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Manager, Insurance and Loss Control
ConAgra Foods Inc.
Omaha, Neb.

A Risk Manager's Counterintuitive Spark

Exposing one's vulnerabilities is never easy. For an industrial concern, it can be downright costly--in both capital and reputation.

But Scott Solberg of ConAgra Foods Inc. envisioned an opportunity in inviting local fire departments to inspect every corner of the company's plants--some vast and many containing volatile materials--that firefighters could be called upon to enter under dangerous conditions to save lives and contain property damage.

The opportunity was to forge stronger, mutually supportive partnerships with fire departments--relationships based on minimizing risk to both sides. Solberg, manager-insurance and loss control at the Omaha, Neb.-based packaged foods producer, knew that giving fire departments such access would lead to fire officials citing the company for any problems they might uncover.

The concept worked well in practice last year with the fire departments that ConAgra invited to critically review five of its plants and undergo specialized training for those facilities. In Memphis, at the request of local fire officials, ConAgra opened up its plant a second time so more fire department personnel could review the facility.

This year, the company plans to expand the program to five or six more plants.

Solberg and ConAgra "are always looking to push the envelope" in loss prevention, said Anthony Forester, a Chicago-based vice president and principal consultant with XL Global Asset Protection Service. The unit of XL Capital Ltd. is ConAgra's property loss prevention consultant.

The idea for ConAgra to provide local fire departments a much clearer profile of its plants and open them for in-depth evaluations blossomed after another company suffered a major fire loss, Forester said. ConAgra and XL Global Assets examined the incident, and the consultant concluded that the loss might have been mitigated or avoided if the company and its local fire department had worked together more closely before the incident, Forester said.

As soon as the idea was conceived, "Scott took off with it," Forester said.

A fire department inspection of an industrial facility certainly is not a novel concept. Largely, however, inspections are "cursory," failing to identify a facility's worst hazards and what would be firefighters' greatest challenges battling a blaze there, according to Forester.

For each ConAgra plant, the company invites local fire department officials to review case studies; meet safety, engineering and management staff to discuss major hazards at the facility; and perform tabletop exercises on how the department would respond.

The most significant portion of the meeting, however, is the unfettered access that fire officials are given to the facility, especially the areas that could pose the biggest problems in fighting a blaze. "It takes a lot of courage to bring the fire department in and show them your weak spots," Forester said.

One concern was that fire officials would write up the company for the minutest infractions. Instead, because of the collaborative spirit that was created, fire officials give ConAgra an opportunity to address any concerns without the threat of a write-up.

In Russellville, Ark., ConAgra has a frozen meals packaging plant covering three city blocks.

The local fire department has always been granted access to the facility, but ConAgra's training on the plant's layout and potential risks during a blaze was far more extensive, said Doug Lewis, the assistant fire chief and training officer.

For example, he said, the department came away with a much greater understanding of how to control the facility's sprinkler system.

The department also learned the locations inside the facility where firefighters can connect their hoses to a water source so they do not have to run their hoses from trucks, he said.

And, plans were made for a ConAgra official to provide assistance to the on-scene commander during a blaze.

Lewis said that ConAgra also recently purchased for the department its first thermal imaging camera, a $12,000 piece of equipment that allows firefighters to detect people they otherwise might easily fail to spot in smoke-filled buildings.

The experience benefited both the company and the department, Lewis said. "A lot of good things came from it."

--Dave Lenckus

Associate Treasurer
Kraft Foods
Northfield, Ill.

Crafting the Clout of Business Continuity

When Claudia Temple took the corporate risk management controls at far-flung Kraft Foods Inc. in 2007, she faced some far-reaching challenges.

The Fortune 100 multinational, the largest U.S. food and beverage company, had just been spun off by parent company Altria after the renamed Philip Morris Cos. had spent years acquiring heavyweight food makers such as General Foods and Nabisco Holdings, and merging them with Kraft.

Risk management throughout the organization, however, was decentralized and historically had little influence over Kraft's various business units. Temple, the new assistant treasurer of global risk management and insurance, had to make corporate risk management meaningful and influential throughout the organization.

Without that pull, risk management would face serious difficulties implementing its strategy for the entire Kraft organization, part of which was developing a clear business continuity plan that would expedite Kraft's recovery in the aftermath of a disaster.

"Through Claudia's leadership and innovative risk strategies, she has not only accomplished the goals of driving centralized, consistent planning and enterprise risk management throughout Kraft, she has also revealed the potential for what every risk management group could mean to the growth and success of its organization," said Ryan D. Pratt, senior manager-insurance claims services at Ernst & Young in Chicago.

Early on, Temple assumed a leadership role and elevated the corporate risk management function in the C-suite and the board level after Kraft management decided to implement an enterprise risk management program.

Rather than watch as another department of the company took charge of that effort--a common occurrence in other organizations--Temple took responsibility for driving the implementation of ERM throughout the organization by working with business unit leaders directly in assessing the risks those units face and developing a plan to address them.

As a result of the ERM process, one of the key risks that emerged was business continuity. An increased focus on business continuity helped propel property improvement plans.

Another benefit of identifying business continuity as a top risk was that management conducted an integrated review of the risk at a category level, rather than at a plant level. This type of review led to a better allocation of limited capital resources.

Meanwhile, to ensure that Kraft rebounded quickly after any catastrophic loss, Temple led a business continuity planning team in visits to the company's many business units and operations worldwide. Those road shows for business unit leadership, operational management, and engineering and manufacturing officials have "created consistency in Kraft's response" and have elevated risk management's influence in the company, according to Pratt.

Temple also has helped the organization understand what drives its insurance costs by allocating costs by line of coverage to each site. That cost allocation compelled plants to develop plans to reduce their insurance expenses.

She's also implemented a centralized property claims function designed to expedite the recovery process. Previously, business units were left to manage their own property claims.

Temple has aided Kraft in another way that stretches the traditional risk management function. She has played a critical role in Kraft's review of its treasury, helping the company determine the group's mission and identify the processes and resources it will need to achieve its goals.

"Claudia's innovation really lies in her redefinition of what a risk manager can mean to a global organization--stepping out of the normal parameters of buying insurance to have a measurable impact on the strength and growth of the company," Pratt said.

--Dave Lenckus