Issue link: http://read.dmtmag.com/i/646485
w w w. v w m m e d i a . c o m M a r - A p r 2 016 | V I N E YA R D & W I N E RY M A N A G E M E N T 1 0 7 a truly consultative risk manage- ment approach, rather than merely a transactional insurance process driv- en primarily by the sale of products. The former is proactive and engaged down the time continuum; the latter resides in the moment and is reac- tive by comparison. To be truly effective, the bro- ker will deliver measurable results, using specific metrics like Total Cost of Risk (TCOR) to validate. TCOR is a process that takes into account both the indirect and direct cost drivers to create a ratio of all risk management expenses against sales. This ratio can be charted over time to illustrate the success of the organization's risk management program and the value the broker has effectively delivered to the client's bottom line. To elimi- nate the inference of bias toward insurance products, the broker may school thinking, right? Let's apply the principles to risk management. Here's a process whereby we identify threats to an organization, determine how to deal with these risk exposures, implement a strat- egy that best fits the risk appetite of the business, and monitor and modify results over time. Measure- offer a performance-based com- pensation arrangement around the TCOR concept, taking commissions out of the equation entirely. MANAGEMENT BY OBJECTIVE M a n a g e m e n t b y o b j e c t i v e ( M B O ) : t r u l y f u n d a m e n t a l , o l d + As wine sales and popularity continue to grow, enterprise- wide risk management becomes a worthy invest- ment in time and money. + An insurance broker who understands the unique needs of your business is the best option. + The broker should provide consultative risk manage- ment and offer measureable results that you can track over time. + Ideally, the risk management program will blend retention and risk mitigation for routine incidents, with insurance reserved for major issues and catastrophic protection. + Larger wineries might con- sider alternative risk financ- ing options to enhance their return on investment. + It's essential to monitor and modify your program for suc- cess. AT A GLANCE