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Risk Management Tip of the Month: Don’t Procrastinate.

by Karen · Comments 0

As much as I prefer to start off my articles with a positive message, such as “Be Proactive”, sometimes leading with a negative statement gathers more response. So, on this occasion, I will make an exception.

In our personal and business lives, procrastinating can lead to many negative outcomes. Being too busy to schedule that dentist appointment is eventually painful. Waiting until the last minute to book that flight can be expensive. Putting off implementation of an internal system due to having to face the pain of change is simply unintelligent.

So, why do we do this? Why do we still procrastinate? Even though we know all of the positive outcomes achieved simply by being proactive, so many of us still surrender to this internal battle of “the pain of later” vs. “the pain of now”. Why is it that when we know if “A=A”, we still choose “B”?

I will for now refer to one reason being the following: Nurture. If it is something we have been taught or experienced since an early age, it is a harder habit to break. Whether it be eating habits we know are bad, or putting off those exercise we know will better our mood, health and our overall well-being. Breaking through that mental block of getting rid of an old habit is difficult.

This past weekend, I watched one of the parts of the four part documentary on aptly named “The Weight of the Nation” http://theweightofthenation.hbo.com/. This eye-opening documentary touched on how eating habits we were taught at a young age are difficult to break. Surprising? Not really. Surprising only that the habits that were created for most of those affected by weight, were due to what was around for them to eat, and the inaccessibility of proper places to gain physical exercise. What the schools were feeding their children at an early age was one problem. Children in inner cities not having enough places to safely get exercise was another. Creating a habit of healthy eating and exercise is not all the fault of the individual and the family, but in reality part of a much bigger problem.

Because addressing positive habit forming principles starts at a much higher level than we can imagine, it is important bringing out the real reasons why we created these habits in the first place, and address that in the beginning. Trust me, because “it is always what I have done in the past” is not the answer you want to give.

Change is difficult and creating new habits requires repetition (thus, making something “habitual”). Not waiting to take the first uncomfortable step against all we have known in the past? That is the real challenge.

Risk Management Tip of the Month: Go with your gut.

by Karen · Comments 0

Do you ever get that feeling that something just isn’t right? That feeling when even though there is no definite proof that the feeling is justified, you just know that something is just off. Recently I was faced with a situation where something just didn’t seem right. But, in the world I work in, there are no gray areas. Either something is, or something is not. I know I’m being a little vague. So, before I continue on that tip, let me give you an example.

Some of the services we offer our clients include collecting and verifying the certificates of insurance of our clients’ subcontractors, contractors and vendors. With that, it is very black and white. Does the business have a minimum of $1,000,000 of general liability insurance coverage? Yes. Does the business have general liability insurance coverage per project? No. See what I mean? Black and white, no gray area there.

However, when I got that feeling, I was reminded of the one thing that no black and white result on any of our screening reports will ever be able to do.

Risk Management Tip of the Month: Listen to your gut.

We all have it. That 6^th sense that is inside each of us, our intuition, our “gut” that should be listened to, no matter what statistics or other black and white data tell you. Even though you might be defying logic, sometimes you will get that feeling that something is off. Don’t make the mistake of ignoring it.

How does this mitigate risk? Well, ever thought of working with someone, or hiring someone to be a consultant or a personal trainer when you had that feeling that something wasn’t right and dismissed it. I’ll bet you were right, and if you haven’t by now, you will know soon that the decision you made and the consequences of not listening to yourself could have been avoided. I have had consequences that have cost time and money to undo what could have been avoided altogether.

Now, in certain business scenarios, you might not always be able to justify to your boss, or your employees, or your clients as to why you are or are not doing something. But chances are they have made some decisions based on that feeling as well. Trust me on this, and trust yourself.

Risk Management Tip of the Month: You can’t ask for too much information.

by Karen · Comments 0

I know what you are thinking, but when it comes to performing due diligence, the answer is truly the opposite. In today’s economy, general contractors and other organizations must ask for more rather than less information regarding the financial and moral stability of their subcontractors, vendors and suppliers. In the end, your firm’s reputation and bottom line are at stake. Before granting that subcontract or purchase order, make sure you know as much as you can about your subs. Before grating that subcontract, follow this tip: You can’t ask for too much information.

In the November/December 2011 issue of Construction – The Magazine of the Associated General Contractors of America, one of the cover stories is titled “Managing Sub, Supplier Risks”. The article itself, titled “Due Diligence” gives detailed insight from AGC council members, insurance service providers, and General Contractor representatives who all relay a very clear message: There are an increasing number of subcontractors and suppliers who are not in business today given the economic client, and that number doesn’t look like it will decrease anytime soon. This unfortunate trend has caused a need for General Contractors to perform stricter due diligence not only larger subcontractors, but all subcontractors and suppliers.

I have said it before, but knowing is half the battle. Choosing to not ask a subcontractor or supplier to provide your organization with their sensitive information such as financial statements, project backlog or a bank credit reference letter out of fear of how they will react is just not an acceptable reason to roll the dice and hope for the best. Not knowing fully what type of business you are contracting to could lead you to unknowingly contracting to a sub who you would definitely reconsider if you knew more of the facts. At Assurance, we find business owners who get in the habit of letting a business fail, only to start another one with a “clean slate”. We also see businesses that rack up tax liens or who have a history of late-paying their bills. These types of findings throw up those red flags you need to be aware of in order to make the proper decisions when it comes to who your grant your subcontracts to. Once you know everything, you can then work more effectively with a subcontractor who maybe had a stroke of bad luck themselves, but are on their way to recovery.

Click here to read the full article from Construction.

Anyone can make a difference

by Karen · Comments 0

In this crazy world of political scandal, lagging economies and seemingly decreased moral character, one can begin to wonder about the noticeably lack of focus around us on that which is good. In years where charitable organizations are suffering due a poor economic climate and decreasing contributions is an inevitable outcome, I begin to think about the words of the Paula Cole song “Where Have All the Cowboys Gone?”

Well, I can tell you they still exist. And sometimes they are not boys, they are girls. I want to share with you a brief story about a woman who took something that affected her family, and by wanting to help others who have this same experience, she took time out of her busy schedule to figure out a way to make a difference. This woman isn’t a philanthropist with deep pockets. She is merely a young woman with a heart of gold.

Amy Reese is an employee of ours. A few months back she told me that she was going to be walking in the Alzheimer’s association’s Dallas “Walk to End Alzheimer’s” which is occurring on November 12, 2011. Amy’s grandmother was diagnosed with and eventually passed away from this disease. Amy knew of the turmoil this process caused her family, and her mother especially. She decided that in recognition of her grandmother and her mother, she wanted to set up a donation page as many others participating in the walk do in order to help raise some money to support this organization. Her beginning goal was to raise one-thousand dollars. She started by contacting everyone she knew and sending them the link to her donation page, asking for whatever they could do to help her support this cause that not only affected her family, but thousands of others.

But, she didn’t stop there. She and a friend of hers decided to organize a small event at a local Dallas hangout, and maybe get this bar and restaurant to contribute a portion of the proceeds from sales that night to the Alzheimer’s Association. But, she didn’t stop there either. She decided that if she and her friend were going to do this, why not ask for donations from friends and colleagues in the form of raffle ticket items, silent auction items and other clever little giveaways to help raise even more money. In the end, after cleverly thinking of ways to gather more support and contributions to help a cause that deeply affected her and her mother, Amy and her friend’s efforts have amounted to over $6,000 of total contributions from donations that were made directly to the donation page, and checks she is still collecting before tomorrow’s walk. I don’t know where all the cowboys have gone, but I have the pleasure of working with a real life cowgirl who has proven that anyone can make a difference.

When Amy first told us of her efforts, I was reminded of my time as VP of Philanthropy for the Dallas Junior Chamber of Commerce, and how much I enjoyed every event that I helped organize throughout that time in my life. We decided at that time to make sure that no matter how small, we would always take the time to give back. We implemented a program internally called “Assurance Gives Back” and committed to finding an organization or event quarterly that we can take part of in order to give back, if even a little. So far we have participated in and volunteered in the “Race for the Cure” benefitting the Susan G. Komen Foundation. And currently we are facilitating a food drive benefitting the North Texas Food Bank which we are proud to say we have 9 of our clients participating in with us.

The belief that anyone can make a difference no matter what goes on in the world around us is something that as humans we can forget. Hopefully this story about Amy’s efforts inspires you to remember. I know I won’t forget.

This one’s for you Amy.

http://www.kintera.org/faf/donorreg/donorpledge.asp?ievent=456151&supId=335984524&msource

All that is meant to be will be

by Karen · Comments 0

Have you ever heard this saying right in the middle of a “not-so-good” point in time, and wondered why the heck a certain situation is happening? Then looking back, maybe months or even a year or two after that negative event occurred, been able to trace all the unexpected positive things that have come out of that situation?

This is a constant occurrence in my life. Fortunately, I am currently at the latter end from some not-so-good events of the past. I am seeing that there was a lot of “what the heck is going on” moments about 2 and a half years ago, that I can now see had to happen in order to bring myself and my organization to where it is today. I won’t go into the details, but I have learned that when times get tough, instead of wondering why they are happening, I have trained myself to know that something positive will come out of it. Or better yet, I find the positives right now.

About ten years ago, I read a book called “Learned Optimism” by Martin E. P. Seligman. Back then, I was not this glorious vision of optimism that types out this blog today. In fact, little to my knowledge, I had gotten into a pretty nasty pessimistic whirlwind of “why is this happening”, and “these people around me are awful”, and “why can’t I find my way”. There is a test of sorts you can take with Seligman’s book. To my complete and utter surprise upon completion, I might as well have been walking around with a giant scarlet “P” on my forehead. I was a full blown “glass is half empty” kind of gal and didn’t even know it. That realization hit me pretty hard. I came to understand that I was finding the clouds in the silver linings of all the blessings I had been given. Not only did I not want to be seen that way, I didn’t want to be that way. So, I learned to not be.

The ebb and flow of life is always among us. Whether we choose to see the positive side of things is a learned skill. I’m not great at it by any means. Over the last ten years, I have probably taken my “F” to a “B+”. It can take a while to begin to undo something that was twenty-eight years in the making. However, I know if I keep trying, I will get my A. That is the silver lining I have no problem seeing today.

Risk Management Tip of the Month: Prevention, not reaction.

by Karen · Comments 0

I, like millions of other people, own an iPhone. I choose to always keep it password locked in case of accidental loss (which has happened, but that was an iPad – different and expensive story however). What I also have is a little different piece of protection that helps me prevent the risk of not only loss from my pocket or purse, or loss due to dropping it and shattering the screen. No, I’m not talking about the AppleCare+ plan where I can pay $49 additional dollars if I drop it. I’m talking about a little invention sparked from a similar event.

This invention is called the iPhoneChain. It is a chain that much like the chained wallets you will see from time to time on rock stars and bikers. This wonderful little item clicks into the iPhone, and hooks on to whatever you want it to: belt loop, purse strap, briefcase, etc. All the cases in the world won’t protect you if someone tries to snag your phone. This clever tool mitigates out the risk of a phone being taken from you by theft, or slippery fingers, and it costs much less that buying a care plan and paying the additional fee. It is pure simple genius.

I have this item because of this one premise: Prevention, not reaction.

There is always going to be costs in preventing something from happening. But the costs are always minimal compared to the costs associated with reacting to a negative event. In our world, does eating healthy cost more? Unfortunately yes. Does exercising take time away from something else we can be doing? Yes. How much does diabetes treatments or heart surgeries costs? Depends of course, but I can say for sure that it costs much more than what it would take to have prevented them. When our clients take a look at how much it costs to aid in the prevention of contracting to the wrong businesses, verses what happens if just one of their contractors or vendors fails or defaults, the words of Ben Franklin come to mind: “An ounce of prevention is worth a pound of cure”. And in our clients’ cases that pound can be tens of thousands of dollars, sometimes more.

Now, does focusing on prevention always guarantee the elimination of a negative outcome? Of course not, there are always going to be things outside of our control. However, when we keep the focus on prevention, the odds will always be in our favor. I can’t prevent myself from dropping my phone, but I reduce the risk of it actually hitting the cement from making sure I have my iPhoneChain clipped on it and attached to my purse or person. Some of our clients tell us they “just didn’t know a service like ours existed”. I hear that every time I show someone my iPhoneChain. So – here it is. I recommend you watch the videos.

This one’s for you John.

http://youtu.be/mgPC4fDtL10

http://www.iphonechain.com

There is always a way.

by Karen · Comments 0

As I am writing this, I am in San Francisco. My husband is attending a due diligence meeting for his practice, and we have decided to extend through the weekend to enjoy this wonderful city. In making our travel arrangements, and because of a previous experience of mine, I told my husband when booking our flight that we should look at flying out on Virgin America. My previous experience with Virgin America was not only positive, but different than any other airline I have flown. Think of the smiles and hospitality of flying Southwest Airlines meets assigned seating, newer airplanes and upgraded in-flight amenities.

As we finish up boarding, and prior to Virgin America’s innovative way of going through their pre-flight announcements regarding the exits and safety belts, we experience something I never have in my 38 years of flying. Out came our captain. As he walked through first class then through parts of coach, he stopped and shook the hands of passengers. He welcomed us aboard and thanked us for choosing his airline. Then, instead of the usual “This is your captain speaking” coming in over the intercom, he stood close to the front, and gave his welcome aboard speech to all of us, looking and smiling at us with expressions of gratitude, as well as letting us know that we will have a smooth ride all the way here. It reminded me that just when you think that a business is doing something different and better, there is always a way to continue to bring a little something extra to the table to set yourself apart from the competition.

Sometimes in any organization, it is easy to get stuck in the “if it isn’t broke, don’t fix it” mentality. Imagine how great we can be, if instead of that dated line of thinking, we focused on taking existing products, processes, how we treat our employees and how we serve our clients and changed it just for the sake of creating a better overall experience for each party involved. It is this type of proactive thinking that helps an organization like Virgin America and many others that give us these little extras stand apart from the rest. I’ll buy a ticket for that ride any day.

In closing and for your viewing pleasure…the Virgin America Safety Video. Enjoy. http://www.youtube.com/watch?v=j6ixjc5yeMU

Do we really have to cut loose?

by Karen · Comments 0

As I am contemplating whether or not the new star of “Footloose” has six degrees of separation to Kevin Bacon, the Kenny Loggins’ title song starts playing in my head. Because of that, I start to think. Do we really have to cut loose? And because I can somehow relate an obscure reference to what we see here at Assurance, I can tell you the answer. When it relates to how our current lines of thinking keep us from implementing needed change, or when we are unhappy about a specific result we are getting in our organization, the answer of course is yes.

Cut loose from the way things have always been.

Especially, if you know it isn’t working. I can’t tell you how many times we meet with prospective clients who tell us they “need to implement something different soon”, and then months and months go by without any changes. There is a prospect we have been talking with that will send us email after email about different subcontractors they have used which end up failing. And we always ask them when they are going to be ready to change? We can never mitigate away all risk, but putting different systems and checkpoints in place can decrease the frequency of which our clients are affected by beginning with a more diligent selection process at the start. Soon never happens soon enough, and sometimes turns into never.

Cut loose from the fear of what might happen.

If you are afraid of repeating the same issues and mistakes, be afraid instead of what will surely happen again if no change is implemented. If there is a giant elephant in the room, are you going to continue to ignore it while it stomps all over your profits or reputation? How many times has your organization worked with a vendor or subcontractor for years and “felt like you knew them”, to only have them suddenly be gone? That sting hurts, however we see a lot of firms who are still completing their qualification process in the same ways they have done in the past. Remember, the partnership you build with your subcontractors and vendors is a synergy. They must trust in you that if they contract to you, you will fulfill your end of the bargain by paying them what is due. All you would be doing is implementing an updated system to make sure they can fulfill their end. How many of you feel like you may be “insulting” them if you ask them to go through a more detailed qualification process? If you know your system has gaps, it is time to do something about it, and delete out the fear of the unknown.

Going back to the beginning, with the degrees of separation from Kevin Bacon question, I will end this post with a fun little fact about myself. I am actually two degrees of separation from Kevin Bacon. If you get through this, and are interested in how it is so, feel free to email me at Karen@proqualverified.com. I’d be happy to share.

Stay hungry. Stay foolish.

by Karen · Comments 0

What can I say today without reflecting on the fact that Steve Jobs, at the young age of 56 has passed. I can remember being in high school learning how to type on one of the 15 Macintosh computers our high school had in our one computer science lab. I remember the flimsy feel of the floppy disk. Fast forward, and I remember being in my college Intro to Advertising classroom at UT watching some of the best commercials in history, with the 1984 commercial for the Macintosh at the top of the charts. I remember my first iMac. Then my Powerbook. Then of course, trading in my Walkman for an iPod (which turned into ipods). The “I told you so” chants from my friends as I swapped out my Blackberry for my iPhone. In the end, I got the iPad just for fun.

As I listened again to Steve Jobs’ 2005 Stanford commencement address today, I was reminded of many wonderful pieces of advice and reusable quotes from one of the major innovators of our time. And just how we all as a people are different, we all hear a quote like the following, and feel like it is being said to us, at exactly the time that we need to hear it.

“Don’t let the noise of other people’s opinions drown out your own inner voice. Have the courage to follow your heart and your own intuition.”

In many a professional life, we sometimes have to make deliberate choices to keep pressing towards our goals. No matter what others say, and no matter how long it takes, we keep going because we just “know” we are on the right path. It is more than often than not very difficult to keep moving forward as self-doubt creeps in. Boy does it come in even faster when the criticisms of people whose opinions you value are spoken as well. I can’t speak for anyone else, but within my experiences, every single time I went against my gut, I was wrong.

“Sometimes life’s going to hit you in the head with a brick. Don’t lose faith.”

I’ll bet there are a lot of you out there that think you can build a house with all the bricks that have hit you in the head. Sometimes I think my house would be the biggest on the block. And when I start feeling that way, the first thing I think about is how I have already won the life lottery by being born in this incredible country. The second thing I think about is all of the learnings I have discovered on the way to where I am today. I don’t always know how things will work out, but I do always have that faith that they will. And if I ever start to lose faith, I take a deep breath, listen to the theme from Rocky, and my faith comes flying back and brings with it a gallon of confidence, and a million dollar smile.

“Stay hungry. Stay foolish.”

The last quote I will reference from the commencement speech, and the title of this entry came from the Whole Earth Catalog: “Stay hungry. Stay foolish.” I love to challenge myself to do things I might not have been comfortable doing a year ago, much less 10 years ago. And I know for a fact, that the only reason I am able to rise up to these challenges today is because of all the “bricks in the face” that I was able to get past before. There is a way to achieve your goals. There is always a way. There will always be people you know who want to help you. All you have to do is ask. Sometimes you will have to get out of your comfort zone, maybe even feel foolish to get the help you need in order to get to where you want to be. But whether in business or just in life – I promise you, it is worth it. I have been called crazy by many a critic because for about 7 years of my life, I spent my weekends jumping out of airplanes. But I can tell you one thing that I know for sure – by doing that “foolish” thing approximately seven hundred times, I knew that if I put my mind to it, I could achieve anything. Don’t let anyone or anything keep you from jumping.

This one’s for you Steve. http://www.youtube.com/watch?v=OYecfV3ubP8

Begin with the end in mind.

by Karen · Comments 0

When our team at Assurance Screening and I first decided to begin my blog, we thought of what we wanted it to become. We decided that in the beginning, we would use it as a good way to get out monthly risk management tips, and my weekly thoughts and observations regarding the types of services we provide our clients, the feedback we are getting regarding our client’s use of our services, and thoughts around risk management principles within a multitude of areas. In true Steven Covey form, we are beginning with the end in mind.

Risk Management Tip of the Month: Begin with the end in mind.

When we talk about this, what we are essentially doing is visualizing the end result of your organizational desires. When Jason Terry with the Dallas Mavericks tattooed himself with the NBA Championship trophy, his end, and the end goal of the Dallas Mavericks was to have that trophy. They as a team took the necessary steps every day, with every practice, and during every game to mentally and physically accomplish what they needed to do to achieve their goal. Believe it or not, this same principle can be employed for something as fun and exciting as vendor and subcontractor risk mitigation and compliance.

If your goal is to mitigate the risks you are taking with your current subcontractor and vendor pool to minimize the costs your organization faces with the current ineffectiveness of your current processes, then that is your end. The first step is to assess where you are at. Consider answering the following for your organization:

Do you have a standardized subcontractor or vendor qualification form? If yes, are you requiring each subcontractor or vendor to update their information at least annually?
Who is responsible, and what processes do you have in place to verify this data that is received to be factual?
Are you confident that all your subcontractors and vendors carry the required amount and types of insurance that your organization requires?
Where in your organization does “the buck stop”? If something is missed, who is ultimately held responsible for the added costs, and delayed projects?

Once you know the gaps, you can define what it looks like when your gaps are no longer in your way. Too many organizations focus on sales and additions to the bottom line, and then forget about those issues that can take away from profits, like vendor and subcontractor defaults until something happens. Being reactive versus proactive rarely gets any organization to where they want to be in the end. Focus on what you want, decide how it will happen, and be proactive on defining out the responsibilities regarding who will be responsible for what. If you do that, then you have a pretty good start.