel that we can’t lose sight of the rudimentary risk management principles of goal protection and assurance.

What goal as a society are we trying to protect? The welfare of one or of the many?

Let’s hear it from the peanut gallery.

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Column: Risk Management

A Betrayal of Trust

By: | May 6, 2015 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

As part of my business management training, I took executive leadership courses. I lean on information from one course in particular every day. The course was entitled: Trust.

As a class, we debated the idea of trust and the importance of building trust with staff and within our organizations.

A question was posed: How does one build trust with another person specifically? Answers flew around the class: One needs to show integrity, be likeable, be good, to care, to listen, to acknowledge others. All the answers didn’t seem quite right.

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The instructor interjected: “Trust is built when one demonstrates painfully consistent behavior.”

You don’t have to like someone to trust them. Take Mr. Grumpy-Pants who sits next to you in the office, who is gloomy and unpleasant every day. He may drag you down, but you probably can count on him. As opposed to Ms. Two-Face, who is sweet one day while the next she is stabbing you in the back. Hard to feel steady and trust her next move.

Trust problems cannot be solved by applying more technology. Trust issues are solved by actively building trust — starting with trust between pilots and their airlines.

Think of people you have difficulty trusting. Likely, it is because of their unsteady, unexpected or inconsistent behavior. Their surprising volatility impedes your ability to trust them.

This idea of trust has been front-of-mind for me lately. I write this column six days following the incomprehensible loss of 150 people on Germanwings flight 4U9525.

I watched hours of news footage that attempted to reveal what may have transpired that tragic day. Initially, the hours of analyses resulted in suggestions of increased safety measures to remove the risk of such an event ever occurring again. New technical measures were recommended including pilotless planes, remote aviation ability and flight-deck video surveillance.

Then, panel experts debated “failures” in aviation processes and safety systems including the flight deck door — a door system that was purposely redesigned post-911 to protect at all costs the most important people on the plane, the pilots.

It was suggested that the flight deck door safety system failed because the co-pilot was able to take advantage of the known impenetrability of the door to help perpetrate his plan. This insinuation bothered me on many levels.

Safety systems have goals. The design of a safety system starts with the question: What are we trying to protect? The flight deck door was designed to protect the pilots from unwanted intruders so they can do what we trusted them to do. Safely fly the plane.

The door system on the Germanwings flight did not fail. It behaved as it was designed. A redesign of the flight deck door will not reduce the risk of another pilot murder-suicide. The aviation regulator’s new requirement that at least two crew members remain in the flight deck at all times may add a new barrier but gives no guarantee.

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The failure here was that of the co-pilot. He was in the position of utmost, blind trust for passengers. He deeply betrayed that privilege, a privilege bestowed on him by so many people. He failed; the safety systems did not.

Our interdependence with others forces our need for continued trust. Trust problems cannot be solved by applying more technology. Trust issues are solved by actively building trust — starting with trust between pilots and their airlines. If we are to revisit anything to improve risk and safety, let’s ensure there is trust — painfully consistent organizational behaviors that make flight crews truly feel safe to self-declare problems if need be. In that I trust.

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