When Kurt Meyer took the job as head of risk and insurance for the swiss national grid, he had no idea that it would lead him to reshape the conversation around risk management.
He started at Swissgrid, shortly after the company had brought the entire of Switzerland’s extra-high voltage electricity infrastructure under one roof. And that was no mean feat for a risk manager.
First of all, in most businesses a large part of a risk manager’s role involves planning to avoid the worst-case scenario for any company, unscheduled downtime. And that is enough pressure in itself.
But imagine being the risk manager responsible for avoiding downtime for every company in Switzerland that would suffer in case of a power outage.
“If the transmission system operator fails, then basically economy and society would come to a full stop,” says Meyer.
Within a day or so, that could cost the country £6bn, Swiss government estimates. However, if the outage continues for extended time then that bill could easily run into the hundreds of billions.
And it wasn’t just the economic cost of potential downtime that Meyer had to worry about. He also had engineers working to distribute thousands of megawatts of power. Doing that job, if accidents happen, people die.
“There are a couple of issues which even go further than risk management,” says Meyer, explaining that Swissgrid was also facing an integration issue.
“If you take over a system from various previous owners, then you have a heterogeneous technology all over the place, that makes it even more difficult to manage.” Not only that but the teams had all converged at Swissgrid from different organisations.
“That made life not really easier,” Meyer said bluntly. But Swissgrid was stuck with the heterogeneous system.
“In this field, technology is a long-term investment,” he explains. “Typically, if you buy a transformer - and these transformers are the size of houses - they live about 50 to 60 years.”
“It’s not something we can say, “Okay, we’ll just get rid of it and buy a new one’.”
And it was working but it was not what the engineers would have designed if they had been asked to come up with a system from scratch, Meyer says.
“So I started to think: “How do we get more from the reactive to the proactive mode of operation?”
“How can we forecast risks which are just developing, which might be still small, and not obvious?”
He said that inspired a close collaboration with Prof. Anette Mikes from University of Lausanne, researching everything from the Deepwater Horizon disaster where an oil rig exploded in the Gulf of Mexico to the Grenfell tragedy that saw a London tower block go up in flames, killing dozens.
That research led him to a conclusion: these events were all preventable.
“That was good news in one sense,” says Meyer. “You can do something about it, it’s not just happening like an earthquake.”
“But the bad news is, obviously if you think of these large disasters, why haven’t they been prevented?”
The answer to that is a complex one. Each one of those events has what Meyer refers to as “risk incubators” or “weak signals” stemming from the underlying risk that eventually turned into a full scale disaster.
“You can take the analogy of a fever,” says Meyer. “If you start getting sick, you use a thermometer to measure the temperature.
“And while you’re still feeling sort of okay you can see that something is going wrong. And you may consider either going to bed, staying at home or taking some medicine.”
What has happened in these disasters is these signals were there, but they haven’t been detected at the levels where decisions have been taken. And in some cases, the signals were even known to decision-makers but nobody was sitting at the table to make them heard
“What has happened in these disasters is these signals were there, but they haven’t been detected at the levels where decisions have been taken. And in some cases, the signals were even known to decision-makers but nobody was sitting at the table to make them heard.”
From this analysis, Meyer recognised a bifurcation of information between those on the shop floor, who picked up on these weak signals first hand, and those making the decisions - who could prevent a disaster.
Management insisted that everyone in the organisation understood that safety was the number one priority for the firm. But Meyer doubted that, so he conducted a survey.
“Management was saying: ‘Security and safety is number one value here, because we operate highly dangerous infrastructure, and we can’t allow that people die because of this infrastructure’.”
But the message was different in the corridors and workshops far away from the top floor.
“If you talk to people on the shop floor, they’re saying: ‘Well of course we hear the CEO’s message when he says safety is important, but on the other hand, we have deadlines and we have budgets and stuff like that.
“So sometimes we have to take shortcuts, and these shortcuts, they bear a higher risk on the safety end.”
That made Meyer realise something. “We need more eyes and we need more ears in the company,” he recognised. That led to a big question: “How can we make every single person in the company be a part of my risk team?”
That caused him to establish RiskTalk, a self-reporting system that encouraged employees from any level of the organisation to detail any element of their job that they thought could be redesigned to lower the systemic risk to the firm.
“It’s a channel for people to report ideas, problems, accidents, whatever,” Meyer explains.
That’s nothing new, you may say. But RiskTalk has been set up in a way to incentivise people to report risks by giving them live feedback about how that message is being dealt with.
“We need more eyes and we need more ears in the company. How can we make every single person in the company be a part of my risk team?
“One key issue is that to ensure that action happens and that things are fixed in a decent way,” Meyer says.
“So what we have done, RiskTalk provides a dashboard for what we call a triage team,” he explains.
And that team is made up of senior decision makers who then come up with an action plan of how to mitigate the risk that’s been reported.
“They oversee the actions which have been taken, and report back to the person who has sent the message,” says Meyer.
But it’s not just about having a good system in place, it’s about having the right culture to encourage employees to report risks.
“Number one is that senior management clearly has to state that they want this transparency and nobody will be punished,” says Meyer. But just to be sure, RiskTalk also enables employees to report concerns anonymously.
The system worked so well at Swissgrid - where his team were receiving a report a day from their almost 500 employees - that Meyer wanted to take RiskTalk beyond his own organisation.
“I no longer work for Swissgrid, I work for RiskTalk,” Meyer explains.
“I changed sides. The idea is so convincing that I believe there is a huge value in it for many firms, also many possible applications of RiskTalk, so I decided to join this company and to bring it forward.”
Meyer is now Co-CEO of RiskTalk.
Transforming risk communication
Meyer will be speaking at our one-day conference – Risk Forum APAC 2019 in Singapore on 30 May.
His presentation will focus on embedding risk within an organisation. However, the challenge is that, too often, when employees are asked to carry out traditional ‘risk assessments’, reporting proclivity plummets.
Meyer will share his experience of developing RiskTalk at Swissgrid, which has transformed not only risk communication but also risk culture across the organisation. The success of this case is rooted in a defined set of values. The Swissgrid case suggests that the risk function should be calling attention to gaps between “to be” and “practised” values, as root causes for significant risks and ultimately promote and enforce ethical behaviour.