Recently we hosted the webinar, Protecting Your People Abroad Protects Your People at Home. During this webinar, we shared an insider perspective on business travel risks that underscore the need for a proactive traveler protection strategy. At the end of the session, three critical questions about travel risk management came up, and now we’re sharing them with you—along with the responses—from the webinar presenter, Professor Daniel Diermeier, PhD., Reputation and Crisis Management expert:
- You mentioned at the beginning that risks extend beyond financial concerns. As a small company with limited resources, I’d like to learn a little bit more about the financial risk side of things and what types of resources we should have in place. Can you explain?
- How can I convince upper management that traveler protection is an enterprise wide, high priority issue?
- Which functional level should be involved in proactively creating and executing a travel risk management strategy?
Q: You mentioned at the beginning [of the webinar] that risks extend beyond financial concerns. As a small company with limited resources, I’d like to learn a little bit more about the financial risk side of things and what types of resources we should have in place. Can you explain?
A: Yes, so the financial risk side is something we only spent a little bit of time on. Financial risks pose a direct cost to the company, like the evacuation of an employee. Or the other piece that there’s a lot of focus on is lost productivity. Now, it’s possible to protect your company against financial risks with insurance products. The other piece is many companies just basically self-insure against those. It’s important for you to understand what your company’s financial risk exposure is and the specific, preventive measures you can take. I think it’s important to note that even if you take care of this dimension of the risk portfolio, there are other risks that can be far more severe and far more impactful that you need to pay attention to as well. So yes, it’s important to be prepared for the financial concerns, but make sure that the approach you’re taking goes beyond that.
Q: How can I convince upper management that traveler protection is an enterprise-wide, high priority issue?
A: This is very important, especially for those of you that are knee-deep in these types of activities. You want to connect with the types of concerns that your senior leaders have. If you don’t do that, then you’re typically viewed as a cost center. So what does it mean to connect with upper management at an enterprise wide level? What you want to think about and ask yourself is, “What is it that senior managers really care about?” “What is it that a CEO thinks when they wake up in the morning and view as their top priority?” “What is really on the CEO’s agenda?” What is it that if you run a company or are on a board of directors, you’re most concerned about? Well the answer often comes down to two or three concerns. Number one: People. You talk to CEOs and they ask themselves: What’s the source of all value? What’s the source of all success? What’s the source of failure? It’s people. What that means is that people are one of the core components of a sustained competitive advantage. And what we’ve learned is, yes, there’s unemployment… and yes, there are lots of people looking for jobs—but there is severe competition to on-board the right people, develop them, retain them and make sure they are fully engaged. These are serious problems that every larger and even smaller company has to deal with on a day-to-day basis. So that’s the people side.
And then the second piece that I was talking about was the reputational side. I mean, talk to any institution that matters and ask them if trust in their businesses matters. Of course everybody says yes! And so often, reputation is really what makes or breaks success of the company. You have to maintain the trust of your customers. You have to maintain the trust of your investors… and so forth. So if you can connect with the types of concerns that senior leaders have – with your profile, the importance of what your company does, will be elevated.
And the last piece is the legal side. Well… I got to tell you—there are very few things that boards of directors care more about than the legal risk and the regulatory side. That’s just up there with people and reputation—no senior executive, member of the board, or corporate director wants to take a decision that inadvertently increases their legal risk. So the way I would think about this and what I would recommend to you is: always ask yourself how your situation connects with the agenda of the senior executives. For example, two years ago, you probably thought about how you’re going to protect your travelers. But now, you have more concerns, like Ebola or whatever the current crisis overseas is. Two years ago, maybe you decided you’re not going to spend the money to have these processes in place—you thought it just didn’t make sense from an ROI point of view. Now, try to explain that to your own people, to outside customers or in a court of law. It would be very difficult to do so. So a good thing to ask yourself: what can I do now so that I will be the hero in the crisis that may occur in a year or even two years from now?
Q: Which functional level should be involved in proactively creating and executing a travel risk management strategy?
A: My sense is that it’s very important that professionals who are responsible for that should be connected with some of the core functionalities. So it depends a little bit by company, but in some cases, travel risk management is really part of the HR function. The people function. My census is if you do that, then you want to connect with the people side as well. But it’s important for you to reach out to other corporate functions as well. Could be the customer side. Could be the risk management side if you have an enterprise risk management system. Could be the legal side. Could be the regulatory side. There needs to be one owner that really pushes this forward—maybe that’s in the HR side, on the people side. But it’s crucial that you have connectivity with other parts of the business as well. The more your company can think about this from an enterprise point of view, the more successful you will be in developing a best-in-class travel risk management system.
Want to learn more about business travel risks? Watch the webinar that prompted this discussion.