2022 FELLOW AWARD

Baugh’s approach can help turn risk into reward

Lara Baugh hears information differently than most. Let's call that her training. And her job.

So, when John Deere announced its new autonomous 8R tractor, many cheered its arrival. Within the company it signaled a key steppingstone in the Smart Industrial journey. It was an exciting time for sure.

Lara Baugh
Lara Baugh

While Baugh shared in the pride of that newest innovation, her training – and, yes, her job – brought a second reaction.

"I sighed and said, ‘There's no one in the cab? Oh, boy.'"

Welcome to risk management, the overprotective parent of big business.

As director of Risk Management, Baugh is responsible for safeguarding the assets and earnings of the corporation by putting insurance programs in place.

Her work is embedded in every contract that John Deere has. While looking at 300-400 contract exceptions a year may sound, based on volume alone, a bit mundane Baugh will assure you it is anything but.

"Those are fascinating because we learn a lot about what the company is doing – from a software contract to a trade show to making the next widget," she said. "I'm here to help protect the company, in a behind-the-scenes sort of way. You may never use me because you haven't had a loss, but when that bad thing happens, we're at the ready."

Being at the ready is what earned Baugh the 2022 Risk Management & Insurance John Deere Fellow Award.

Risk, a four-letter word

Much of what Baugh does begins with asking questions. A lot of questions. "It often starts with how we should think about something. How we should approach it," Baugh said.

To know what questions to ask, Baugh and her team take crash courses in pretty much everything John Deere does -- from a Mannheim daycare to a Visual Services' drone and every property insurance policy in between. It's what Baugh calls "the underbelly." From there it boils down to assessing risk and aligning it to Deere's strategy. She then works to minimize words like "liability" and "exposure." And what may work in one country won't necessarily in another, the challenges of being a global company.

With so much to protect it seems like gloom would be a constant companion. "I had a previous boss who said to me once, ‘Lara, don't you ever have anything positive to say?'"

It makes sense, then, that when all you deal in is risk there would be a natural tendency to become risk adverse. Baugh believes the opposite is true.

"It's not our team's job to say ‘no.' What we do isn't about putting limitations on our business. It's about saying ‘yes.' It's about giving that safety net so that we can take on more risk, do things that push the envelope," she said.

The art of looking ahead

A common trap with insurance is you may only think of it when you need it. Baugh's job is to be ahead of those events and thoughts.

"Right now," she said, "it's about our Smart Industrial model, autonomy, data, cyber liability, ransomware, and of course global politics is a dynamic that rarely slows down."

To help regulate the speed that can build with a far-reaching customer base, Baugh had the foresight to develop and place a political risk insurance program in parts of the world that are today's political hot spots.

"I'd say of all the things we've been able to accomplish at Deere, these policies are the most significant," Baugh said. "From a risk standpoint we've done a good job protecting the company."

These examples are what separates Baugh from others with similar titles in her profession but she widens the gap thanks to her personal connections or what many call her "relationship capital." She's been at Deere for 11 years, but prior stops include several senior leadership roles within the industry, where she has cultivated relationships with some of the top leaders and CEOs of the largest global commercial insurance companies.

The dynamic, shifting nature of the work is what keeps her engaged and she turns her own positivity and enthusiasm into a call to action for those inside and outside of Deere. She'll be the first to say that risk management is simply not plain, old insurance.

"There are multiple disciplines involved. I've got to know about accounting, finance, the law, medicine, human resources, and the operations of my company. And it's all this stuff together with this funky thing that has its own language called insurance," Baugh said.

It's this swirl that makes what she does an easy sell – to both prospective employees as well as insurance companies she's working with.

"Part of my job is to sell Deere to the insurance companies so that we get the best terms and conditions. That means understanding Deere through and through. It's the same when I'm selling Deere to a potential employee. With either audience I can say Deere is a fantastic place because we're an ethical company. I know this because I see it, in all corners of what we do," she said. "I feel comfortable in the fact that we're going to do what's right and it's never going to be boring. That's quite a combination and I'd say that's a pretty neat thing."

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