WorkPartners is turning the spotlight on an individual making an impact and exemplifying excellence in the field of workers’ compensation, and more specifically… Risk Management. We are excited to feature Michael W. Simmons, ARM-P, RIMS-CRMP, Vice President, Risk Management at WKS Restaurant Group. a licensed franchisee of El Pollo Loco, Wendy’s, Denny’s, Krispy Kreme Doughnuts, Blaze Pizza and Corner Bakery Café with 300+ restaurants in over 20 states. We hope everyone enjoys this week’s featured interview!
WP. Hello Michael. Thanks for agreeing to participate in the WorkPartners Spotlight. How about we start off by sharing a quick summary of your background.
MS. I have been a risk management professional for the last 34 years. I am currently the Vice President, Risk Management for WKS Restaurant Group based in Cypress, CA. In this role, I am responsible for overseeing the risk management, claims, safety, and security mission for a large restaurant, multi-concept franchisee with 300+ restaurants in over 20 states. Throughout my career, I have served in several risk management, safety, and claims leadership capacities in the public service, restaurant, retail, and insurance industries. My more notable past employers include the Riverside Community College District, the Automobile Club of Southern California, American Stores, Inc., Albertsons, Inc., Lowes Home Improvement Warehouse and El Pollo Loco, Inc.
I hold the Associate in Risk Management (ARM) and RIMS Certified Risk Management Professional (RIMS-CRMP) designations. I have a double Master’s degrees in Organizational Management and the Administration of Criminal Justice. I also am the past Chairman, President, and co-founder of the Foodservice Industry Risk Management Association (FIRMA) with over 1,500 members. I have spoken at many industry events including the California Workers’ Compensation and Risk Conference, California Schools Risk Management Joint Powers Authority, California Workers’ Compensation Forum, Risk Insurance Management Society, and the National Restaurant Association.
WP. That is a very impressive professional background. You have been involved in risk management for almost 35 years. What are three ways risk management has evolved?
MS. In my opinion, the evolution of risk management has most recently been characterized by (1) a much broader mission scope, (2) new expectations for the education and skill sets of risk managers, and (3) a need for a better understanding of technology and its uses in the operation.
For years, the risk profession was limited to a basic understanding of insurance, claims, and safety. Our jobs were relatively safe because many in the C-Suite chose to assign accountability for this specialized segment of the business to us because it seemed extraneous and a bit scary for the layperson. Managing risk can be highly technical at times and not many people have the patience to deep dive into insurance coverage, forms, actuarial analysis, etc. As long as we could translate loss ratios, stratification tables, and other risk-related material into easy to digest recommendations, we were usually in good shape. Those days are gone forever.
The risk manager of today is expected to know more and successfully accomplish more than ever before. C-suiters have begun to acknowledge that risk management can bring real value to the business because it provides another set of eyes for the decision-making process. Risk management thrives in an analytical environment. Introducing a risk analysis into the discussion about an operational issue reinforces better decision-making and gives upper management a heightened sense of confidence the decisions they make will be more successful. Risk managers have a seat at the table today but a long term invitation to the Board Room will depend upon the accuracy and consistency of our advice.
Increased visibility comes with a greater accountability to self-matriculate and perform at higher levels than ever before. The more we know about the world outside of risk management the better our advice will be. Education gives us an enhancement to what we already know about the risk management space. A degree or two won’t hurt us on the resume either. If we are perceived as having the initiative to pursue an education, we will enjoy a baked-in sense of credibility and consistency because we spent the time in the classroom necessary to achieve a goal.
As we learned through the pandemic, our understanding of technology may not be what we thought it was. One of our core strengths should be communication. The pandemic taught us (the hard way) that communication will be a challenge for some people. I heard several people say things like “I am old school” and “I don’t believe in Zoom or working from home.” That kind of thinking today will probably get your career tossed onto the scrap heap next to the dot matrix printer and the fax machine. Risk managers can inject our solutions, recommendations, and plans into so much more if we know how to utilize technology to expand our reach. While we will have to “train” others to use the technology the long term benefit to the organization will be obvious to reasonable, open-minded people.
WP. What is the most common misconception regarding risk management?
MS. Risk Management is not optional. When a company is in dire financial straits, and the end game is unclear, the C-Suite almost always makes the decision to slice up the Risk Management Department in a desperate effort to control cash flow. Unfortunately, in doing so, the company loses visionary problem-solvers that specialize in bringing clarity back into the organization. Risk managers and our teams are specifically trained to cut through the clutter in the moment to help decision-makers wade through the many options and select the best path for success with as little as risk as possible. By marginalizing the risk management function, C-Suiters are likely removing a calm voice in the wilderness, only adding more confusion and uncertainty into an already tumultuous situation. Senior managers making decisions in a crisis without the benefit of risk management “seers” do so at their own peril.
WP. What is one of the most impactful decisions in controlling costs a company can make and why?
MS. Not to place too much emphasis on the pandemic but the most impactful decisions we can make to control costs will come long before we need to pay something. In my experience, many C-Suiters focus on the strategic direction of the company in every area with the exception of risk management. Operating from an uninformed belief that risk management is a “Just in Time” resource can be dangerous to the financial health of any organization. It is our responsibility as risk managers to articulate the need to invest in the risk transfer, control, and financing needs of the organization long before we need any of these resources.
It is incumbent upon all risk professionals that we educate ourselves on the benefits of strategic risk management to eliminate short-sightedness and help us more effectively offer both short and long term solutions to our C-Suite counterparts. We need to (1) identify risk and threats to the business, (2) determine the short and long term impact, (3) devise a REASONABLY ATTAINABLE strategy from a cost and resource perspective, and (4) educate those around us as to why the plan we offer makes sense. Too often, we will be asked to implement a tactical, short term strategy when, in reality, a strategic, long term strategy is the best option. We have to master the “language” skills down to a science to clearly articulate the flaws in the push back we receive. At the end of the day, we will be judged more so on the way we presented the strategy than we ever will be on the effectiveness of the plan. If the C-Suite fails to implement the plan, we will be held accountable for the communication method we used to convince laypeople that we have the best solution. The degree of impact we have on the decisions will come to down to how well we plan and how well we communicate.
WP. You currently serve in the foodservice industry for one of the largest franchisee organizations in the United States. How has the COVID-19 crisis affected your working environment?
MS. COVID-19 is unlike any crisis I have encountered in my career. While the severity of the virus will be debated by better people than me for 100 years or more, this crisis seemed more “personal” to people than other past situations like MERS, SARS, or Swine Flu. As a result, the response to it was anything but textbook. Never in the history of pandemics did the world shutter the economy and the people. The elemental differences in the way this virus was confronted caught everyone by surprise. It is safe to say the worldwide response was characterized by “scrambling” to investigate and adopt ways to address the “new normal.” This was particularly challenging for risk managers in the restaurant industry. Almost every day a new edict or directive was generated from the Federal, state, and local governments. Restaurants operate in all of these environments and it was not uncommon for one directive to be handed down by a municipality that specifically contradicted another directive. Risk managers were busy looking at business interruption losses, insurance claims, presumptive orders, and the daily needs of the operation, all the while getting severe whiplash from the government and the media. It is safe to say nobody knew what was really happening for the first 30 days of the pandemic.
The impact to our operation brought us to critical mass on several occasions. Fortunately, our management team leaned into the crisis, identified our biggest threats, and allocated accountability to members of the team in a timely fashion. We remained as flexible as we could to ride the waves of uncertainty and made communication to the 11,000 employees in the company a priority. We continue to do this to this day. Much of the feedback on our handling of the crisis has been positive but in all honestly we have had some missteps too. We are learning from these mistakes and we are all looking forward to the after action process to help us update our crisis planning and preparedness so we can limit forced errors in future pandemics.
WP. What does the future of risk management look like in California after we get through this current crisis?
MS. Risk management is always tested in trying times and COVID-19 is no exception. My role shifted to managing the crisis almost exclusively for the last few months and I do not expect that to end anytime soon. With that said, I became aware that my usual and customary accountabilities were slipping because I failed to address the crisis using a strategic mindset. I found myself so concerned about masks, sanitizer, and protocols that it became increasingly difficult to manage the RM needs of the organization.
The basic tenets of risk management will probably be the same in the year 2120. The case can be made that the profession will evolve somewhat, and the strategies and tactics we utilize to manage and mitigate risk will evolve too. However, I do not believe the evolution will be extraordinary. Risk Management will evolve in the wake of COVID-19 because the pandemic accelerated our need to adopt long term strategies that can be readily deployed. In the future, the biggest detractor from the success of the risk manager will be our inability to remove the noise and confusion during a crisis. We will increase our value to the C-Suite when we are the knowledgeable resource there to provide solutions to problems and answer questions about the unknown even when we are not the expert. During times of crisis, we will have the opportunity to shine because we can chew gum and walk at the same time. We need to be ready to juggle a crisis, continue to manage our day-to-day activities, over-communicate recommendations and solutions, and do all of this without missing a beat.
WP. Thank you for your time, Michael. In closing how do you keep a healthy work-life balance?
MS. I have always lived by the axiom of “work hard, play hard.” I made a conscious decision years ago that I would work the hours necessary to get the job done effectively but I wasn’t going to work 80-hour weeks just to say I did. Over the years, many people I have encountered in this business would talk about the amount of time they spent at the office, almost bragging about it. It was not uncommon to hear “I worked all weekend and I still have a ton of work to do.” If you are bragging about having an 80-hour work week and the job still is not done what message are you sending to the C-Suiters of your organization? In my opinion, if a job requires more than a 50-hour a week commitment it is very likely I am not right for the job or the job is not right for me. I work smart. I know what can be achieved given the time allotted so I stay realistic about the resources needed to achieve the mission. That realism about the job is embedded in the communications I have with senior management so I can avoid an over-promise, under-deliver scenario. The result is a work-life balance where I am home most every night and have my weekends clear to spend with my wife doing the things we love to do. We enjoy the wineries, dinners out, and some travel. I appreciate all that risk management has given me. This industry has allowed me to do a job I love to do while not having to burn the candle at both ends.
WP. Thank you, Michael, for spending time with us today. We look forward to seeing you at ELEVATE 2021 next May!