July 2019

SAM Summit Series 2019—Part 4: Risk Management

Three mentors answer tough questions, posed by a group of inquiring young managers, about handling thorny issues around risk.

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jul19 summit series 01

In this edition of the SAM Summit Series—a leadership development project where industry up-and-comers learn from respected resort bigwigs—the discussion focuses on risk management. This is one of six calls held last winter.

MountainGuard’s Tim Barnhorst observed that risk management “is an enterprise-wide thing. It applies to every department, whether it’s marketing, food and beverage, or mountain ops—managing risk is important in every aspect of ski area operations.”

Our three mentors on the call were Rich Burkley, senior VP of strategy and business development at Aspen Skiing Company; Kim Locke, vice president, Lake Louise, Alberta; and Nadia Guerriero, then VP and general manager at Northstar California Resort, now VP and COO at Beaver Creek, Colo.

Dr. Natalie Ooi of Colorado State University’s graduate Ski Area Management Program provided the mentees additional projects following every call to reinforce what was discussed and allow the mentees to expand on what they learned.

Thank you to Dr. Ooi, as well as Summit Series sponsors MountainGuard and Leitner-Poma. And thank you, as always, to Paul Thallner of High Peaks Group for his expert facilitation of each call.

Some excerpts from the discussion follow. The entire transcript is available at saminfo.com/the-summit-series.

Olivia Rowan: The Summit Series kicked off last year as a platform where we connect mentors and mentees, connecting the currently leadership in the industry with the next generation of leaders.

And it's really been a program to identify future leaders, to fuel a movement that fosters relationships, discussions about building on careers in the industry. And so, we hope that you can take what you're learning in these calls and people that you've met and build on those connections and make a career in the industry.

I want to welcome our three mentors on this call, the risk management call. It's Rich Burkley, who's the senior VP of strategy and business development at Aspen Skiing Company. Kim Locke, who's vice president of Lake Louise, Alberta, and Nadia Guerriero, former vice president and general manager at Northstar California Resort, now vice president and chief operating officer at Beaver Creek Resort, Colo.

Welcome to all of you. This program could be not possible without our partners. To start, I’d like to give a special shout out to Tim Barnhorst from MountainGuard

Tim Barnhorst: Today has a special meaning to me being from the insurance side of things.

But first, I want to take time to thank the mentors, Rich, Kim, and Nadia. It's a big deal that you guys are taking the time to do this. It's an important thing that we're having happen in this industry is we see succession planning taking center stage. And certainly to the mentees, having people nominate you for this or nominating yourselves and taking that initiative.

It's really important for the ski industry as a whole. The one thing I'd say about risk management is that it's an enterprise-wide type of thing. It applies to every department, whether it’s marketing, food and beverage, or mountain ops—managing risk is important in every aspect of ski area operations. If anyone wants to talk risk management, I am always available.

Olivia: Thanks so much Tim. New this year, we want to thank Leitner Poma and Darren Cole and their support of this program and for their support of this next generation of leadership.

We cannot thank Natalie Ooi enough. Natalie is with Colorado State University SKAMP program, which offers a graduate-level certificate in ski area management. They are our deep dive partner and create the resource materials and follow up activities for the mentees.

Another great resource is, of course, our facilitator extraordinaire Paul Thallner, founder of High Peaks Group. Paul was our facilitator last year as well and he specializes in creating effective leadership and leadership training. So, with that, Paul, I'm going to hand it off to you to take us away on risk management.

Paul Thallner: Thank you so much Olivia. I would love to sort of reflect back on some words that Tim just said in his brief introduction about the succession planning and paying it forward. It's these stories of when mentors have been in the early stages of their leadership career, sharing stories about the things that helped them become effective leaders in the industry, that is the point of the of today's conversation and we'll actually kick it off there with a question related to risk management.

I'd love for each of you to sort of put yourself back in the time when you were earlier in your career. Maybe it was your first leadership experience or maybe your first time with significant responsibility in your ski area. Think back to that time and then tell us a story about when you realized or learned to identify risk or that it was a significant and serious part of your role.

Kim Locke: Well, I'm a lawyer, so with my background I’m kinda trained to be always be cognoscente of risk. And so, I think bringing that to a ski area context, it probably really hit home for me when we had an accident in a parking lot actually and it was a fairly minor injury.

It was a guest who slipped and broke his leg, and at the time it didn’t seem like it would be anything. And afterwards it developed into a lot more than we thought. The injury was a little bit more severe than originally thought and this gentleman had to be off work for quite some time.

It turned into a larger claim and because it wasn't on the mountain, we couldn't really rely on the waiver defense. This guest has not purchased a ticket, he was not a season pass holder, so he had to find a new kind of a waiver. So, we're in a position where we have to defend this claim and our investigation was perhaps not as fulsome as it would have been, had it been an on-hill accident. Simply because of the fact that it didn't really look like anything big at the time and it was in a parking lot, so people wanted to get back onto the hill, into the area where most of the risk had been identified.

So, because of the fact that we could have done a little bit more thorough of an investigation, in this particular incident, what was lacking was photographs of the surrounding area. There were a bunch of photographs where the individual had fallen, but not necessarily photographs of the surrounding area.

And what this gentleman ended up saying after the fact is that he had to cross over this snow bank that he walked over, which he ultimately tripped on. He said he had to cross over the snow bank because the surrounding area was icy and dangerous to walk on.

And so our witness statement at the time said the parking lot was in normal shape, and there weren't any big patches of ice. But we hadn't had photographs of the area, and so that ended up getting us in the end and we had to make a little bit of a settlement offer to this guy.

So I guess it hit home that you really have to become cognoscente of risk everywhere. And it's not only the very obvious risk that can be harmful to your organization. It's little things that can come back and get you that nobody would have necessarily anticipated.

Paul: That's fascinating, Kim, thank you for sharing that.

Rich Burkley: The first time I looked at a P&L and was responsible for a P&L, I was amazed at the breathtaking financial costs of workers’ comp. And when I had my first operating division, I was stunned at how many hundreds of thousands of dollars, in certain cases millions, we were spending on these cases. And this was, I’ll say, mid-'90s.

We then created a task force and started systemically working on reducing risk wherever we could. Identifying it, reducing it, and then, more importantly—and this is the hardest thing to do—creating a culture where people really were active in spotting risk and then minimizing it, or eliminating it, themselves. And over the years, we've actually managed, even to this day, our workers’ comp costs are far lower than they were 25 years ago.

Paul: I'd love to throw it out to our mentees to ask some questions, I know, Hunter, you had a good question.

Hunter Steinkamp: What do you see as a very often overlooked area for risk in your area and the industry as a whole?

Kim: I think for us, relating to my previous anecdote, sometimes an overlooked area at our ski area is the base area and inside, because everybody is so focused on minimizing risk out on the mountain. And the extent of the risk is so much greater with ski-related injuries, rather than with slip and fall, that it's only natural for people to prioritize risk reduction and risk minimization outside. But there are definitely things that need to be done inside, as well, and then also around the base area outside. So that's an easy place to overlook, but it's just as important to look at those areas, too.

Nadia Guerriero: So when I started at Northstar, I started as the director of events and conference services. I was in charge of kind of everything that we considered outside of normal business operations. And it speaks a little bit to what Kim was saying, we can get pretty focused on what goes on out on the hill and all of our skiing operations, but I was in charge of running all of our events, on-hill but also in the village. So I would say I was pretty aware of risk right away in certain areas.

If we're having an outdoor event in the summer, the risk of weather was always a thing. If we had sold tickets and things like that, we would have to have backup plans. Same things with weddings; at weddings we had to have backup plans because it was always a big risk. But one event in particular that we had one summer, we do a big beer fest and bluegrass event.

And so people buy tickets, they listen to bluegrass music and then they're drinking beer all day. So we would go through the village and the setup and make sure that any cords had cord covers over them, for speakers and things like that. Making sure that all the walking areas were safe, but we had this one woman in particular who maybe had had a little bit too much beer to drink that day, wearing shoes that were maybe a little bit harder to walk in, and she was walking into the rink area and she tripped. And I don't even think she really tripped on anything other than maybe just the ground.

But one of the things that we had overlooked was actually having medical available on site in the village. We have a medical clinic in the village, but we didn't have a medical tent at the event that year. So that was a pretty quick lesson and moving forward from then on we always had a medical tent at every event in the village, many of which happen in the summer.

So there was that, and then I think a piece of risk that goes along with some of that stuff is reputational risk, right? So the risk that can be to your reputation, if someone does get hurt, especially with social media these days, they go on and pretty quickly tell people if they had a bad time at your event, they tripped and fell and got hurt and we didn't have medical attention right then and there.

Those overlooked areas, those areas that are outside of the normal business operations. For us, it was events in the summer, we do food and wine events. We do things that are maybe not the things that we do every day, especially in the winter.

So those are the ones that we pay special extra attention to. And make sure we're covering all of our bases from a risk standpoint, for employees and guests.

Rich: I agree with Kim that parking lots, sidewalks and those overlooked areas are now consistently some of our biggest problems. We have remote ticket sales where the ticket seller has to walk. We're in a town so it's city blocks, but they're very snowy and icy, and some of them have steep hills and that has become a real challenge. We actually now issue crampon-type grippers, so that they can walk safely back and forth between locker rooms and sites—areas that you don't normally focus on.

Our avalanche control we are very tight on, we don't have any issues. Our lift maintenance and lock out tag out, we have protocols. It's the areas that we don't necessarily focus on because you don’t think there's much risk there or they present any challenges.

We also have a large number of hospitality venues, our hotels and our F&B. [Injuries at these venues] are not necessarily as high a dollar cost, but there are so many of them, and each one has to be managed and brought to conclusion and filed with the State. So you run into significant risk on relatively small, bumped heads, cuts in the kitchens, strained backs moving stuff. They add up very quickly.

And then the one that we spend the most time looking at and that we haven't really figured out how to solve yet because it is so dangerous, but we're very aware of it: snowmaking at night, especially early season and the pressure to produce snow for the teams. Especially as opening day is approaching, plus the night, plus the marginal conditions with half snow, hard dirt, half grass, a lot of ice, and then pitch black creates huge challenges. What we did several years ago is we really made an effort to retain and bring back snowmakers and not have new hires. We were finding that our new employees were getting injured at a significantly higher rate: about 200 percent more than our returning employees.

We then incentivized the teams also to work to make sure they were operating as safely as they could with the high pressures for water and air and then moving heavy equipment. And we’ve managed to, in the last five years, reduce [the number of injuries]. I think we've had one relatively minor claim in the last five years, and that is strictly the result of bringing back returning employees that are experienced with these conditions and pairing them with the new hires that we did have. We actually have reduced the number of new hires as well. And that has been extremely effective, but I can't overstate how dangerous that job is.

Paul: That's great. Thanks a lot, Rich. I'm sure there's a lot of data that goes into an analysis that goes into making those determinations. Rich, just to continue the momentum. Greg had a question that I thought would be appropriate for you to take the first crack at.

Greg Valerio: How do you go about determining what is considered an acceptable risk in the industry?

Rich: That is a great question because I deal with it all the time, and let me give you an example.

At closing day last year on Aspen Mountain, our events team asked if they could build a slip-and-slide. Now this would be at 11,200 feet, cut into snow, lined with plastic, run through water and soap, and that was going to be an end of season kind of event. I don't know if you know, slip-and-slides create the most number of paralysis neck injuries in the United States every year.

So our legal team flipped out, which is what they're supposed to do, of course. And so we went back and we looked: how does this play out? Could we manage it? And we put some things in place.

First, we designed what we believed was a the most benign course. We monitored alcohol consumption, which was heavily prevalent at this party, but we monitored the people that were actually using it. We did not do a waiver, believe it or not, we kinda used the statutory protection under Colorado's Skier Safety Act. And I managed to, I guess, sell my soul to the legal team that there would be no issues, and it was successful.

And so that was what I would consider a fairly high risk, but an incredible amount of attention was paid to it. The event went off beautifully and so the way I would look at it is: what you're paying attention to generally will move in a direction that you want. So as long as you're really monitoring it and putting an effort into it, you will have success in reducing that acceptable risk.

How about you then take it the other way when I talked about walking to a ticket office that's four blocks up the mountain, on city streets that are icy and snow packed? Is that an acceptable risk? We have accepted it right now, but I would say, no, it's not, we should be doing something different. We should be either providing transportation, we should be giving them equipment that can get them there. Or maybe even looking at moving that station. And so, where you're paying attention, I think is acceptable. And where you're not, that will catch you by surprise, is unacceptable.

Kim: Yeah, it is a great question because it's something that we deal with all the time. It is often a bit of a judgement call, and sometimes it's a moving target, too. I mean, first turn in your mind, as has been mentioned, so what can go wrong?

Really try to think about all possible worst-case scenarios, and then it's a bit of an analysis, I think. What can go wrong? What's the worst-case scenario? What's the likelihood of that happening? If it is a fairly high likelihood, obviously, you're not going to want to have the events or you're going to want to tone it down or you're going to want to modify it. But if it is a really remote possibility of a worst-case scenario happening that can put you at a very high risk, then that's where the judgement call comes in.

As for the ski industry, I think we are more risk tolerant than a lot of industries, just based on what we do and skiing being considered by many to be inherently dangerous.

So, you have to sort of also lend that eye to things. We are in a somewhat dangerous industry and it's a little bit of a judgment call in terms of how much risk you're willing to accept in any given activity or event, and then minimizing those risks to the extent that you can.

I think an analysis and putting people's heads together and brainstorming and just saying, OK, let's think this through from every possible scenario and what could go wrong. Thinking about things beforehand can really help to reduce the risk.

Nadia: I agree with both of those comments. I think a couple of the different ways I'm looking at risk is, yeah, exactly what could go wrong? Luckily in the ski industry, and I think at all of our resorts probably, we have a lot of people with a lot of experience and so we're able to sort of tap into that and get different ideas and be able to usually find someone who's done something like this before, whether it be an event or something else, and rely on that experience.

The other thing we really look at is where can we eliminate risk. And Rich mentioned this, but for us, one other thing is whenever employees get to their various posts, or their various locations where they're working for the day, they either ski a snowboard. And for us in Tahoe and especially at Northstar, we tend to get employees that don't have a lot skiing or riding experience, and especially we find this with some of our international students that come over.

So we look a lot at how do we eliminate the risk? In other words, how do we get people to their job sites without skiing or riding? And we've done this in a couple of different places, not four blocks up the city street, but having to drive through the valley so we have lift operators that need to be at Lookout Mountain or Martis Camp Express. That's challenging terrain to ski over to, or snowboard over to, and the conditions in the past several years have been challenging in Tahoe. So we took the risk off the table and we now drive them all the way around. They drive to work and back from work.

And, secondly, when we're looking at risk it’s also just that full benefit analysis. So what are the possible benefits, too, from taking the risks? Because I think that's another piece that you need to be pretty aware of, not just what could go wrong, but what could also go right, what could go well.

Paul: That's really interesting, Nadia. It sort of feels like that we're kind of coming up against this art and science of risk management, right? So there's a little bit of each required to assess risk, and Meghan has a question, I think, that would follow exactly what you were talking about Nadia.

Meghan Wilcock: How do you find the balance between managing risk and maintaining a positive guest experience?

Nadia: Well, I think first and foremost, we look at a positive guest experience as a safe experience.

A guest can't have a positive experience or a good experience if they don't feel safe and taken care of, and we're taking all of the precautions to make sure that they are safe on the hill. Again, similar to our employees, we get a lot of those entry-level guests as well. Beginners, intermediates, people coming here to learn because we don't have as challenging terrain as some of the neighboring resorts.

So I think for us, we're very focused on making sure the guests feel as though they are being taken care of, and that they are safe. One of the ways we do that is knowing our guests, and knowing the level of skier or rider that we normally see.

Particularly right now, we're looking at expanding terrain. We've got snow, we've got favorable snowmaking temps, our mountain is not 100 percent open, so we're looking at expanding terrain. And one of the tensions that we experience is our guests would like us to expand terrain and open runs, sometimes sooner than we would like to. And some of that is whether the conditions are good and we've covered all the things that we have to cover out here in Tahoe, like manzanita and rocks and sticks and things like that, as well as the marking and padding and rope lines that we need to set up.

It's a matter of communication. We try to communicate very proactively with our guests and make sure that they know a lot of the things we're doing, or something that may be perceived as a takeaway or something that upsets them that there's a good reason for it. Probably 90 percent of the time, it’s a safety reason.

Rich: So I agree, any guest that's hurt is not having a positive experience and we are fairly well protected from a terrain-based perspective, statutorily.

What we do is we focus quite a bit, though, on education. We actually have an open boundary, which means that guests can leave the ski resort, ski backcountry and then ski back in for all four of our mountains, which is fairly unusual in the industry. And we looked at that over the course of years as to whether or not that was beneficial or creating higher risk hazards than we should be accepting.

That said, then we're looking at terrain. We're probably more aggressive because of the statutory protection than we would be ordinarily, especially early season. We call it directed skiing where we use our guests—mostly locals on passes—to compact snow in certain areas, opening runs in either segments or opening the whole run by itself so that we can achieve the snow safety for us that we're looking for.

And it's a very, very fine line, I guess. And what I would say is that, if we do it, and we'd been doing it for many years, and we don't have any injuries, we consider it an acceptable level of risk. If it were the other way and we were injuring five or six people every time we do this, then I would say that we would probably stop doing it.

We watch where our real injuries to guests and to employees occur and then try and focus on that. But for the most part, we've been doing this for a long time and our practices seem to be working so that we can minimize injuries to guests.

Kim: Great comments by Rich and Nadia, and knowing your jurisdiction I think is key. So Rich mentioned that in Colorado, their statutorily protected so they can perhaps be a little bit more aggressive on terrain opening for the season than maybe some of us in other jurisdictions can be.

So, there is definitely a trade-off between risk and a positive guest experience. So, kind of building on the discussion of terrain opening, we actually were talking about this a couple of weeks ago, trying to figure out whether to open another area of the mountain or wait for another snowfall.

And we decided to open it. Of course, it was signed very well for early season conditions and areas that needed to be roped off. And we had everything in place to try to minimize the risk, but looking at the flip side, there's also risk in concentrating all your guests on a smaller area.

So we said, yeah, we might have injuries in this new terrain that we is going to open, but we’ll sign it well, we will communicate well with the guests. And then by doing that, we minimize risk on other areas of the mountain that we may have had provisions, for instance, if it's that far spread out.

So a lot of it is weighing and balancing between different risks sometimes and I think determining where the most risk lies. Just like Paul mentioned earlier in the call, it’s a bit of an art and a science. But certainly safety for everyone, guests and staff, needs to be the key driver. And when you have a safe environment, then you're gonna have a positive guest experience on the whole, I think.

Rich: We opened Highlands early last weekend. A good portion of our decision to do that was to spread skiers out. We have far less congestion with those two mountains open, that was exactly the reason why we did it.

Paul: We talked a little bit about the guest experience, and Colin has a really good question that sort of focuses the attention a bit more on the employee experience.

Colin Russell: Most employees are focused on compliance to rules, to procedures and protocols. But the best risk management comes from employees looking out for one another. How do you foster a sense of commitment to safety in your employees?

Kim: Yes, so that's a great question. And I think to have a culture of safety, you really have to do a lot of work on fostering that culture and getting employees to look out for each other.

Communication, I think Nadia mentioned before that communication is really important. And it's important also from an internal standpoint as well: safety meetings, safety committees. Talking about safety and not making it something that is taboo to talk about, but making it something that is welcome to talk about.

So, talk about near misses, talk about what could have been done. Ask around, as well. Ask where employees are having concerns and make sure that everybody really knows that it's welcome for people to bring their concerns up to their supervisors or their managers. Communication is what it's all about I think and really welcoming comments and concerns from people.

Nadia: I wouldn't be completely honest if I didn't tell you that I think about this everyday. Employee safety, keeping employees safe in the end and doing our best as a leadership team to make sure that employees leave work the same way they showed up that day is probably one of the things that keeps me up at night.

Kim reiterated communication, that's a big piece of it. We talk about it every meeting. We sort of take the approach that every meeting is actually a safety meeting. We talk about our senior leadership team meeting weekly, we talk about our managers meetings, we talk about our department meetings. And then, yes, talking about what is happening, things like that.

Kim started talking about it a little bit: if our employees see something for that risk assessment piece, they have to be willing to raise that up. But then the next step of that is we have to do something about it, right? There has to be action that's taken to either correct the problem, fix it, or rectify the unsafe situation.

One think I talk about a lot to my managers, my management team, is they first have to take care of themselves. Self-care is incredibly important, and making sure they get enough rest and food and water and sunscreen and things like that. They first take care of themselves so that they can then take care of each other and look out for each other.

I think there's a lot of different things you have to do in order to have a positive safety culture, and really an interdependent safety culture, which I think is what you're talking about, one where employees are not only looking out for themselves, but they're looking out for their fellow teammates.

Rich: Several years ago we started incentivizing teams for safety. The two big ones were patrol and ski school. We weren't allowed to penalize or reward an individual, but our legal team and HR teams felt that we could incentivize groups. And we would share in any positive savings that we had year over year on a floating five-year average, and that was very effective.

And then the second thing we did within that was we showed what happens when an employee gets injured from the employee's perspective and how negative it was to their lifestyle, their mountain culture. And so our education in our training now almost focuses 100 percent on the individual with the incentive in place so the team has an incentive. And then the individual understands that if they're injured, they're off snow, they probably have some long-term repercussions, they have to do light duty work, return to work, they have to be cleared to get back on—so all these things kind of cascade down from that. It's very difficult, probably the hardest thing in a company to create a culture of safety, but we certainly moved in that direction.

And then we look at individual tasks. Years ago when patrols were setting up the mountains, they would ski around with tower pads. I was doing the job with them one time and it was one of the hardest things to do because you're skiing, the pads are floating in the air with straps everywhere, and I realized that this was a very dangerous activity and we didn't have an incident. But I was thinking of myself: something's gonna happen here. Also, if you drop one and it starts sliding downhill, it becomes a missile.

So, I got the groups together I said, “Guys, I'm working with you and I just feel like this is horrible. Am I missing something here?” And they're like, “That's the worst thing we do.” Everyone was in concurrence, so I said, “Well, how else can we do this?” And so what we did was we got a bed cat. And now we do not ski pads anywhere, we just pile up a bed cat, drive the cat tower to tower, and eliminated that whole function.

Not only did that improve morale, it showed them that we cared about them and it really went a long way for them accepting responsibility. Something can change if we see something that is what we consider unsafe or is very difficult to do. If we mention it, management would respond and make changes.

Paul: That's really great. One thing I'll add to that, from my perspective working with organizations outside of the ski industry is that, when I did some work for British Petroleum after the Gulf of Mexico incident, they were trying to create a safety culture as well—obviously very challenging. They had a huge incentive, obviously, they just had a disaster, but what we ended up working on was creating a speak-up culture where people could actually feel safe and comfortable telling others what's going on that might not be the safest thing happening. So that's another cultural element that could be added to the mix as well.

Eric Kertzman: How have you leveraged training programs, preparation, and policy implementation to minimize the risk factors when making decisions in operations, snowmaking technology, asset development, planning, etc.?

Kim: From our perspective, training programs are super important. What we have done is we've moved to online training, and what that allows us to do is keep a very good tab on who's had what training and what training they had. And it allows us to make sure that our training is very consistent throughout, not only skiing departments but throughout other departments as well. So, I think training is so crucial and so essential.

We actually had an employee fall off of the lift. A bit of extenuating circumstances as to why that happened. That's not something that we had anticipated would ever happen. So we had to really go back and say: OK, how did this happen? How could he fall off the lift? And we looked at the training that they received and we supplemented the training in terms of either such basic things as where to lower the safety bar, where to raise the safety bar, getting into a higher level of detail than we had previously.

So, some of it is learning from experiences that you've got as well. And going back to your training programs and constantly modifying them as you need to.

Nadia: I'm sure, we would all say the same thing: training is absolutely essential. I think there's various ways to do it and different levels that are required for different job skills. So there's always that minimum required training and tracking.

I think another piece of it is, what we have found is you can't just train at the beginning of the year and then expect that to be enough throughout the rest of the status quo. So, retraining—usually after the holidays, after we've gone through the busy periods. Going back and not always waiting for something to happen, but just going back and retraining and doing refresher trainings and specific on the job training, and even basic kind of training.

So in order to drive any of our company vehicles, there's what we call a “green driver training” that people have to go through and get signed off on it. It's basically like a driver's test where you would assume if someone has a driver's license that they actually know how to drive. I would say we don't take anything for granted. We do all of our own training and we track it. We put a lot of the onus on training on our employees, as well, so that they're active in the training, they're active in tracking—it's not just our health and safety folks. But that really takes it to the point where everyone at the resort owns safety.

And that's another kind of culture piece for us, too, in terms of moving from that independent to interdependent culture where safety is not just the responsibility of the department of health or safety manager. It's my responsibility, it's everyone in my senior team's responsibility, all of my managers’ responsibility. We all own safety, so we look at training the same way.

Rich: To maximize training, we looked at all those periods of risks that we have on the mountains, and we prioritized them.

And what we found was that for new hires and people that were entering the industry, we were overwhelming them. And then for returning employees, we were boring them. So, we started saying, look, what can we do to ease that? And the first thing we did was we simplified our training significantly.

One of the fundamental things that we did was we told people to do stuff slower, which was counterintuitive. But we found that in areas where we were seeing high levels of injury, employees were sometimes rushing. And that would be, for instance, if there was a lift down, lift maintenance rushing the snowmobile to get there, or if you were late for any reason to get to a ski school check-in point, or if the patrol was trying to get them out and open by opening bell on a powder morning. And that was very effective when really thinking about what you're doing at a methodical pace versus rushing into it, and the model is simply: slow is fast. And it actually saved us time in the long run when they were able to avoid being out of service.

And we also started a program that started with the ski industry. We looked at examples of people in the industry—and this was both for lift incidents and for workers comp—and we would diagnose them in the midst of close calls that we had internally as well.

But if there was a serious incident somewhere in the industry that we're aware of—I use the example of the lift mechanic that was killed at Loveland last year. We diagnosed that very thoroughly to show our teams what could happen if you're not paying attention in that particular case. Real life examples of stuff, the types of jobs that we're doing, had become very effective.

And then the last thing we did is we rate risks. I would argue that a sunburn is less serious than a full burial in an avalanche. So we have all the different parameters, and we concentrate far more emphasis on the higher risk issues that may not occur much, but when they do occur, they're far more severe.

And we don't spend very much time on very important, but much more manageable injuries, such as hydration and smaller things like cuts from the workshops or tuning skis. We do concentrate the bulk of our training on injuries that are life-changing.

Paul: I'd love to maybe circle back to one of the original thoughts I had earlier in the conversation, which is the opportunity to share the inner workings of your brain as you think through a challenge or a risk management situation for the benefit of these mentees who are early in their leadership careers.

I’d love for you to talk a little bit about, as a leader, how do you define the relationship between risk management and the overall business strategy? What does your brain do when you have to think about those things?

Kim: Risk management, I think, is an essential component of any business strategy, because if we let risks get out of control, then we've got bigger problems.

But as has been kind of discussed a little bit on this call, sometimes you do have to expect a certain degree of risk to have an event or to make terrain opening possible or just to have normal ski operations. And so for me it's a back and forth, and it's talking to all of the team members that play a part in the decision and really getting everybody’s perspectives on things, and then weighing those and trying to balance all the factors appropriately, which can often be a very difficult task.

It is definitely part of all decisions. The trick is to figure out what the right balance is. So it's ongoing for me, and it involved a lot of communication with other team members and getting other people's perspective as well.

Risk management is not something that is easy and it doesn't have easy answers. It's something that you're always going back to day in day out and maybe modifying your original decision based on new information or new circumstances. So, it's an ongoing process for me, for sure.

Paul: Rich, would you like to give us a tour of your brain as you think about risk management strategy?

Rich: If you haven't seen workers’ comp costs, I suggest you guys look at them because you'll be blown away. And these are dollars that come right out of your bottom line. You can multiply by whatever your margin is. If you're running a 30-percent margin, they're three times as expensive as they really are because you have to bring in that much more money. We are weighing it nonstop. I'm going to focus in this case on events because that's one that is very clear to me and very real.

We host an event called the X Games and it's for professional athletes and it's invitational and we build these courses that are unskiable for 99.9 percent of the world. But for many years, we were using those as training parks for our local freestyle programs. I had a child in it, and I was looking at it and I was so uncomfortable with that terrain. And then putting kids into those jumps, 60-70 feet off the deck, and huge gaps, that we actually shut it down and we built a whole separate park out in Snowmass, different mountain. We have the luxury to do that. But we no longer hold events outside of the X Games on those features without very high-level athletes.

Another one, a big mountain competition, same thing. I found myself, years ago, rooting against my son mentally in a big mountain competition at Snowbird because the next run was going to be on a course with mandatory air, and I was cringing at it.

Fortunately, he did get eliminated. I didn't have to worry about it for real. But I started to think, if I am a parent here, and this is a competition, is that really something that we want to put our kids in? And so what we did was we created a venue that we considered as benign as it can be and still be sanctioned from the freeskiing community and we hold events on that one. We don't have mandatory air and we had very soft landings, and that is acceptable in our mind.

We used to hold an event on Aspen Mountain called the 24 Hours of Aspen, where high-level racers would go for 24 hours, as many laps as they could. And you could imagine after 13 to 15 hours of downhill racing and you're going 100 miles an hour at night, fatigued, it was just a matter of time before disaster struck. We just stopped doing that altogether. We no longer hold that event.

It was the same thing with bike speed events. You see them over in Europe where they try and set the land speed record for bikes on snow. It was such a niche business, there was no upside and there was a huge amount of downside and we don't do it anymore.

So, you're weighing those kinds of things in your mind from a business perspective, and I'd look at what is the upside. I would argue that freestyle is pretty big, The X Games are very big, so you need to have the ability to host it. Can you do it in a way that minimizes risk to your employees and to your participants?

Paul: Yeah, and you have to weigh your brand, too, right?

Rich: Absolutely.

Nadia: Thanks yeah, really good comments. I'll just try and add on a little bit.

Paul, I was going to say kind of exactly what you just said about brands. So, I think Rich was talking about inherent versus unnecessary risk and looking at if it's an unnecessary risk or if it's something that maybe doesn't have a lot of upside.

The way we look at a lot of that is from a strategy standpoint being really clear about our brand and who we are as a resort and our guests and who we're looking to attract and in what areas we want to grow. So being really clear about our brand because we used to do a lot of those events, Vans Triple Crowns, we had the Dew Tour here for a bit, and we had a Shaun White half pipe, and we had a lot of those kinds of different events and things that in some cases did not have a lot of upside financially for us. Sometimes the exposure and media value is a little bit unquantifiable. So for us it was making sure we really knew who we were as a brand and as a resort and getting really clear about that and operating accordingly.

And then I think from a strategy standpoint, I liked what Rich talked about in terms of learning from other resorts and other incidents and things that have happened across the industry. And I think that that's actually a strategy, as well, and something that we think about a lot. Anytime anything happens in the industry we also look at it and dissect it and go through it and try and talk with the people involved and things like that.

And I think that, similar to what Kim said, safety has to be part of your strategy. It's ingrained, it's intertwined, it's all part of it. I know for us we go so far as to create a safety strategic plan every year. So, we actually build strategy around safety that meshes into the rest of our resort brand strategy.

Paul: Olivia I'm going toss it back to you for a wrap up.

Olivia: Thank you so much, Paul, for your facilitating again on this call and helping us create the dialogue in an organized way.

Thanks again to our sponsors at Mountain Guard and Leitner-Poma. And to Colorado State University for their deep dive material and homework assignment. A big thank you to the mentees for participating in all these calls and of course, a big thank you to our mentors for giving us their time and sharing their sage advice, Rich Burkley, Nadia Guerriero, and Kim Locke. Thank you so much to all three of you.

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