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Director of Risk and Administration
Texas Roadhouse
Louisville, Ky.

Patrick Sterling, a relative newcomer to risk management, has the right combo of patience and persistence to make big changes now.

Patrick Sterling has been in the restaurant business for more than 22 years. He's managed restaurants, worked in HR and marketing, and recruited leaders, yet it wasn't until about four years ago that he tried his hand in risk management. In 2004, he joined Texas Roadhouse in an HR function and had risk dropped on him in addition.

He did not dither or doubt. He took off.

"Patrick is definitely the exception," said his broker John Logan, managing director at Marsh, referring to how quickly Sterling was able to pick up the profession.

If you ask Sterling, who is now the director of risk and administration, he will thank all of the "best in the business" risk professionals with whom he consulted, his compatriots at the National Restaurant Association from whom he learned. He'll point to his "advantages": his great team within Texas Roadhouse, its supportive leadership, and his partners such as his brokers and his TPA.

But it was Sterling who, a year after coming into the job, took a "hard look" at the company's risk management operations, changed his broker and came up with a three-year plan to become the "best in class in risk management."

He put together a program designed to reduce accidents versus claims development, and he's scored some significant results. Since 2005, his team reduced the workers' comp loss rate by 30 percent, resulting in a three-year savings of $1.1 million. With general liability, their loss rate based on revenue dropped 56 percent since 2005, resulting in a three-year savings of $4.4 million.

"It's really been a great story," said Scott Colosi, chief financial officer at Texas Roadhouse.

A risk manager must be great at the basics, surely, to be named a Risk Innovator, but they must also deliver beyond just the everyday slicing and dicing. One of his truly creative solutions came about for a risk that all restaurant organizations are too well aware of: food safety.

To mitigate the risk, he wanted a "gut check on food safety" across the operational side. He considered bringing in a third-party auditor.

"It came across as a little Big Brother," he explained.

Instead, he transformed a program already within the organization: product coaches who traveled from one store to another teaching food quality and preparation. About 20 of them were recruited and trained to attain Certified Professional Food Safety credentials.

He also rolled out a remote food safety audit tool that allows the coaches to capture their audits and provides company executives with dashboard reporting and trend analysis about their progress.

"You have to make sure the programs you have fit within your culture so they're not looked down upon, they're embraced," Sterling said.

Therein lies a key to explaining his success in such a short amount of time. He grasps the "entrepreneurial culture" among the 40,000 employees and store owners/operators. Just take all the improvements in safety he's had with general liability and workers' comp. Success there comes in part from a new claims allocation program, whereby the option to make the right choices remains with the owners-operators (with incentives of course).

CFO Colosi described it as a matter of knowing how to "seed" initiatives.

Or as Logan put it, "(Sterling) comes from the operations side of the business, so he knows what happens in restaurants and he knows how they'll react. So he always gets their buy-in."

Sterling also approaches risk management like a "student of the game" and is dogged and dependable, like the "Cal Ripken of risk management," said Logan, referring to the retired Orioles infielder who played a record 2,632 straight games.

Again, if you ask Sterling about his success, he's humble and thinking of others.

"Risk management to me is a noble cause. What greater thing can you do then be involved in programs that help protect your employees and guests from harm," he said.

--By Matthew Brodsky

Vice President of Risk Management and Insurance
Wyndham Worldwide
Parsippany, N.J.

Jim Iervolino is pushing the IT envelope with a reporting system worthy of an underwriter.

It started out simple enough. James Iervolino, vice president of risk management and insurance at Wyndham Worldwide, wanted to develop a Web-based site where he could get a handle on incident reporting.

From there, this system--officially, the online incident reporting and loss prevention system, or OIRLPS--has grown into a risk management phenomenon. It is now capable of handling workers' comp and general liability claims-reporting and all necessary OSHA filings. Soon, it will house property information for every one of Wyndham's facilities, including valued secondary characteristics, and will be able to capture live safety data.

The 700-plus internal users, from Wyndham association members, corporate board members, and resort owners and managers, will be able to generate reports about claims, about particular insurance coverages, about basically anything they could need.

"It's just overwhelming the information in there," said Mary Whitten, one of Iervolino's brokers at Stephens Insurance.

To get this scale and flexibility, you'd have to look at an insurer, or buy it from a broker.

"I haven't seen a client do it. Not this system," said Paul Augello, senior vice president and Iervolino's casualty broker at Aon. "(It's) almost like an insurance company system in a client's office."

"The system is like it incorporates his head and his mind for whoever is using it," added Augello.

A scary thought perhaps, but really, it makes sense for a risk manager to want to ensure that the claims and underwriting processes work as he wants them to. With claims, by ensuring that the process works in real-time, efficiently, with a three-point contact. With underwriting, as Whitten explained, the system delivers "everything underwriters need to see."

"One of the things that jazzes me about what we do and how we do it," Iervolino said, "is the ability to be an open book to the underwriting community."

For Iervolino, the system started out of necessity, trying to devise improvements to an incident reporting system. And from there, every other problem he faced also seemed to fit as well. Sure, he enjoys the fact that this system will not tie Wyndham to any broker down the road. But the process has also been about his tenacity.

"He takes a problem and breaks it down very mechanically and very specifically and tries to fit it into a solution," explained Augello.

Or as Whitten put it, "He just wants to be the best at everything. That's just the way he is."

Iervolino is also very appreciative of all the help he's had along the way, all the "great minds that brought me along," such as Bob Garrison at Siemens.

He thanked the talent around him, including "his lean mean team" of Michael Dougherty and Tara Schmiel. And there's his team of outside partners as well.

"He has a knack for getting the best out of the best," said David Pagoumian, CEO of wholesale broker Napco.

It can involve being honest with a broker or other partner when he's not happy about something but also giving that person the respect to admit his own mistake and fix the problem. It also means making everyone work as a team ... yes, even brokers from different firms. Iervolino has mastered the symposium, where he brings together all interested brokers and underwriters to, say, discuss Wyndham's property program. He even held his own party at RIMS this year, hosting partners at a type of event they normally invite him to.

"We work together as a team, on the property especially," said broker Whitten. "It was kind of odd, you're working with your competitors."

But when you are working with Iervolino, you're as loyal to him as he is to you. "We'd love to have 20 more of Jim," said Pagoumian.

--By Matthew Brodsky

Managing Counsel
McDonald's Corp.
Oak Brook, Ill.

Robert Johnson delivers "visionary" leadership for McDonald's workers' comp program.

Robert Johnson had been cruising along in the legal department at McDonald's Corp. For five and a half years, he handled customer claims and litigation and had "a really wonderful experience doing it," he said. But then he realized that the company was spending $50 million on workers' compensation without having any centralized leadership.

So Johnson took it upon himself to put a team together to tackle workers' comp, even though he had no experience in the field.

"He had to work his tail off and learn," said Christopher Curl, the assistant vice president at TPA Gallagher Bassett Services Inc. who works closely with Johnson.

It was a "step of faith" for the managing counsel to take on the task, said David Whitehurst, senior partner at Whitehurst & Cawley and outside counsel for the global fast-food giant, as Johnson was changing the way things had been done for half a century, spending money that had never been spent before, at an organization with 2,000 corporate stores (and as many as 40,000 stores in the overall system). Talk about pressure.

In doing so, Johnson has tackled one of McDonald's biggest issues: getting injured employees back to work. Disability days went from 35 per claim at the start of 2008 to 21 days and dropping. About 40 percent of medical claims have been eliminated. But besides numbers, his biggest success must be that he's earned the respect and trust of McDonald's senior management, operations and employees at counters around the country.

Johnson's acquaintances credit his commitment and his hard work (it's taken five people to replace him at his old job by the way). Curl called him a "visionary" who is constantly looking for new ways to do things.

He is also adept at bringing together the best. Within the corporation, he has broken down walls in the legal department, as well coordinated with human resources, risk management and every other area that workers' comp touches.

Sure, it's part of the McDonald's culture, the "three-legged stool" concept started by founder Ray Kroc. But Johnson is particular adept at making the theory a reality.

"I really see him as someone who works very hard and takes pride in creating that kind of coordination," said Whitehurst.

It's his grasp of McDonald's corporate culture that also explains his success with comp. In fast-food, there isn't much work considered "light duty." Injured workers can be considered "in the way."

So instead of pushing an injured work on a manager, Johnson realized he needed to provide the right incentives. So he devised a way to give managers credits directly on their profit-and-loss statements for taking an injured worker back, based on the medical cost of the claim.

"Instead of a push, we created a pull," he said.

A major Johnson innovation in the past year has been a push to communicate workers' comp to Hispanic employees, who make up as much as half of his workforce.

Johnson, with the help of Gallagher Bassett, is reproducing all information and training materials in Spanish that "conveys the right tenor and tone," said Johnson, reinforcing that the company is there to take care of them, that they are part of the "McFamily."

--By Matthew Brodsky

Vice President of Risk Management
Regal Entertainment Group
Knoxville, Tenn.

Lisa Byrnes has driven a risk management culture from the corner office down to the carpet you walk on at Regal Entertainment.

Lisa Byrnes is known by almost everyone who works at Regal Entertainment Group. As she tells it, she was employee No. 1 when the company was founded with one theater in Titusville, Fla., until the owner decided he wanted an employee number and bumped her to No. 2.

Since then, especially when she took on the risk management function full time in 1996, Byrnes, as vice president of risk management, has received top billing as the star of safety at the nation's largest movie theater company.

With 26,000 employees at 549 theaters across 39 states, that is no small feat from a workers' comp perspective. And with 245 million moviegoers getting their tickets torn in half every year, getting safety right from a general liability perspective is a near miracle.

Yet some of her most creative successes could also be seen as mundane. You see, the number of claims filed against movie theaters really took off in the last few years when stadium seating was installed in many existing and new facilities.

The new stadium seating created some unique exposures from a slip-and-fall standpoint, explained Ed Williamson, executive vice president at Regal's broker, Reynolds & Reynolds, which has specialized in this sector since 1976.

Byrnes drove the operational and facility side of the business to research long-term fixes: developing silver-colored handrails that stand out from the background wall color, installing new contrasting green and red LED lights along the steps, and designing a carpet that "pops out" in the light to make the steps more visible without interfering with what's showing on the big screen.

It all sounds simple, admitted Williamson, "kind of one of those things like, 'Well, duh.' "

Added together, these small improvements have reduced both claims frequency and severity. After the first year of installation, Byrnes said she sees a reduction of slips and falls of up to 60 percent. Overall costs drop 85 percent after that first year.

"There is no other theater that did anything like that," said Donna Larson, Byrnes' customer service manager at Liberty Mutual.

Yet Byrnes' story is not as simple as the plot of a Hollywood blockbuster, where the hero faces a problem and you just know she's going to win at the end.

"It's quite costly to make that technology available at every theater," said Byrnes.

To figure out which older facilities should be upgraded, she's been able to break out slips-and-falls by location and type of theater.

Byrnes also implemented a Web-based audit process that identifies risk reduction opportunities at the 55 to 65 theaters targeted each year for improvements.

As for companywide buy-in, the return on investment she's gotten from the new theater designs have done a lot of convincing.

But she's always done an A-list job of making safety a priority at the company.

"She was very instrumental in getting the upper management at the time to say, 'Oh yeah, we need to change our culture and make safety more a priority for the company,' " said Williamson.

Byrnes has kept at the safety culture as the company has grown from one theater to 549, largely through acquisitions. She was instrumental in creating Regal Entertainment Group University, weekly classes for theater managers where risk management and culture form a large part of the curriculum.

"You kind of wake them up to the safety aspects around them, things that they can do that make a difference," said Byrnes.

She also created a manual and videos for new employees, many of whom are young and working at their first paying job, and she has a knack for winning over newly acquired companies to the "Regal way," according to Williamson.

Perhaps her success is because she can be tough when she needs to be, yet is also one of the "most pleasant, professional people" you could work with, as Larson put it.

--By Matthew Brodsky

Managing Director
Marsh
Philadelphia

Robert Murphy is not just a broker. He's the leader in the professional sports and arena world.

One might ask: Haven't you given this guy enough awards already? Bob Murphy, managing director at Marsh's Philadelphia office, is a two-time Power Broker^TM winner. And with these brokers, you don't want to inflate their heads anymore than they already are, right?

Well, with Murphy at least, you get the sense that he values the recognition for the right reasons.

"No matter the award ... they're yearly awards. My opinion is, you have to re-earn them, so to speak," he said. "The way that you earn it is based on your achievements for your clients and their perception of your work for them."

His clients' perception is quite high indeed.

"Bob is way, way, way more than just a broker," said Paul Vogelgesang, vice president of risk management for H&S Ventures LLC, the company that operates the Honda Center and the Anaheim Ducks NHL franchise and a Murphy client. "He's a broker's broker."

What does that mean? That he shows others how the job should be done. But it also means, in effect, that he's a client's broker.

"It's so basic but most people really flunk this test. Bob listens, Bob understands, Bob puts the client first," said Vogelgesang. With Murphy, it's like "one risk manager talking to another."

This approach is what earns Murphy praise with clients around the sports world, but it also has led him to become a true innovator among them.

Murphy calls what he delivers "transactional and consultative excellence"--the ability to "take the guesswork out" of clients' cost drivers, to find gaps in programs, and how their total costs of risk compares with their peer group.

Whatever you call it, his skills at this alone blow most clients away. As a past client, Jeff Goering, chief financial officer of the NFL's Baltimore Ravens, confided, his franchise is in a "much improved position" thanks to Murphy's benchmarking, which resulting in the exploration of new carriers; the challenging of exclusions, premium amounts, terms and conditions; and improved claims-handling.

As Vogelgesang reported, his CEO wants to work with no one but Murphy. After all, it was sticking with Murphy for the gap-filling and benchmarking that led to a "legacy project" for client and broker, a first-of-its-kind captive for sports venues.

As with anything really good, Vogelgesang and Murphy couldn't get into too much detail about this captive, especially considering that it isn't entirely completed and won't be in effect until the start of the NHL season this fall. But what the two men can share is that no other team or venue has done anything similar before. There are very few captives in general in the sports industry, and venues traditionally don't look to captives for property-catastrophe cover, said Murphy.

"It's almost viewed as too creative," he said, adding that most people are used to paying whatever it takes to get the short-term protection they need.

Creativity is what Vogelgesang needed to find an alternative to the traditional earthquake insurance market or to self-insurance. The property and business-interruption hit posed by a quake to an NHL stadium, estimated Murphy, could approach $200 million.

"What really pushed us over, we just can't sit back and self-insure the risk. It could potentially be too catastrophic," said Vogelgesang. And rather than "write a big check to an insurance carrier every year and hope for the best," his company decided to "be in charge of our claims and destiny."

For all his success for Vogelgesang and other clients, Murphy feels a sense of thanks and duty. Thankful in that, in the 25 years that he's been a part of the sports world, he's met great and grateful clients who have helped him grow in his career. And dutiful in that he really values his role in the sports niche.

"I think people like myself have an obligation or responsibility to safeguard the value or the importance of industry expertise, or industry knowledge," said Murphy.

--By Matthew Brodsky