Maintaining an Award-Winning ERM Program with Michael Zuraw
RIMScast
Navigating Risk: Insights on ERM Evolution
This chapter explores the evolution of Enterprise Risk Management (ERM) programs, focusing on enhancements in efficiency and the integration of AI for better data collection. It emphasizes the need for accountability and strong relationships with leadership to improve risk identification. Additionally, the chapter highlights the importance of disciplined decision-making and innovative interview techniques in capturing a comprehensive view of risks.
Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.
Justin Smulison interviews Michael Zuraw about his career in risk management, including how the CHIPS Act impacts him and what it takes to lead ERM at a semiconductor manufacturer.
Justin asks about Michael's RIMS ERM Award win, how new leadership at Onsemi has reacted to the program, how involved new leadership is in ERM, and how the program has changed since the win. Michael tells about his ERM 2024 sessions and how he likes his work with the SERMC.
Listen for ERM tips for improvement for your organization.
Key Takeaways:
[:01] About RIMS.
[:15] About this episode. Our guest is Michael Zuraw of On Semiconductor. He's a past recipient of the ERM Award of Distinction. We will discuss what it takes to maintain an award-winning ERM program.
[:41] Events! This is the last call for the RIMS Chicago Chapter's Chicagoland Risk Forum, which will be held on September 19th, 2024 at the Old Post office. There is no charge for risk management professionals or risk department staff! Register at ChicagolandRiskForum.org.
[1:05] We are just a few weeks away from the RIMS Canada Conference 2024 which will be held from October 6th through the 9th in Vancouver. Visit RIMSCanadaConference.ca to register.
[1:19] Registration is also open for the RIMS Western Regional, which will be held from September 29th through October 1st at the Sun River Resort in Oregon. Register at RIMSWesternRegional.com.
[1:33] We want you to join us in Boston on November 18th and 19th for the RIMS ERM Conference 2024. The full agenda is live. It runs the gamut of ERM. Check it out! A link to register is on this page.
[1:49] All RIMS regional conference information can be found on the Events page at RIMS.org.
[1:55] RIMS-CRMP-FED! The next RIMS-CRMP-FED Exam Course will be hosted along with George Mason University from December 3rd through the 5th. Links to these courses can be found through the certification page of RIMS.org and this episode's show notes.
[2:12] RIMS Virtual Workshops! On October 9th and 10th, Chris Hansen returns to deliver Fundamentals of Insurance. He's very popular in the Workers' Comp space.
[2:30] In our prior episode, we had Elise Farnham of Illumine Consulting join us. She will be leading two upcoming courses for us. On September 25th and 26th, we've got Applying and Integrating ERM and on October 3rd and 4th, we have Fundamentals of Risk Management.
[2:47] Other dates for the Fall and Winter are available on the Virtual Workshops Calendar of RIMS.org/virtualworkshops.
[2:56] Interview! Our guest today, Michael Zuraw, is a member of our Strategic and Enterprise Risk Management Council and is the Senior Director for Global Enterprise Risk Management at On Semiconductor.
[3:16] I met Michael at the RIMS ERM Conference 2019 in New Orleans, where he accepted an ERM Global Award of Distinction honor for the program he leads at Onsemi. I wanted to catch up with him now and see how the program is evolving under new company leadership.
[3:38] Michael will be presenting or co-presenting three sessions at the RIMS ERM Conference 2024 in Boston, so we'll talk all about that and we'll get his philosophies on what it takes to keep an award-winning ERM program going strong in 2024. Michael Zuraw, welcome to RIMScast!
[4:21] Michael shares his memories of the RIMS ERM Conference 2019 at the Roosevelt Hotel in New Orleans. That was his first RIMS ERM event. He notes how collaborative ERM professionals are, whatever their industry or employer.
[5:30] Justin and Michael collaborated on an interview for the ERM Q&A series. A link is in this interview's show notes. Since then, they have met at RISKWORLD and ERM Conferences. Michael feels honored to serve on the RIMS Strategic and Enterprise Risk Management Council.
[6:15] Michael is the co-author of two upcoming RIMS Executive Reports and White Papers. The first is part of a series of scenario-planning guides, about the Pre-Mortem Exercise to unlock some risk identification and help to manage biases and risks that might cause you to fail.
[7:00] The second paper is on risk interdependencies or interconnectedness. Risks don't stay in silos. We have risk registers by which we manage and organize risks, but generally, we underestimate risk because we don't account for the cascading effect of risk events.
[7:45] Justin will update the show notes for this episode to reflect when these two papers come out. After September, listeners can check out the show notes and download these papers.
[8:15] Michael has been in ERM at Onsemi for 10 years. His bachelor's and master's degrees are in electrical engineering. He worked in telecom before semiconductors. He worked on the business management side.
[8:45] When Onsemi formalized its ERM program, it named a Chief Risk Officer. Michael had a conversation with him. If risk is going to be treated as part of a strategy, Michael was interested. If it was a governance or reporting function, it wasn't for Michael.
[9:08] The Chief Risk Officer had a similar philosophy. He delegated putting the program together to Michael and supported him with what he needed. Michael had a lot of freedom. He's been doing it ever since.
[9:54] Michael discusses how the CHIPS Act impacts Onsemi. They have a government affairs group to focus on that. Michael is always looking at what parts of their manufacturing and infrastructure need to expand.
[10:25] The CHIPS Act provides an incentive for doing more pieces in the U.S. There are similar programs in other countries where Onsemi has a footprint. Onsemi is in 10 countries with 20-plus manufacturing sites and more, including sales and support functions.
[10:50] Michael says they're always reviewing their footprint, where they need to expand, and how. Expanding the manufacturing of semiconductors takes tens of millions of dollars and years to build. When there is government support, every semiconductor company takes note.
[11:46] Onsemi is a tech-heavy, engineering-heavy global company with 30,000 employees. You have to get very analytical with the engineering group.
[12:33] Engineers are trained to solve problems full-speed ahead, using key assumptions they have in their heads. Michael is asking the organization to step back and hear what those assumptions are first. An assumption may be based 90% in fact but 10% in uncertainty.
[13:19] Michael asks the organization to discuss the 10% probability that the opposite is true. That's where the risk lies. Can they make that 10% likelihood into 2%? That's risk mitigation.
[13:34] In tech-heavy industries, we acknowledge and respect engineering training to solve problems, drive solutions, and work within their vocabulary. How do we put a risk framework into that model so the company's risk profile can be improved? It takes time.
[14:02] Is Michael a patient person? It depends! More often than not.
[14:53] When Michael won the ERM Global Award of Distinction for the ERM program at Onsemi, the Chief Risk Officer called the Chairman of the Board and the Risk Committee to let them know of the Award. It was vindication that the company was going in the right direction.
[15:34] The Risk department felt they were seeing the positive impact of the ERM Program. They saw the industry felt the emerging risk topic they submitted with their application was innovative and positive.
[15:55] That program within the ERM Program was well-regarded within the company and led people to think about the future and get into an open discussion. People wanted to participate.
[16:30] About four years ago, Onsemi's long-time COO retired and new leadership came in. Michael tells how the ERM Program changed with the new leadership. They were much more focused on accountability and ownership. They wanted to remove self-reporting.
[18:47] It's RIMS Plug Time! RIMS Webinars! On September 19th, Origami Risk returns to deliver Leveraging Integrated Risk Management For Strategic Advantage. On September 26th, Archer returns to discuss The Future of RMIS: Beyond Traditional Approaches.
[19:07] On October 3rd, Diligent will host Mastering ERM: Leveraging Internal and External Risk Factors for Strategic Advantage. On October 10th, Zurich returns to present Long-Term Property Strategies for a Resilient Future.
[19:24] On October 24th, HUB International returns for the fourth installment of their Ready for Tomorrow series, From AI to the SEC: The Future of D&O Litigation and Regulatory Exposures.
[19:37] On November 4th, Justin will be hosting a special RIMS Webinar Presentation, Lessons from Veterans on Strategic Risk Leadership. That session will feature insights and perspectives from risk managers who had previously served in the U.S. Armed Services.
[19:56] More webinars will be announced soon and added to the RIMS.org/webinars page. Go there to register. As always, registration is complimentary for RIMS members.
[20:08] The Spencer Educational Foundation's goal is to help build a talent pipeline of risk management and insurance professionals. That is achieved, in part, by a collaboration with risk management and insurance educators across the U.S. and Canada.
[20:23] Whether you want to apply for a grant, participate in the Risk Manager on Campus program, or just learn more about Spencer, visit SpencerEd.org.
[20:33] On that note, applications are being accepted for internship grants. Since 1999, Spenser has awarded over $2.7 million in internship grants to over 540 recipients. To be eligible, risk managers must be based in the United States, Canada, or Bermuda.
[20:51] The application deadline is October 15th, 2024. Awardees are typically notified at the beginning of December. A link to the Internship Grants page is in this episode's show notes.
[21:05] Let's Return to My Interview with Michael Zuraw!
[21:23] The program shifted with new management to an open 45-minute interview. Michael doesn't ask individuals about any specific risk but starts them talking about their concerns relative to company strategy and execution.
[21:42] It's much more challenging to analyze the input from the interview but it identifies items the company might otherwise miss.
[21:52] The issues are ranked and tiered. Then it comes down to assigning ownership and accountability. Leaders pick out issues each year and assign cross-functional teams with action plans to address them. Bonus goals are tied to the plans.
[22:16] Depending on what the company, the board, and the risk committees want to focus on, the teams must be comfortable with making adjustments. The program and ERM managers can be successful as the shifts happen. Be open-minded to new approaches and ideas. Be flexible.
[23:10] Onsemi just finished its fourth cycle of interviews and action teams, as the ERM program is in its 10th year. In its first five years, it had reached maturity. Then under new management, it took time to adapt to the interviews and analyze the data.
[23:48] Michael says, now in our fourth cycle of interviews, our maturity level is back up. We have good interactions with the board and several committees within the board. We have an executive risk committee that we function very well with. We're much more efficient in doing it.
[24:11] Onsemi has integrated some AI processing of interviews. Michael has himself and a staff of two. As they get more efficient, they conduct better interviews because they're not worried about taking notes and getting the notes right.
[24:35] As the ERM program matures, the ERM managers get better at their jobs and their interviewees get better at identifying risks.
[24:52] At the ERM Conference on November 18th Michael will lead two sessions. He will lead the "Dancing with Uncertainty" morning session. Michael says this is a discussion on decision process, decision-making, decision quality, and risk.
[25:26] It's not uncommon for executives to believe that the higher the title, the better the decision-making skill. Michael disagrees. There is an approach of discipline in decision-making that allows you to understand uncertainty and how it leads to risk.
[26:00] Michael often says that if everyone in your company, from janitor to CEO and everyone in between, were 20% more disciplined in how they make decisions, your company would be doing quite a bit better. So, what discipline can be applied to decision-making to reduce risk?
[26:29] In the afternoon, a member of Michael's staff, Alicia Tuckett, will present "The Illusion of Insight: Why Risk Interviews Fail to Deliver," on how to do open-ended interviews, analyze the conversational input, and turn it into risk statements, risk categories, and data to analyze.
[29:23] Michael hopes to solicit the crowd for ideas to evolve the ERM program even more.
[29:33] Michael will host another session that day with his SERMC colleague Denise Sobczak, "Pre-Mortem or Post-Mortem. If You Were a Patient, Which Would You Choose?" on scenario planning to weed out risks by thinking of everything that might go wrong before it does.
[31:11] Michael calls having a Pre-Mortem a great tool. It's efficient and not expensive to run. It doesn't take much time. It's one of the biggest bang-for-the-buck scenario approaches for risk management.
[31:22] At the ERM Conference 2023, Denise co-presented on the scenario planning sessions. You are in for quality discussions at the RIMS ERM Conference 2024, for all sessions. Michael's insight will be invaluable.
[32:02] Justin tells Michael it has been such a pleasure to have him here on RIMScast! Justin will update this episode's show notes with the links to Michael's two papers coming in the Fall. He looks forward to seeing Michael on November 18th and 19th.
[32:19] Justin thanks Michael for being such a valuable contributor to the SERMC at RIMS. Michael says he learns something new every time he gets together with the council.
[32:42] Special thanks again to Michael Zuraw for joining us here on RIMScast. Michael has two RIMS reports that will be published on the Risk Knowledge page of RIMS.org in the next couple of weeks. Check back then on this episode's show notes for the updated links.
[33:03] Michael will be presenting or co-presenting three sessions at the RIMS ERM Conference 2024 on November 18th, starting in the morning with "Dancing with Uncertainty," and then in the afternoon with "The Illusion of Insight: Why Risk Interviews Fail to Deliver."
[33:24] Michael will help close out the day with "Pre-Mortem or Post-Mortem. If You Were a Patient, Which Would You Choose?"
[33:31] There is also a link in this interview's show notes to Michael's ERM Q&A based on his 2019 win of the ERM Award of Distinction.
[33:44] There are lots of resources here today, especially for all you ERM fans out there! Check them out!
[33:50] It's RIMS plug time! The RIMS App is available to RIMS members exclusively. Go to the App Store and download the RIMS App with all sorts of RIMS resources and coverage. It's different from the RIMS Events App. Everyone loves the RIMS App!
[34:23] You can sponsor a RIMScast episode for this, our weekly show, or a dedicated episode. Links to sponsored episodes are in our show notes. RIMScast has a global audience of risk and insurance professionals, legal professionals, students, business leaders, C-Suite executives, and more. Let's collaborate and help you reach them! Contact pd@rims.org for more information.
[35:08] Become a RIMS member and get access to the tools, thought leadership, and network you need to succeed. Visit RIMS.org/membership or email membershipdept@RIMS.org for more information.
[35:26] Risk Knowledge is the RIMS searchable content library that provides relevant information for today's risk professionals. Materials include RIMS executive reports, survey findings, contributed articles, industry research, benchmarking data, and more.
[35:42] For the best reporting on the profession of risk management, read Risk Management Magazine at RMMagazine.com. It is written and published by the best minds in risk management.
[35:56] Justin Smulison is the Business Content Manager at RIMS. You can email Justin at Content@RIMS.org.
[36:03] Thank you for your continued support and engagement on social media channels! We appreciate all your kind words. Listen every week! Stay safe!
Mentioned in this Episode:
RIMS ERM Conference 2024 will be in Boston, MA Nov. 18‒19 | Register Now
DFW RIMS 2024 Fall Conference and Spa Event | Sept 19‒20
Chicagoland Risk Forum 2024 — Presented by RIMS Chicago Chapter — Sept. 19, 2024
RIMS Western Regional — Sept 29‒Oct 1, Oregon | Registration is open!
RIMS Canada Conference 2024 — Oct. 6‒9 | Registration is open!
RIMS-Certified Risk Management Professional (RIMS-CRMP)
RIMS Strategic & Enterprise Risk Center
NEW FOR MEMBERS! RIMS Mobile App
Spencer Internship Grants — Deadline Oct. 15
The Strategic and Enterprise Risk Center
Truly Long-Term Strategic Risk Management in Focus — RIMS Q&A with Michael Zuraw (2019)
RIMS Webinars:
Leveraging Integrated Risk Management For Strategic Advantage | Sponsored by Origami Risk | Sept. 19, 2024
The Future of RMIS: Beyond Traditional Approaches | Sponsored by Archer | Sept. 26, 2024
Mastering ERM: Leveraging Internal and External Risk Factors for Strategic Advantage | Sponsored by Diligent | Oct. 3, 2024
Long-Term Property Strategies for a Resilient Future | Sponsored by Zurich | Oct. 10, 2024
From AI to the SEC: The Future of D&O Litigation and Regulatory Exposures | Sponsored by Hub International | Oct. 24, 2024
Lessons from Veterans on Strategic Risk Leadership | Presented by RIMS | Nov. 4, 2024
Risk Perception and Management: Insights for a Changing Landscape | Sponsored by Marsh | Nov. 14, 2024 RIMS.org/Webinars
Upcoming Virtual Workshops:
Applying and Integrating ERM | Sept 25‒26 and Dec 4‒5
Fundamentals of Risk Management | Oct 3‒4, 2024
Fundamentals of Insurance | Oct 9-10, 2024
See the full calendar of RIMS Virtual Workshops
Related RIMScast Episodes:
"Applying ERM Theory with Elise Farnham"
"On Risk Appetite and Tolerance" with the RIMS SERMC
"Climate Disclosures with Jana Utter"
"Scenario Planning with the RIMS SERMC"
"Recipes for Success with Wendy's CRO Bob Bowman"
"ERM's Value Proposition with Chris Mandel"
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RIMS Publications, Content, and Links:
RIMS Membership — Whether you are a new member or need to transition, be a part of the global risk management community!
RIMS-Certified Risk Management Professional (RIMS-CRMP)
RIMS-CRMP Stories — New interviews featuring DFW RIMS President Emily Casso Ford!
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About our guest:
Michael Zuraw, Senior Director of Global Enterprise Risk Management (ERM) at onsemi / ON Semiconductor
Tweetables (Edited For Social Media Use):
Uncertainty underlies every decision. An assumption may be 90% dead-on. There's a 10% probability that exactly the opposite is true and we should discuss that. That's where the risk lies. Can we make that 10% likelihood into 2%? That's what risk mitigation is. — Michael Zuraw
Now in our fourth cycle of interviews, our maturity level is back up. We have good interactions with the board and several committees within the board, as well. We have an executive risk committee that we function very well with. We're much more efficient. — Michael Zuraw
As we mature in the program, we get better at our jobs and our interviewees get better at identifying risks. — Michael Zuraw
If everyone in your company, from janitor to CEO and everyone in between, were 20% more disciplined in how they make decisions, your company would be doing quite a bit better. — Michael Zuraw
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