Newsletter Sign-up

Director of Risk Management
Darden Restaurants Inc.
Orlando, Fla.

The secret sauce for success: tying risk management into the corporate philosophy.

It says it all about a risk management program when the company CEO gets before a global audience on one of those cable financial shows and states, "We are focused on running the cleanest and safest restaurants in the business." Darden Restaurants CEO and Chairman Clarence Otis Jr. did just that. It's the ultimate recognition for the work of Darden Director of Risk Management Tom Cipollone.

What can drive a CEO to speak so highly about risk management, safety and loss control? Try 17 straight quarters with reductions in workers' comp claims, with an overall reduction of 38.2 percent since FY2002. Claims with dollars going down by 48.8 percent from FY2002 to FY2007. And the expense of claims overall dropping at an annual rate of 15.4 percent in the last four years.

Or when it comes to the other prime restaurant concern--customer safety--Cipollone's work has lowered general liability claims frequency by 25.9 percent from FY2002 to FY2007.

Add up all of these results for the fastest growing casual dining company in America, and you get a 46.2 percent drop in workers' comp and general liability costs from FY2004 to FY2007, or $60.7 million.

"We've made some pretty amazing strides against the industry and in a broader look at the competitive landscapes," said Bill White, senior vice president, treasurer and Cipollone's direct supervisor at Darden.

"What's really exciting about being a part of it is he's driven it into the highest levels of senior management," said Charles Gerber of Liberty Mutual, who heads the risk consulting team hired by Cipollone to deliver risk management services and safety throughout the Darden organization.

Gerber has the sense that, while watching Cipollone operate over the last four years, that that was his goal from the get-go--to get this top level buy-in about safety, to essentially get the execs to "walk their talk."

"Early on when this process really began, he laid out the information, it was pretty clear. The opportunity spoke for itself when you looked at the dollars and the pressures that were naturally occurring," said White.

"He was able to take that thread if you will and turn it into an opportunity for us to really lay out the different steps that we could take," he said.

It's a matter, White explained, of not only appealing to the feel-good side of company management, but proving to them that the bottom line would always benefit as well.

Gerber astutely observed that Cipollone was able to apply this strategy with "baby step" tactics, basing everything he did on facts and evidence, not making sweeping promises he couldn't readily hold, identifying root causes of loss, teaching operations to avoid them and showing management the financial incentives for doing so.

Cipollone, who has been with Darden for 13 years and is the company's first and only risk manager, explained how the company used to play "whack a mole" with risk management problems, but that proved impossible with 1,700 restaurants. The risk manager believes that the company needs a passion and a system, which doesn't happen all at once.

"You need to demonstrate credible results, start out by building on small successes," he said. "It's to the point now, whatever we bring to them (management), has credibility and they're willing to implement it or give it very serious consideration to build it into their business plans."

We're talking baby steps like an investment in box and bag cutting tools, new cutting gloves, slip resistant soles--all which seem small on their own, but multiplied by thousands of restaurants and employees can have huge impact.

The slip-resistant sole program alone delivered $13 million in results, reported Cipollone, with a 72 percent reduction in slips and falls into the second year and beyond. Now Cipollone is into working with building designers to engineer safety into how his restaurants are laid out and constructed.

It all sounds pretty basic, admitted Cipollone, but it's a matter of implementation and doing it right the first time. It's also about innovation down to the minutest details, ingraining risk awareness into every nook and cranny of an operation.

It's about passion, too, vision and dedication to that vision.

"I think it's something that's spreading through all the business units," said White, pointing to how the two new Darden brands, LongHorn Steakhouse and Capital Grille are enthusiastic about entering into Cipollone's program. "There's a lot more pull for the services that his team provides than push."

--By Matthew Brodsky

If risk managers should take one thing from Tom Cipollone's success at Darden Restaurants, it's his ability to earn his leaders' respect and fire up their imaginations. A lot of risk managers talk about getting their foot into the C-suite. Well, boys and girls, it's time to get your goals ingrained in those executive minds.

It's time to effect change in the C-suite. Like the time that the president of one of Darden's brands requested an extra pair of slip-resistant galoshes before he entered one of his restaurants ... because he forgot his own. And need we remind you of the story of Darden's CEO chanting the benefits of risk management to a global financial audience?

Cipollone said his key has been aligning risk management with his company's core values, or more importantly, vice versa.

"How we run those restaurants on a day-to-day basis directly impacts the lives of our employees and our guests," he said.

Consultant
DriveCam Inc.
San Diego

A small camera lets drivers see how they're doing, and results can be used in court to defend them.

In the process of turning a product into a service over the past two years, Bruce Moeller has created a growing nationwide business.

Moeller--former president and CEO of San Diego-based DriveCam Inc.--has refined a product for individual and fleet drivers that, when it corrects driving behavior, "always will result in a 90 percent reduction in workers' compensation, property and casualty costs."

The product is a mounted camera with an inward and outward facing lens that tracks two dozen driving behaviors, capturing 12-second time frames that get fed back to the company's video center for review.

"They let you or your company know whether you're a high-, medium- or low-risk driver," said Moeller.

The information-analysis center is known as DriveCam, launched two years ago (previously, the company just sold the product). Moeller retired as its president and CEO in June 2008 and now serves as a shareholder and consultant.

DriveCam is already the largest knowledge base in the world for providing insight into risky driving based on actual driving behavior with about 100,000 mounted cameras installed. There is a monthly fee of $60 for the camera and the review procedure.

After joining DriveCam in 2004, it was Moeller's decision to go from product to process.

"Considering the product, I said, 'This is a gold mine if we put in an inward-looking camera and then modify the behavior of the driver to avoid accidents in the first place," said Moeller, who has a background in behavioral management (he is the author of a book titled Oh, Behave written for anyone who has employees).

Moeller emphasized an additional value to the DriveCam service: Because it records any hazardous activity, video results can be used in court to defend a client who is involved in a legal dispute.

Doug Carlisle, managing director of Menlo Ventures in Menlo Park, Calif., noted that the cameras have built a body of information. In some cases, people actually rush onto a public bus involved in an accident in order to try to make an injury claim. DriveCam has been successful in helping companies defend themselves in lawsuits.

Carlisle cited a case in Texas in which a car driver back up into a truck and claimed the truck rear-ended him. With footage from DriveCam, the trucker's company was able to win a fraud case against the driver of the car.

Moeller recently published his second book, Driving Me Crazy. This book is a collection of Moeller's own observations, reflections, stories and commentaries about the driving culture in the United States.

Though Moeller has a low-key manner, all those who know him well are quick to note that he is "passionate" about lowering the 43,000 traffic fatalities that occur in the United States each year.

To date, DriveCam has reduced vehicle damages, workers' compensation and personal injury costs by more than 50 percent in more than 100,000 commercial, government and consumer vehicles.

"Bruce is really dedicated to the goal of reducing vehicle accidents and improving safety," said Carlisle. "He's very passionate about this cause," added Carlisle, who is an investor in the company.

"There are so many vehicle accidents in this country that are preventable with additional driver training, education and constant focus on remaining safe," noted Carlisle.

He added, "Bruce does a great job of articulating the right approach. He helps keep a constant vigil."

Carlisle stressed the pioneering nature of both the audio and video nature of the DriveCam product, underscoring that he was attracted to Moeller's emphasis on doing a social good but also his earnestness in helping businesses maintain a better bottom line.

Added Kathleen Glass, director of marketing at DriveCam: "Bruce has a very unique approach to people. He knows that the leader has to be a visionary, has to provide the spark. He is passionate in a very human way."

--By Steve Yahn

Under Bruce Moeller's leadership, DriveCam Inc. was a "safe driving" crusade, as well as a marketer of a product that trained individuals and corporate fleets on how to drive better. Moeller proactively reached out to a range of influencers across the country, from youth to highway safety organizations, challenging everyone to improve risky driving behavior.

Moeller's dedication to reducing road fatalities created an environment at DriveCam where every employee shared the conviction that their work can and does save lives. In addition to his work at DriveCam, Moeller recently published his second book, Driving Me Crazy, another medium to effect change. The book is a collection of Moeller's own observations, reflections, stories and commentary on the driving culture in America.