Anthony Spacciante, Risk Financing Manager, Starbucks
With thousands of stores and millions of coffee-loving customers, the daily grind for this risk manager presents a cup running over with challenges.
By Eric Gilkey
When you have nearly 22,000 stores in 66 countries, there are no shortages of brewing problems. Find out how CLM Fellow Anthony Spacciante grinds them up and French presses them down as part of his daily work life.
Q. So you pursued risk management in college?
A. I studied at Washington State University, which has a formal risk and insurance program as part of its business school. One of the very first classes that business students take is a risk management introduction class that covers the basic principles of risk management. We also focused on how insurance companies work, how large corporations retain risk, and the principles of the “law of large numbers.” Later on in our studies, we took a field trip to Costco’s corporate facility and saw risk management techniques in practice. We then submitted papers to the company on areas that we thought they might be able to improve. It was all really interesting and got me very excited about being on the risk management side of the business. When I graduated, I was fortunate enough to be offered an internship in the risk department at Starbucks, and I have been here 16 years.
Q. How has your approach to risk management evolved over the years?
A. Part of my philosophy is that I try to remind myself and others to think about the big picture when making risk decisions. We are a very large organization, and we take many risks every day. We cannot insure or guarantee every risk, but we can do our best to mitigate them by relying on internal and external expertise and data to make smart, practical decisions for the risks we do take.
The other part of my philosophy is the importance of fostering a positive workplace environment. It’s important to surround yourself with really great people who love their jobs and have a passion for it! I think it makes for a great working environment, and we certainly have that here.
Q. Give us a glimpse into your daily life.
A. It’s all about the coordination of many parties both internally and externally to make sure that everything is running smoothly. On a day-to-day basis, I’m working with brokers, underwriters, actuaries, and legal (both internal and external). We also have a captive insurance company so I’m coordinating with the captive manager, handling our reinsurance program, and overseeing our internal risk management information system (RMIS) as well as data going back and forth between our TPA and our RMIS. So, yes, I would say it’s a real coordination of different groups both internally and externally.
Q. What are some of Starbucks’ biggest exposures?
A. From a risk management (claims) perspective, workers’ compensation is our largest exposure. That’s really driven primarily by the sheer size and number of partners that we have in the organization—it’s more than 100,000 in the U.S. alone. It’s rounded out by general liability, property, and transportation.
Our brand is obviously extremely important. We have millions of transactions every day, and customers have come to respect and trust the brand. We, as a company, need to do everything we can to maintain or even increase that trust.
Q. Can you discuss an interesting claim?
A. I worked on the claim for Superstorm Sandy, and one of the interesting projects that followed in the aftermath was trying to figure out the business interruption portion for 1,100 stores that closed at different times of the day, for different lengths of time, not to mention for different reasons. Did they close because they were trying to prevent damage? Or because they had no electricity? Or was it because our partners couldn’t get to work? Those are all critical details when it comes to adjusting a large loss.