Inside Risk: Jeff Strege, CEC Entertainment Inc.
See how CEC's senior director of risk management and his team keep thousands of excitable kids safe while hanging out with Chuck E. Cheese.
By Eric Gilkey
Better known by its mascot, Chuck E. Cheese, CEC Entertainment has 17,000 employees in its 522 company-owned locations in almost every state. CLM Fellow Jeff Strege explains how he and the CEC team works together to keep the popular kids destination safe for everyone.
Q. Why risk management?
A. Like many my age in this industry, I got into risk management somewhat by accident. After graduating college, I took a job as a claims adjuster with Employers Insurance of Texas in Houston, then moved to Highlands Insurance for a combined seven years. Later, I took a position as claims analyst with Sysco, steadily climbing the ranks to risk manager. After a few other risk management jobs—including a stint as a producer for a Virginia-based insurance brokerage firm—I decided to move the family back to Texas in 2008 to work with CEC Entertainment.
Q. How did working in claims help you in risk management?
A. Working in a claims role is a very good foundation for a career in risk management because a claims professional sees a variety of different industries and perspectives. You see not only what can go wrong, but also what goes into managing situations that have gone wrong, and you get to experience litigation firsthand. Claims professionals also really understand insurance coverage in the lines they manage, sometimes better than underwriters. I think that broadens and enhances a person’s knowledge and understanding of insurance and how it works.
Q. What’s your overall approach to risk management?
A. Risk management is a process and, to be successful at it, you have to be naturally curious and analytical because one of the key elements to managing risk is being able to identify risks. It demands an interest and ability to analyze data and understand what the numbers are telling you. Equally important if not more so, is understanding the nature of the business you’re in and how its operations work.
I believe very strongly that successful risk managers don’t manage risks from their desks or offices; they have to get out into the field. In my world, that means visiting Chuck E. Cheese restaurants and speaking with employees, managers, and others so I can understand how their jobs are performed and what obstacles or issues they face. Once you analyze data and gain a working knowledge of operations, you’re in the best position to identify the risks that are faced in the day-to-day operations of the business and how to best address them.
Q. What’s the benefit of going out to visit a Chuck E. Cheese location?
A. Store visits provide me with a more well-rounded understanding of the risks we face and what they mean to our business. For example, when you talk about a process like delivering a pizza from the kitchen to a guest sitting in a booth, it’s one thing to talk about it in the office, but it’s a whole different experience when you see it in relation to how busy the store is, the traffic patterns, how the volume of business affects things, and how those factors can contribute to something potentially going wrong. It helps me visualize how situations play out in the real world in a way that I wouldn’t see just by reviewing spreadsheets all day in the office.
Q. Describe a typical day.
A. There really are no typical days, which is one of the things I like most about risk management. However, I’m usually dealing with safety, security, claims, and some litigation management. And, of course, I manage our insurance programs. On any given day, I tend to touch on all of those areas, whether it’s communicating with attorneys, claims adjusters, brokers, safety professionals, or, of course, my own operations team.
Q. How are claims handled?
A. We have a third party administrator that adjusts our workers’ comp claims, but we have a team who oversees the process and serves as advocates for our injured workers. They ensure that claims are properly investigated, reserved, and handled. Most incidents involving guests are self-administered in-house by a manager and four licensed adjusters; however, we refer some guest incidents to our third party administrator.
Q. Any good claims stories?
A. The claims business is fascinating; you see the good and bad in people. Throughout my career I’ve seen claims that were completely set up and false, and I’ve managed claims that resulted from processes and controls breaking down. When that happens, it’s incumbent on me in my role to make sure that we as an organization understand what went wrong and we learn from it to ensure it doesn’t happen again.