1. Mediation can save stress, time and money. 2. You can schedule a mediation at a time and place of the parties’ choosing -- no long waits for a court date. 3. Mediation is voluntary. 4. You can mediate a claim at any time, even while awaiting appeal or reconsideration. 5. You can choose your mediator. 6. You can choose the issues to resolve. 7. You will have the mediator’s undivided attention. 8. You will get as much time as needed for a thorough review of the issues. 9. Because there will be adequate time for development and resolution of the issues, multiple court appearances can be avoided. 10. The mediator does not make rulings; the mediator helps the parties come to an agreement. 11. The mediator can facilitate communication, even when the parties are hostile. 12. The parties control the outcome in mediation. 13. Mediation is private. California law is strong in protecting the confidentiality of communications made in mediation. 14. Parties can be more frank with the mediator than in litigation or direct communication with the opposing party. The mediator can filter and re-frame parties’ concerns to help them reach settlement. 15. Parties are more satisfied with a mediated result than a court ruling.

No insurance IT project can be 100% successful from the outset, but there are many ways a project can head for failure almost as soon as it starts. Without proper discipline from all team members, clear direction from leadership and effective inter- and intra-team communication, a project can derail and become unmanageable or even chaotic before anybody realizes what happened. A few simple but effective guidelines can help project managers of any experience level keep their project headed toward success. First, establishing priorities or core and auxiliary features is paramount to success. Properly balancing the customer’s wants and the project’s needs is rarely an easy task, especially considering the lenses through which business and IT view an application. Initial feature planning starts with brainstorming and adding any ideas to a master “wish list.” With time and effort, the wish list will materialize as usable features added to a functional application.  Anything on the list should be considered fair game for development, but not everything can be accomplished at once. Develop core features before tackling ancillary ones. By attempting to achieve everything too soon, you will achieve nothing.  That lesson is often forgotten. Second, having a controlled, disciplined development cycle is crucial. It is imperative to avoid the temptation to release an application that features every item on a wish list or fixes every known bug. Adding more features and improvements can quickly increase the length of a development cycle. A “big bang” approach to software development, wherein a more ambitious set of goals is attempted over a longer period, has a higher chance of failure. It is better to develop, thoroughly test and deploy one or two new features in two months than to have three or four features still in development in the same time frame. By keeping on task with more short-term goals instead of attempting a larger and more grandiose release, teams can achieve a sense of satisfaction through regular releases and easy wins. End-users will also feel with a regular release schedule that their needs are being addressed, that they are not using dead or unsupported software and that there are even better features coming in the future. Third, once a project plan has been agreed upon, assigning tasks or entire tracks of work with a clear owner will force team members to remain accountable. This requires strong leadership. Each team member -- including developers, team leads, business users and the project manager -- must have a set of defined and realistic goals within a development cycle. Having to answer for one’s actions and decisions can force more effective communication between groups and can facilitate problem-solving within the team. Without realistic and relatively static goals, efforts can seem futile, which can lead to lower team morale and productivity. As a consequence, trust erodes between team members, and problem-solving becomes fingerpointing. Because some of these points may seem obvious, they may be taken for granted. Don’t assume anything! A successful project-management strategy must include a conscious effort to prevent potentially problematic behaviors and practices while sticking to proven success factors.

What independent discovery rights do parties have in a contested workers’ compensation claim in California? The system is so complex that foundational education about discovery rights is required to improve and advocate for proper public policy and behavior by participants. This article is offered as a means to educate all parties about their discovery rights.

The law and the courts have stated that each party is entitled to a complete, accurate and documented record of all aspects of their case. This includes employment records, medical reports, accident records, claim files, etc. The right to obtain, review and prepare the record for any legal action is performed by discovery.

Discovery can be defined as processes used for obtaining information and copies of all legally relevant documents between parties or non-parties in a court proceeding as a legal requirement of the courts, before trial. The court in Fairmont Ins. Co. v. Superior Court, (2000) 22 Cal.4th 245 defined what happens if the right of discovery is not afforded parties. It states: “Without an opportunity for discovery as of right, parties would face substantial barriers to effective trial preparation, with results inimical to the overall purpose of the discovery statutes to reduce litigation costs, expedite trials, avoid surprise, and encourage settlement.”

The Federal Rules of Civil Procedure (1938) have been updated and annotated by James William Moore as well as numerous judges, lawyers and scholars and are the most referred to rules of legal procedure. Moore's Federal Practice (1997), 3rd Ed., vol. 4, pp. 1014-1016, lists what discovery is intended to accomplish: -- to give greater assistance to the parties in ascertaining the truth and in checking and preventing perjury; -- to provide an effective means of detecting and exposing false, fraudulent and sham claims and defenses; -- to make available, in a simple, convenient and inexpensive way, facts that otherwise could not be proved except with great difficulty; -- to educate the parties in advance of trial as to the real value of their claims and defenses, thereby encouraging settlements; -- to expedite litigation; -- to safeguard against surprise; -- to prevent delay; -- to simplify and narrow the issues; -- to expedite and facilitate both preparation and trial.

Thus, the scope of permissible discovery is one of reason, logic and common sense. In Glenfed Dev. Corp. v Superior Court, (1997) 53 CA 4th 1113, the court wrote that California's “pretrial discovery procedures are designed to minimize the opportunities for fabrication and forgetfulness, and to eliminate the need for guesswork about the other side's evidence, with all doubts about discoverability resolved in favor of disclosure.”

The legislature enacted California Code of Civil Procedure, also referred to as the California Civil Discovery Act (1986). §2019.010, which lists ways a party may obtain discovery: “Any party may obtain discovery by one or more of the following methods: (a) Oral and written depositions, (b) Interrogatories to a party, (c) Inspections of documents, things and places, (d) Physical and mental examinations, (e) Requests for admissions, (f) Simultaneous exchanges of expert trial witness information.

§2031 reads: “The court in which an action is pending may: -- order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged, which constitute or contain evidence relating to any of the matters within the scope of the examination permitted by subdivision (b) of Section 2016 of this code and which are in his possession, custody, or control; or -- order any party to permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying or photographing the property or any designated object or operation thereon within the scope of the examination permitted subdivision (b) of Section 2016 of this code. The order shall specify the time, place, and manner of making the inspection and taking the copies and photographs and may prescribe such terms and conditions as are just." [56 Cal.2d 370]

California Code of Civil Procedure Section 2017(a) states that “unless otherwise limited by order of the court in accordance with this article, any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence. Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action.”

In Irvington-Moore, Inc. v. Superior Court, (1993) 14 Cal.App.4th 733, the court states that “in establishing the statutory methods of obtaining discovery, the legislature intended that discovery be allowed whenever consistent with justice and public policy” for all litigation actions. It further states: “a party may demand that any other party produce and permit the party making the demand, or someone acting on the party’s behalf, to inspect and to copy a document that is in the possession, custody, or control, or control of the party on whom the demand is made.”

The same court relied on Greyhound Corp. v. Superior Court (1961), 56 Cal.2d 355, 382-383, 388 as to how statutes must be viewed, stating: “The statutes must be liberally construed in favor of discovery, and the courts must not extend the limits on discovery beyond those expressed by the legislature.

Other than to protect against possible abuse, the legislature did not differentiate between the right to one method of discovery and another, but intended the right to use each of the various vehicles of discovery to be inherently the same.

Selection of the method of discovery is made by the party seeking discovery; it cannot be dictated by the opposing party.”

The Discovery Act of 1986 codifies the liberal discovery concept providing a bona fide right for parties to conduct independent discovery in every litigated matter.

The Glenfed Dev. Corp. v. Superior Court, supra, court crystallized relevance. “In the context of discovery, evidence is 'relevant' if it might reasonably assist a party in evaluating its case, preparing for trial, or facilitating a settlement. Admissibility is not the test, and it is sufficient if the information sought might reasonably lead to other, admissible evidence.” (See also, Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1611-1612).

One of the most significant cases for discovery in the workers’ compensation arena is Patricia Ann Hardesty et al., (John D. Hardesty, Jr., deceased), v. McCord & Holdren, Inc. and Industrial Indemnity Company (1976) 41 CCC 111. The ruling is: “Each party to a workers' compensation proceeding must make available to the other party for inspection all non-privileged statements of witnesses which are in his possession, or which might come into his possession before the time of trial, since the denial of discovery of non-privileged statement would unfairly prejudice the opposing party in preparing his case and would unduly expose him to the danger of surprise at trial.”

Labor Code §5710 is the authority on California workers’ compensation for taking the deposition of applicants, physicians, experts, employers and claims adjusters. (Note: Deposition can mean either the oral taking of a statement under oath or deposing of records).

§5710 reads: “The appeals board, a workers’ compensation judge, or any party to the action or proceeding, may, in any investigation or hearing before the appeals board, cause the deposition of witnesses residing within or outside the state to be taken in the manner prescribed by law of like depositions in civil actions in the superior courts of this state under Title 4 of Part 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure.”

Case law supports the right of parties to subpoena records. This right can be found in Irvington-Moore, Inc. v. Superior Court. It states: “A party may demand that any other party produce and permit the party making the demand, or someone acting on the party’s behalf, to inspect and to copy a document that is in the possession, custody or control of the party on whom the demand is made.”

In workers’ compensation, the most common form of discovery to develop the record is obtained through documented business and medical records and witness depositions.

The right to issue a subpoena is found in California Evidence Code §1560(e), which states: “The subpoenaing party in a civil action may direct the witness to make the records available for inspection or by copying by the party’s attorney, the attorney’s representative or deposition officer as described in Section 2020.420 of the Code of Civil Procedure, at the witness’ business address under reasonable conditions during normal business hours.”

Subpoena rights are also buttressed by Workers’ Compensation Title 8 Regulation §10530: “The Workers' Compensation Appeals Board shall issue subpoenas and subpoenas duces tecum upon request in accordance with the provisions of Code of Civil Procedure sections 1985 and 1987.5 and Government Code section 68097.1.”

Workers’ Compensation Title 8 Regulation §10626 iterates: “Except as otherwise provided by law, all parties, their attorney, agents and physicians shall be entitled to examine and make copies of all or any part of physician, hospital or dispensary records that are relevant to the claims made and the issues pending in a proceeding before the Workers’ Compensation Appeals Board.”

Subpoena duces tecum means: "bring with you under penalty of law" and compels the party or non-party custodians of record to bring records that they have and to verify to the court that the documents or records have not been altered.

California Code of Civil Procedure §1985(c) states that: “The clerk, or a judge, shall issue a subpoena or subpoena duces tecum signed and sealed but otherwise in blank to a party requesting it, who shall fill it in before service.

An attorney at law who is the attorney of record in an action or proceeding, may sign and issue a subpoena to require attendance before the court in which the action or proceeding is pending or at the trial of an issue therein, or upon the taking of a deposition in an action or proceeding pending therein; the subpoena in such a case need not be sealed.

An attorney at law who is the attorney of record in an action or proceeding, may sign and issue a subpoena duces tecum to require production of the matters or things described in the subpoena.”

Title 8 Regulation §10530 provides for the WCAB issue subpoenas and subpoenas duces tecum upon request. Subpoenas for records are sent to one or multiple businesses.

California Evidence Code §1270 identifies meanings for business and evidence. “As used in this article, "a business" includes every kind of business, governmental activity, profession, occupation, calling or operation of institutions, whether carried on for profit or not.” This same code defines business record and the requirement that they are made under oath as to authenticity.

Section 1271 states: “Evidence of a writing made as a record of an act, condition or event is not made inadmissible by the hearsay rule when offered to prove the act, condition or event if: (a) The writing was made in the regular course of a business; (b) The writing was made at or near the time of the act, condition, or event; (c) The custodian or other qualified witness testifies to its identity and the mode of its preparation; and (d) The sources of information and method and time of preparation were such as to indicate its trustworthiness.”

California Evidence Code §1560(e) states: “as an alternative to the procedures described in subdivisions (b), (c), and (d), the subpoenaing party in a civil action may direct the witness to make the records available for inspection or copying by the party's attorney, the attorney's representative, or deposition officer as described in Section 2020.420 of the Code of Civil Procedure.”

California Code of Civil Procedure §1985.3(a)(4) defines deposition officer as a person who meets the qualifications specified in Section 2020.420. The qualification states: “The officer for a deposition seeking discovery only of business records for copying under this article shall be a professional photocopier registered under Chapter 20 (commencing with Section 22450) of Division 8 of the Business and Professions Code, or a person exempted from the registration requirements of that chapter under Section 22451 of the Business and Professions Code. This deposition officer shall not be financially interested in the action, or a relative or employee of any attorney of the parties.”

California Business and Professions Code §22458 states: “A professional photocopier shall be responsible at all times for maintaining the integrity and confidentiality of information obtained under the applicable codes in the transmittal or distribution of records to the authorized persons or entities” and able to swear under oath as to its authenticity, establishing the proper evidential chain of custody.

The substantial evidence rule is applied by the California Appellate Court to the Workers’ Compensation Board decision. The substantial evidence rule is a principle that a reviewing court should uphold an administrative body's ruling if it is supported by evidence on which the administrative body could reasonably base its decision. "Substantial" means that the evidence must be of ponderable legal significance. It must be reasonable in nature, credible and of solid value; it must actually be substantial proof of the essentials that the law requires in a particular case.

Citing Petrocelli v. Workmen's Comp. Appeals Bd. (1975) 45 Cal.App.3d 635, the California Appellate Court in Georgia-Pacific Corp. v. Workers' Comp. Appeals Bd., (1983) 144 Cal.App.3d 72, wrote that “the respondent board's decision to uphold the finding of the workers’ compensation judge should not be disturbed where supported by substantial evidence or fairly drawn inferences . . .” -- thereby demonstrating that Appellate Court findings can set precedent on an administrative order/finding.

A party must be able to conduct independent discovery, or the case will not be litigated based on a complete and accurate record, which is a violation of the due process of law. (U.S. Const. amend. IV and XIV).

I was wandering around my yard after dinner the other night, half-heartedly taking inventory of the garden chores I had been dodging, when I noticed some kids playing kickball across the street. There were six of them, three per team, and they were pretty good kickers, so they were doing a lot of base running. I chuckled when the tall kid standing on third base yelled, "Invisible man on third!" He then jogged to home plate to kick, while teammates stayed on first and second bases. Bases loaded, invisible man on third! I hadn't heard that proclamation for a long time, but if you have ever played kickball, stickball, baseball or softball with teams of three or fewer, you know all about the invisible man. That kickball game got me thinking about invisibility as an attribute in planning and operations and personal behavior. Invisibility is the goal of many corporate security protocols, to protect sensitive information, to preserve privacy and confidentiality and to shield intellectual property from attack or discovery. The hope is to camouflage activities by providing cover or anonymity. Sometimes, an individual hopes to act behind the scenes or otherwise conceal activities. Other times, invisibility is an incidental factor, because of negligence or inadvertence. Folks aren't paying attention, and ownership, accountability and decision rights don't get clearly established. My first encounter with a corporate version of the invisible man came decades ago while I was working as a claims supervisor for a large insurer in Massachusetts. The job was tough, largely because the supervisor was responsible for monitoring and directing a hefty and constantly shifting portfolio of claims toward timely and appropriate resolution. Theoretically, the supervisor assigned the claims to handlers who moved them through the phases -- investigation, evaluation and resolution -- but sometimes there just weren't enough available to handle all the claims. Turnover, training, vacations, hiring freezes, an increasing volume of new claims -- any one of these things could create a situation where there were too many claims and not enough claim handlers. The solution? At that particular company, the solution was Mr. X. Mr. X had a diary number and carried a large caseload of slow-moving claims reassigned from other claim handlers. Every claims supervisor had a Mr. X on staff. He was imaginary and invisible, so he wasn't able to accomplish anything on the claims, but reassigning work to Mr. X let real claims handlers take on more new claims. Mr.X was an operating imperative. Years later, I bumped into Mr. X's cousins at a third party claims administrator in New Jersey. The TPA had guaranteed its clients that claims workloads would not exceed a certain number per claim handler. As the end of the month approached, if workloads were higher than promised, the TPA claims supervisors would reassign claims to themselves or to their office managers to reduce the claim handlers' workloads to the agreed number. Of course, the supervisors and manager weren't imaginary or invisible, but they may as well have been because they did not actually work on the claims assigned to them. They were simply placeholders until after month end, at which point the claims would be reassigned to the claims handlers. Invisible men also show up -- or, rather, don't show up -- on committees. Radio and TV journalist Richard Harkness is credited with drafting this definition of a committee: "A group of the unwilling, picked from the unfit, to do the unnecessary." While I think that characterization is a bit severe, I have probably been on too many committees, so I believe it is fair to say that most committees have at least one member who fails to attend meetings and contributes little or nothing to the committee's work. That's awkward enough, but when the invisible committee member also happens to be the committee chair, it is even more awkward. I remember working on a committee in New York where the chair would schedule a meeting, then miss the meeting at the last minute because of a vague, recurring malady he described only as "man flu." The committee would meet without him, cover the agenda and provide him with the minutes, then he would schedule another meeting and at the last minute. . . ,well, you have probably lived this dream yourself. The chair took credit for the committee's work, yet he never contributed anything. I have seen the same type of incidental invisibility in large-scale technology development and implementation projects, where it is frequently difficult to determine who, if anyone, actually "owns" the project. I always ask two questions: 1) Has any one person actually been told to set direction, manage obstacles and make decisions on the project? 2) Is there a real person who knows and understands she will be held accountable if things don't work out as expected? It is usually easy to identify the project sponsor and the steering committee and the subject matter experts and the IT folks who are managing the project, but the project owner is often not visible. Why? Either project ownership responsibility was never specifically assigned or, more likely, ownership was assigned to a committee. Psychologist Will Schutz was no doubt thinking of something else when he wrote this, but he did a good job of describing the inevitable, unfortunate outcome when an owner-less or committee-owned project fails to meet expectations: "Everyone is responsible, but no one is to blame." It is even worse when the wrong person or department is identified as the owner. I think it is crazy for human resources executives to own an employee engagement project, for example, or for IT executives to own a technology development or implementation project. These are business projects, and they should be owned by the business leader who convinced the organization that he had a problem or an opportunity, and that the project was the solution. Sure, HR and IT are there to assist, to provide expertise, structure, oversight and maybe even project management, but the business person owner needs to remain visible and accountable.

We need to focus on the root causes of suicide and help people feel okay about receiving help. There is no better place to do this than in the workplace, and this week is National Suicide Prevention Week, which gives us the opportunity to spread the word. It's important to understand some of the antecedents, like depression, because this is where the cure lies and where, because of our misunderstanding and fear, we often don’t act. Here are some statistics from the American Association of Suicidology that should open everyone’s eyes:

• Nine out of 10 people who die by suicide had a diagnosable mental disorder.
• Only three out of 10 people who die by suicide received mental health services in the year before they died.
• Depression is the most prevalent mental health disorder -- 20.9 million American adults suffer from a depressive illness in any given year.
• Treatment for depression is effective 60% to 80% of the time.

A 2007 study featured in the Journal of the American Medical Association found that depressed employees, who received “enhanced care," defined as care management and optional psychotherapy, worked longer weeks and demonstrated greater job retention than other groups. This led to an annual average value of $1,800 per worker, which is estimated to be greater than the cost of “the outreach program and the roughly 10 additional mental-health specialty visits made by subjects in the treatment group.” I realize that there are a lot of statistics that might make you zone out, so let me make what I am saying perfectly clear. Educating the workforce about mental health and depression so that folks know that it is perfectly okay to seek help should be every employer’s goal. It is the right thing to do. It will also lead to higher productivity and lower safety and healthcare costs. Once people feel comfortable admitting they have a problem, they will be more likely to seek help, which leads to the next thing employers or insurers should do. They need to have some sort of behavioral health service that will do a confidential but thorough assessment so that they can facilitate a referral for the right kind of assistance for each person in need. An employee assistance program (EAP) can help in both aspects of this process; education and assessment/referral/follow up. This year, make National Suicide Prevention week the time when you kick off the process of education -- and make sure that this is the beginning, not the end, of your efforts. For assistance in doing this, visit the National Alliance for Suicide Prevention, Workplace Task Force.

Several drivers of change are compelling insurance companies to re-evaluate and modernize all aspects of their business model and operations. These drivers include new and rigorous expectations from regulators and standards, increasing demands for more relevant and useful information, improvements in analytics and the need for operational transformation. The modernization creates considerable expectations for finance, risk and actuarial functions, and potentially significant impacts to business strategy, investor education, internal controls, valuation models and the processes and systems underlying each – as well as other fundamental aspects of the insurance business. Accordingly, insurers need more sophisticated financial reporting, risk management and actuarial analysis to address complex measurement and disclosure changes, regulatory requirements and market expectations. Three key areas to look at: Regulation and reporting Changes in regulatory and reporting requirements will place greater demands on finance, risk and actuarial functions. Issues include:

• Changing global and federal regulation (e.g., Federal Insurance Office, Federal Reserve oversight)
• ComFrame, a common framework for international supervision.
• Principle-based reserving
• Own Risk and Solvency Assessment (ORSA), the Solvency II initiative that defines a set of processes for decision-making and strategic analysis
• Solvency reporting measures
• Insurance contract accounting

Information and analytics Stakeholders are demanding more information, and boards and the C-suite need new and more relevant metrics to manage their businesses. Issues include:

• Economic capital
• Embedded value
• Customer analysis and behavioral simulation
• New product and changing underwriting parameters

Operational transformation Those in charge of governance are demanding that the data they use to manage risk and make decisions be more reliable and economical. Issues include:

• Updated target operating models
• Centers of excellence
• Enterprise risk management (ERM), model risk management and governance
• New framework from the Committee of Sponsoring Organizations (COSO), a joint initiative of five private-sector organizations that provides thought leadership on ERM, internal controls and fraud deterrence
• Optimization of controls, and efficiency studies

These drivers of change, which affect every facet of the business -- from processes, systems and controls to employees and investor relations -- have significant overlaps, and insurers cannot deal with them in isolation. To meet emerging challenges and requirements, simply adding processes or making one-off, isolated changes will not work. Systems, data and modeling will have to improve, and the finance, actuarial and risk functions will need to work together more closely and effectively than they ever have before to meet new demands both individually and as a whole. Moreover, all of this change is imminent: Over the next five years, leading companies will separate themselves from their competitors by fully developing and implementing consistent data, process, technology and human resource strategies that enable them to meet these new requirements and better adapt to changing market conditions. The insurers that wind up ahead of the game will excel at creating timely, relevant and reliable management information that will provide them a strategic advantage. Legacy processes and systems will not be sufficient to address pending regulatory and reporting changes or respond to market opportunities, competitive threats, economic pressures and stakeholder expectations. Companies that do not respond effectively will struggle with sub-par operating models, higher capital costs, compliance challenges and an overall lack of competitiveness. In subsequent articles, we will take a closer look at those leaders/business units that need to modernize.  Eric Trowbridge, a senior manager, contributed to this article.

Mary Barra’s historic appointment as General Motors;  CEO was almost immediately mired by the firestorm over the Chevy Cobalt’s faulty ignition switches. To her credit, Barra has dealt well with the crisis. But preventing future tragedies only helps GM recover lost ground. Barra now needs to define a forward-looking leadership agenda. That agenda should include the biggest technological disruption that Barra will face in her tenure as CEO: driverless cars. GM is working on driverless cars but, like most automakers, is taking an incremental approach aimed at semi-autonomous cars where a human driver is always ready and able to retake control. GM executives argue that fully autonomous, i.e., driverless, cars might someday be possible and become a competitive threat but that that day is a long way off. GM, therefore, does not consider itself in a race with Google. While the imperative to beat Google is applicable to every major automaker, Barra and GM face a particularly stark moment of crisis and opportunity. Here are five reasons why Mary Barra should change gears and make beating Google (and every other contender) in driverless cars a CEO-level strategic imperative. 1. Hedge the downside. As I previously wrote, there are five scenarios that automakers should fear if Google beats them to fully autonomous cars. One scenario is that Google amasses a significant lead in differentiating intellectual property (IP). Two scenarios deal with how Google might deploy that IP -- either as a dominant supplier or to power competitive offerings. Two other scenarios examine how traditional automakers might be precluded from new markets, such as driverless mobility for the young, elderly, handicapped and other non-drivers, and from new business models, such as Uber-like driverless car services that displace private car ownership. The best way to hedge against these downside scenarios is for GM to have its own serious contender in the race to build fully autonomous cars. GM already has many of the strategic assets required for this challenge. It has a wide range of relevant expertise, both internally and at research partners like CMU. GM has also been working for years on the EN-V, a small electric vehicle concept car that now incorporates autonomous driving technology. GM’s strongest advantages over Google, of course, are the car-building capabilities that will be critical in the transition from prototypes to production vehicles. Even if a non-incremental thrust does not ultimately produce a fully autonomous car, there would be immense learning benefits. By tackling the more challenging driverless problem, GM would gain greater insights and build capabilities in software, sensors, user interface, car integration and other key component technologies that should be relevant for semi-autonomous cars, as well. GM could enhance its own IP portfolio with key technologies that are likely to shape the industry for decades. This learning would also be important in helping GM deal with potential partners and suppliers. 2. Buy an option on the upside. Ramping up efforts on driverless cars is not just about defense. It would also allow GM to go on offense -- and even potentially change the game. By accelerating the development of driverless cars, GM could put itself in a better position to take advantage of the potential business model innovation and inevitable creative destruction. Driverless cars could spark the biggest revolution in transportation since the Model T. They could revolutionize private and public transportation -- including car ownership and the nature of mobility. In the U.S. alone, more than $2 trillion flows each year through the car-related related economy, including parts, sales, financing, service, maintenance, insurance repairs, rentals and energy. The worldwide revenue stream is many times that amount. For example, how might GM’s combination of product warranty expertise and GMAC Insurance assets open up new opportunities for GM as driverless cars wreak havoc on the $200 billion U.S. auto insurance industry? What other downstream opportunities might arise for driverless car providers, such as mobility-on-demand services, location-based advertising, infotainment and so on? How might GM beat other automakers in understanding the implications of driverless cars on its complex supply, logistics and distribution networks and gain a head start in understanding the retooling implications? Buying options on the future has paid off for GM before. Take its OnStar telematics platform. GM made an aggressive decision to install OnStar across most of its fleet in the late 1990s and has since leveraged OnStar to improve product development, enhance customer loyalty and earn billions in product warranty savings and subscription revenues. OnStar is also an example of the increased profits that are available further downstream from GM’s current position. OnStar's margins are five times higher than the margins of the overall GM business. 3. Control GM’s own destiny. More and more experts agree that driverless cars are not a question of “if” but “when.” With so much at stake, GM needs greater control over its own destiny. Whether GM beats other traditional automakers in the race for semi-autonomous cars depends on the success of its own efforts. Whether it beats Google, however, is currently dependent on Google’s failure—since GM doesn’t even consider itself in the race. Given the progress that Google has made and Google’s clear ratcheting up of its investments, betting on Google’s failure is not wise. GM should worry that Google might actually succeed. To control its own destiny, GM needs to have its own entry in the race. 4. Create a rallying point for GM’s larger transformation. Investigations into the roots of the Cobalt ignition problem revealed the depth of the cultural transformation that Barra must still engineer at GM. Barra herself told investigators about the “GM nod”: "When everyone nods in agreement on a proposed plan of action but then leaves the room with no intention to follow through." Cultural change, however, is immensely difficult. Corporate edicts and slogans sound good but have no lasting effect. It is easy to imagine, for example, how poorly GM’s cultural change efforts might fare against the “GM salute” described in the Valukas report: “a crossing of the arms and pointing outward toward others, indicating that the responsibility belongs to someone else, not me.” In my experience, corporate cultures only change in the context of explicit actions and measurable goals. A mission to beat all others to develop, build and dominate the world of driverless transportation would create a forward-looking aspiration around which to rally the organization. Attacking such an audacious goal—an achievement that by historical rights should belong to GM rather than Google—would provide a crucible within which Barra could prototype and evolve new behaviors. Progress would be measurable, and success would provide a beacon for the rest of the organization. 5. Make the world a better place. Cars changed the world. The benefits of mobility and transportation to modern society are undeniable. Cars, however, are also a leading cause of death, injury, pollution and resource consumption. For example, while estimates of fatalities attributed to the Cobalt ignition switch failures range from 13 to 74, those fatalities are dwarfed by the more than 1.2 million road traffic deaths worldwide each year. What’s more, global transportation infrastructure will require many additional trillions of dollars in the coming decades. Rather than just pushing to address its own safety shortfalls or to build incremental semi-autonomous cars that have more limited secondary benefits, GM could help reimagine cars and car-related transportation. Driverless cars will be one of the biggest enablers to such a reimagination of transportation. The societal benefits could be enormous. They could save millions of lives and tens of millions of injuries. They could save billions of hours and trillions of dollars through more efficient resource utilization. But there are also unanticipated secondary effects to be considered, such as the impact on jobs, public transportation and urban sprawl. Rather than taking a back seat to these monumental changes, GM could apply its expertise to help understand and shape these changes. It could be a monumental do-well-by-doing-good effort.

* * *

While there are advocates for more aggressively pursuing driverless cars inside every major automaker, including GM, most strategic decision makers are in denial. Take a comment by Maarten Sierhuis, head of Nissan’s driverless research: "As a researcher, I want full autonomy! But the product planners maybe have another answer." This denial mirrors the rationalizations that industry leaders usually offer about disruptive technologies: Customers like the way things work now. We need to invest in the current business instead of risky new technology. New products would cannibalize our current products -- let’s make sure change is very gradual. We’ll miss our numbers if we get distracted. And so on. Like most rationalizations, these denials contain elements of truth. In GM’s case, there are very pressing issues that need its CEO’s attention. In addition to the ignition switch recall and safety issues, GM is facing challenging market issues in Europe, Russia and parts of South America. It is grappling with a sales slump for Cadillac. And it faces great opportunity but stiff competition in the fast-growing China market. GM also has a spotty track record for disruptive innovation. It invested early and heavily in factory automation and robotics, electric vehicles and fuel cells -- and failed to reap significant market benefits from those investments. Given all that, a multitude of internal voices are arguing against escalating GM’s response to Google. The only way to overcome the internal resistance that would otherwise smother a strategic driverless car initiative is for Mary Barra to make it a CEO-level imperative. That’s because the most critical success factor will be CEO attention, not money. No initiative that might so fundamentally change the core business—while also fighting for limited expertise and resources—can succeed without the strategic imperative that only the CEO can provide. Mary Barra must also anoint an internal champion with the resources at his or her disposal to make things happen. She must guard the initiative against corporate antibodies while also asking the tough questions needed to keep it focused rather than coddled. In reference to the Cobalt, Barra observed, rightly, “We will be better because of this tragic situation if we seize the opportunity.” GM will be even better if it also seizes the opportunities of driverless cars. The question is whether Barra can bring GM’s assets together into a strategic imperative that rivals the passion and pace of Google’s self-driving car effort.

There are many reasons why workers' compensation managed care is so difficult, ranging from general economic cost pressures to the regulatory complexities faced by many large employers with multi-state work locations. Issues such as the ability to direct medical care, fee schedules, dispute resolution and the use of treatment protocols and provider networks vary from state to state.

Workers' comp medical costs have continued to outpace overall medical inflation for years. Twenty years ago, the typical ratio was 60/40 indemnity costs (lost-wages benefits) to medical costs. Today, that ratio has reversed.

Furthermore, workers' comp has always been susceptible to considerable cost-shifting both by injured workers and medical providers. Many injured workers without health insurance or with limited coverage have been suspected of submitting claims under workers comp to receive 100% "first dollar" coverage with no co-pays or deductibles. This is often known as the "Monday Morning Syndrome" -- weekend injuries from recreational activities get reported first thing Monday morning as "work-related." The support for this theory is that for years it was documented that the No. 1 time of reported injuries is between 9 and 10 Monday morning. In addition, if an injury or illness is reported as work-related the employee may be entitled to lost-wage replacement benefits, which results in a double incentive.

Medical providers also historically have had an incentive to shift costs to workers' comp. The best example are HMOs financed by pre-paid capitated rates for group health benefits. Work-related injuries are not included in group health plan coverage, allowing HMOs to bill additional charges on a fee-for-service basis. My former HMO had a large sign at the registration desk that read, "Please let us know if your medical care is work-related."

I was once hired by a major defense contractor during a competitive bid process and was told that all the other consultants had recommended it run its workers' comp program through its HMOs. My response was, "That is the last thing you want to do." The risk manager had a big smile on his face.

Many people in the industry were hoping that the ACA and the goal of universal coverage would eliminate the incentive for cost-shifting in workers' comp. In theory, that may be true. In reality, the ACA may have limited impact or, worse, actually create more incentives for cost-shifting.

The ACA has no direct impact because the various federal mandates for health insurance do not apply to workers' comp laws. Unlike Clinton-era health reform efforts, the ACA did not attempt to roll workers' comp into "one big program."

The ACA may exacerbate cost-shifting if health coverage costs will rise significantly for both employers and employees, which is widely predicted. The ACA premium rating factors virtually eliminate experience rating in favor of community rating for small employers, which helps pay for the added costs and mandated benefits. This will significantly drive up costs for many employers, with estimates as high as 50% above normal yearly premium increases.

Employees are also faced with the prospect of narrower networks and increased incentive to cost-shift, including the growing trend of consumer-driven health plans with high deductibles and other out-of-pocket costs.

Medical providers under intense cost pressures under the ACA may very well continue to cost-shift to the state workers' compensation systems and "first dollar" coverage to increase revenues. I fear that the high hopes that the ACA will help eliminate cost-shifting may go the way of "if you like your current health plan you can keep it."

One prominent proponent of the ACA just predicted that 80% of employers will actually eliminate company-paid health benefits by 2018 in favor of directing employees to the state exchanges because paying the $2,000 fine under the ACA for not providing health coverage will be cheaper than providing coverage.

Workers' compensation managed care is far more complex than managed care in group health benefits for many reasons, including; 50 different state laws and jurisdictional requirements, cost-shifting, fraud and abuse, overutilization of unnecessary or even harmful health services, excessive litigation and friction costs, historical animosities between labor and management, bureaucratic state agencies and an insurance industry and claim administrators who get a grade of C+ from many industry analysts.

If employers think the answers in containing workers' comp medical costs are in Washington, D.C., or the various state capitals in which they operate, they need to think again. The answer is in the mirror. Many employers are still searching for the cheapest claims administrator and not the best. Remember that "you get what you pay for."

The same goes for the overwhelming popular use of PPO "discount arrangements." If employers think they are saving money by looking for the cheapest doctor in town they couldn't be more misguided. The treating physician plays a key role in diagnosis and treatment, helps determine causation, degree of impairment and the length of disability and return-to-work. Family physicians and other primary care providers are rarely trained in occupational medicine or workers' comp laws and requirements and are notorious for granting indiscriminate time off work.

Employers must take a much more active role and provide the best and most appropriate medical care for sick and injured workers from the moment of injury or illness and establish better real-time communications between injured workers, medical providers, work supervisors and insurance companies and claims administrators.

Unfortunately, there is no magic bullet. But there is a rule of thumb: Do not even discuss medical cost containment with outside vendors or consultants who recommend broad-based group health networks and strategies. They simply do not apply to workers' comp and will do nothing but hurt an employer's ability to address the real cost drivers and complexities of state workers' comp laws, requirements and systems.

A recent report from Towers Watson shows that the world is making steady progress toward usage-based insurance (UBI). That steady growth is poised to become explosive if insurers can move faster and deal with privacy concerns while delivering UBI via smartphone apps that consume little of the battery's charge. The report says market penetration has nearly doubled in less than a year and a half -- reaching 8.5% of U.S. drivers in July, up from 4.5% in February 2013. UBI has reached a milestone, with all 50 states now having programs available. Consumers want the discounts that they can get by having their usage quantified and verified. Consumers are more willing than ever to work with carriers that offer UBI programs -- meaning they will leave carriers that don't. An effective UBI program may prove to be a once-in-a-career opportunity for auto-insurance executives to resegment the market and claim a bigger share. The last time there was a change even approaching this magnitude was in the 1990s, when insurers discovered the importance of credit ratings in assessing how risky a driver is. It's time that we stopped measuring with a 12,000-mile-long tape measure -- that being the distance that old-school insurers assume someone drives each year -- and started measuring with a ruler. The mileage bands used to determine risk need to become so small that a single tank of gas could put a consumer into a new one -- and the consumer needs to know that in advance so she can make a fully informed decision about how much to drive.

Past wisdom in software development held that the proper sequence of events should start with perfect requirements, followed by perfect design and planning, ending with implementation. The flexibility promised by agile methodologies of software development, according to that view, is as costly as allowing for the possibility that the kitchen in a half-built house is not in the desired location. Besides, what is the meaning of software “architecture” if we allow for shifting designs and evolving features? To answer the criticisms about agile developments, one must examine the underlying concepts supporting traditional, sequential "waterfall" development:

• Perfect planning is possible;
• Change is inevitably costly;
• Architecture must result in unchangeable results

But perfect planning isn’t possible. It is a disservice to the client to require a perfect plan. In the real world, knowledge of the business is dispersed among many stakeholders; concepts suffer from varying degrees of vagueness; and the desired outcome often begins to crystallize only after the work has begun. It is therefore more cost-effective to have  technical talent that can function in an interactive environment with the stakeholder and adapt the work to an evolving plan. Change isn’t always costly. The cost of change can be minimized if enough flexibility was implemented in the first place. Planning must therefore allow for the ability to make changes. The extra initial cost reduces the risk of a higher cost being incurred later. Architecture does not equal rigidity. Proper software architecture makes use of techniques that reduce dependencies, generalize software components and anticipate changes in the design itself. To continue the half-built-house analogy: The ceiling is not resting on too many walls, and the infrastructure for the kitchen is in many places in the house. The practice of writing flat, unidirectional software, based on the theory of the “perfect plan” has resulted in legacy software that is hard to change, maintain or understand. The evolution of the software engineering discipline is in part a response to that problem. The common threads in modern software design concepts indicate that. For example, the concept of encapsulation in object-oriented languages, where the inner workings of a software entity make that entity a black box that can be replaced without having to change its context, directly serves the need for flexible architecture at the lowest level. The concept of “pure functions,” in functional languages, where a function is by definition unable to change its environment (making the function easy to “unplug” and replace), also serves the same end. Proper architecture makes use of established and proven design patterns, selects the right patterns for the task at hand and adapts them when needed based on the specifics. This increases the effectiveness of the planning stage by a) avoiding reinventing the wheel and b) greatly reducing the number of possible paths that need to be explored. It takes a certain attitude to embrace the agile approach: one that thrives on innovation, freedom and work that never stops improving.