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Groundhog Day: A Lesson in Risk Management

Jan 30, 2015

Groundhog Day: A Lesson in Risk Management

No, we're not suggesting that Punxsutawney Phil has swapped his expertise in meteorology for a new career in loss prevention. As far as we know, Phil remains happily devoted to his annual February 2 prediction ritual, where, even after 121 years, his view (or not) of his shadow amazingly continues to predict the remaining days of winter.

WP Dolle instead wishes to refer you to the risk management lesson brilliantly illustrated by another Phil — Phil Connors, Bill Murray's character in the classic movie, "Groundhog Day." Specifically, it takes both repetition and continuous pursuit of improvement to get risk management right.

And we do mean "both." If you'll recall, when Phil realizes his February 2 is repeating, he doesn't immediately see it as an opportunity to improve his life. Instead he rushes into a myriad of little-thought-out, meaningless activities that, instead of bringing him closer to his ultimate goal, drive him progressively more despondent over his repetitive failures. Finally he begins to understand that if he can make even a modest improvement with every repeated day, then over an estimated 10 years of such days, the positive changes in his life will became dramatic. He grows from his beginning as a self-centered, cynical weatherman into a true humanitarian, skilled ice sculptor, and talented pianist who also has become fluent in French.

Now consider how his change of focus from hedonism to personal improvement parallels the potential created by step five of the classic risk management process as defined by the American Institute for Charter Property Casualty Underwriters:

  1. Identify and analyze loss exposures.
  2. Examine risk management alternatives.
  3. Select among alternatives.
  4. Implement chosen alternatives and techniques.
  5. Monitor and improve the risk management program.

Many individuals and firms actively pursue the first four steps, but neglect step five. Note that only embracing fully the repetition inherent in step five will assure continued success. Without constant monitoring with a focus on potential improvement, even a state-of-the-art risk management solution may ultimately fade in effectiveness and applicability. Insurance coverages change, tools and techniques evolve, once-major issues become minor, and once-minor threats become critical. Effective risk management is never "once and done."

So take a tip from "Groundhog Day"! Repetition is only bad if you learn nothing or only aspire to the easy out. With a focus upon continuous updating and improvement, you may soon join Phil in achieving success beyond your wildest dreams!

Although we hope it won't take you 10 years!

Risk Management? Just a Good Start

While a comprehensive risk management plan is essential for any business, experts caution it is only one part of an even more important process: planning for how your business will endure and continue in the face of risk and loss. Here are the key parts of an effective business continuity plan:

  • Objectives: what you hope to achieve and what is expected of everyone involved.
  • Risk management plan.
  • Business impact analysis: what activities in your business are key to survival, the resources needed to support them, and the impact of failing to continue them.
  • Incident response plan: how will you respond immediately during and after an incident or loss. This plan comprises an evacuation plan, a designated response team (who is on the team and each person's responsibilities), communications requirements, and contact lists.
  • Recovery plan: what must you do to get business running again after incident or loss, in the projected time frame necessary to minimize financial impact.

Contact us at WP Dolle today! Call 513-421-6515! We will be happy to assist you!

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W. P. Dolle, LLC
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