Magazine article Risk Management

"Quality and the Risk Management Process"

Magazine article Risk Management

"Quality and the Risk Management Process"

Article excerpt

Quality and the Risk Management Process is a new two-and-a-half-day participatory workshop developed by the RIMS Education Committee to help risk managers apply the principles of total quality management to improve their organizations' systems and processes. The roll-up-your-sleeves course combines brief lectures with hands-on exercises and case studies to teach risk managers how to select and apply a series of quality improvement tools to their departments and organizations.

As companies continue to reduce costs, and as customers demand increasingly better products and services, there is considerable pressure on organizations to perform more effectively than ever before. Because risk managers are continually attempting to reduce risk and loss, they are in an ideal position to use the concepts and tools of total quality management to identify and solve potential problems within their organizations.

"Risk management is becoming a more complex function," says Jay T. Deragon, one of the course's two instructors. "Risk managers have to deal with the results of defects in their organizations' systems, so they have to play a central role in improving the quality of everything the organization does." Mr. Deragon is chief quality officer for Willis Corroon and executive director of the Quality Insurance Congress. Lucien P. Laborde, the other instructor, is managing director of risk management services at Willis Corroon.

In the module on systemic thinking, participants learn how to study a process to determine where and how it can be improved. "Data alone are not knowledge," says Mr. Deragon. "Quality improvement techniques can be used to learn the variables that cause loss and to reduce that loss. By using these tools, the risk manager's role is transformed from someone who transfers risk into a coach who helps improve the organization's processes."

To understand better how systems work, participants learn to select and use improvement tools including process flow charts; cause and effect diagrams; Pareto charts; scatter diagrams and other tools during individual and team exercises customized to risk management applications. During one of several case study exercises, participants examine the accident reporting process for a trucking company and work together to suggest improvements. Groups study another example of a company that changed an expense report approval process requiring seven signatures before a reimbursement check could be issued. "Lots of organizations have unwieldy processes like this, and the only way to find them is to study how your organization does things," Mr. …

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