The county’s risk journey

What is risk management? This is a common question posed to The Office of Risk Management Services. Very much like the title implies, the office manages risk. But, what is risk?

jenniver hills

Pictured: Office of Risk Management Director Jennifer Hills

Director Jennifer Hills describes risk as, “unplanned events that have the potential to prevent an organization from meeting their objectives.” That’s the traditional way of describing it. Hills went on to explain how King County has changed its adverse view of risk to a more progressive view: risk as an opportunity for gains as well as losses.

With Executive Dow Constantine’s encouragement, Hills has been working to change the way King County approaches risk. Rather than focusing on avoiding negative risk, Executive Constantine wants the County to use a balanced approach and take risk where it can add value. This can be challenging given how we often view bad occurrences as outweighing equally good ones. When we over-react to negative situations, this prevents us from balancing risks.

Working with the Consortium of Advanced Management International (CAM-I), Hills’ team has developed a risk-value curve to visualize when risk can be optimized. Within this model, if an organization takes on too little risk, it is ineffective and missing beneficial opportunities. If an organization takes on too much risk, it will find itself in a crisis with unwanted exposures. However, there is a middle ground where risk is balanced and optimized—and that’s where Hills’ wants to place the County.

risk value curve

“There is also the risk of status quo to consider,” Hills added, “sometimes we forget to evaluate the risk of standing still.” Hills’ mission is to encourage departments to take informed risks. Within Hills’ own office, she encourages change. Driven by our Equity and Social Justice Initiative, Hills has been working to change the County’s iron-clad insurance policy language to a more flexible language when it will allow the County to engage with community-based organizations. By also allowing her customer service representatives to apply their experience and discretion in their public interactions, her office can provide quicker resolution to claims, more engaged employees, and higher satisfaction with the customer service experience.

In addition to adopting CAM-I’s risk value curve, Hills has implemented an Enterprise Risk Management (ERM) program, run by Sean Catanese, which includes department risk assessments, an inter-departmental ERM work group, and a King County Risk Register of the priority risks, corresponding owners, and mitigation plans. King County has become a leader in the public sector on ERM and risk optimization. The County recently participated in a Harvard ERM Benchmarking study that measured the ERM programs of 25 organizations. Of the 12 criteria used to evaluate the organizations, King County met all but two.

Hills has received positive feedback and excitement about the changing risk culture in King County. Moving forward, Hills and her team plan to work with the Executive’s Office to create risk appetite statements to specify the amount of risk King County is willing to seek in the pursuit of its objectives. With innovative approaches such as this, it’s no wonder that King County is well on the way in its mission to be The Best Run Government.

One thought on “The county’s risk journey

  1. This is a much needed improvement that should be of assistance to our capital improvement programs and utility services. I hope to see more reliance on internal experienced professional engineers to provide quality control/ quality assurance and risk assessment advice on technical information and consultant design services that feeds in to risk management.

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