vol. XVII no. 3

				Page 5 Page 1 2 3 4 5 APOCALYPTIC TASK Chris Duncan, outgoing Chief Risk Officer Delta Air Lines September 11 wasn't just a perfect storm for the airline industry. It was the perfect apocalypse of crisis in the airlines and in insurance, says Chris Duncan, who served as Delta Air Lines' chief risk officer for the past three years. Duncan remembers the 20-hour days he worked after the terrorist attack as absolute chaos. He can describe the time only in metaphors: as if he were in a scene from M*A*S*H, doing triage for an industry that was under attack on all fronts, or in the deep end of the pool with weights, trying to surface. The first apocalyptic challenge was replacement of the terrorism coverage that the insurance industry dropped in the days after 9/11, leaving the federal government as the only resource to fill the gap. Although the airlines are cutthroat competitors on normal workdays, Duncan says, he and his peers at other airlines pulled together in the time of crisis, partnering with the government "to reinvent aviation insurance on the fly." Next came the hurdle of a stiff federal tax on airline passengers to fund increased security, amounting to approximately $800 million in incremental costs overnight at Delta. The company's corporate communications, government relations and risk management departments launched a massive effort to educate the press, the government and the public on the impact of this tax, which he says "felt like kicking the industry when it's still in the emergency room." Then as the months after 9/11 unfolded, Duncan turned his eye to risks created by the changing work environment and its impact on Delta's people. The industry remained in a tailspin, with 100,000 people losing their jobs in one year. Delta alone laid off 15,000 employees in a year and a half, radically changed its benefit programs and struggled to reduce its cost structure in a dramatic manner. Duncan's challenge was to help management work the risk repercussions of these organizational tornados while maintaining the organization's ability to survive and thrive. The airline industry remains crippled from the fallout of 9/11. Delta is skirting bankruptcy, trying new strategies such as dramatic price cutting to pull itself back high in the sky. The way it operates today is radically different than five years ago, when only 3 percent of check-in was online. As online check-ins moved closer to the 50 percent mark, Delta has pulled people off the front counter and replaced them with technology. With that change comes a new risk: the stability of the Internet. And with that risk, continuity plans have to boot up when the technology goes down, such as the Northeast power outage last fall. On any given day, risk management is about "applying finite resources to infinite problems," according to Duncan. It also is about recognizing where his expertise begins and ends. "You don't want a CRO looking over the shoulder on something he or she knows less about than the employee in the primary role. For example, some risk areas run very deep at Delta, with specialists who do nothing but concentrate on air safety or fuel hedging. My role is support. I'm not going to know as much as the experts do about turbulence. However, when issues cut outside of their boundaries, I'm there to help." At the beginning of 2005, Duncan left Delta to become a senior vice president with Marsh Inc. to work with risk managers and CFOs on their critical risk issues, as well as pursue some entrepreneurial product development interest within Marsh. He describes the last five years as the most rewarding and draining of his life. Even though he is working with other Marsh clients now, he stays involved with Delta, saying he can't get Delta out of his system. He's staying in the risk and insurance field because, he says, " I have a genetic defect that keeps me in risk management." Despite the intensity of those few years, he would recommend risk management as a career choice. " It's not for everyone," Duncan says. " If you like working on a variety of issues, if you thrive in a lack of structure, if you're the person who runs to the fight and not away, this field is great. If you want to see aspects of everything from human resources to finance to legal, risk management is one of the best places to be." Even in an apocalypse. Previous Page | Top

Copyright © 2005 Robinson College of Business/Georgia State University.