operational risk management - sc.edu
TRANSCRIPT
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Operational Risk Management
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ORM Definition
ORM is the process of dealing with the risks associated with
military operations, which includes: risk assessment, risk
decision making and implementation of effective risk
controls.
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Objectives
Upon completion of this lesson, you will be able to:– Define Operational Risk Management (ORM)
– Define Time-Critical Risk Management (TCRM)
– Describe the levels of ORM
– Discuss the link between the ORM 5 Step Process and TCRM
– Discuss how TCRM increases situational awareness and decreases risks
– Apply TCRM to real-life situations
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The ORM Process
• Is a decision making tool used by personnel at all levels to increase effectiveness by identifying, assessing, and managing risks
• Increases our ability to make informed decisions.
• Minimizes risk to acceptable levels.• Applies both on the job and in off-duty
activities.
“ORM must be practiced 24 hours a day, 7 days a week, 365 days a year.”
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Principles of ORM
• Accept risk when benefits outweigh the costs.
• Accept no unnecessary risk. • Anticipate and manage risk by
planning.• Make risk decisions at the right level.
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Levels of ORM
Strategic TacticalTime Available for Planning
In-Depth Deliberate Time Critical
Limited/No Timefor Planning Mission &
TaskSuccess
Controls become resources during execution
Charts / FlipsShip/Aircraft(Systems Safety)InstructionsEquipment DesignFormal Training
Team/CrewMission Execution ChecklistChange Management(Mission/Crew Change)Equipment Degradation
Operational PlanningMission BriefsCO Standing OrdersSafety Equipment
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Assess the Hazards
Assess the severity
Assess Probability
Complete Risk Assessment
ORM Process CycleIdentify the Hazards
AnalyzeMission
Determine Hazard Root Causes
ListHazards
Make Risk DecisionsIdentify Control Options
Determine Control Effects
Make Risk Decisions
Implement ControlsMake Implementation Clear
Establish Accountability
Provide Support
SuperviseMonitor
Review
Feedback
Missions
DetermineResidual Risk
Adjust Controls
New Hazards
LessonsLearned
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Identify the Hazards
A hazard is any condition with the potential to negatively impact mission accomplishment or cause injury, death, or property damage.
To identify the hazards:• Analyze the mission – Review the plans and orders describing the mission or task to ID all tasks, requirements and conditions then create a sequential or chronological list of all major events or tasks in a mission
• List the hazards – Review each event in the sequence of tasks for hazards. Involve operators and those with applicable experience. Brainstorming is useful for this preliminary hazard analysis. Ask “what if” to think about what could go wrong.
• Determine the root cause - Make a list of the causes associated with each identified hazard. The root cause is the first link in the chain of events leading to mission or task degradation.
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Assess the Hazards
Assess the severity
Assess Probability
Complete Risk Assessment
ORM PROCESS CYCLEIdentify the Hazards
AnalyzeMission
Determine Hazard Root Causes
ListHazards
Make Risk DecisionsIdentify Control Options
Determine Control Effects
Make Risk Decisions
Implement ControlsMake Implementation Clear
Establish Accountability
Provide Support
SuperviseMonitor
Review
Feedback
Missions
DetermineResidual Risk
Adjust Controls
New Hazards
LessonsLearned
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Assess the HazardsFor each hazard indentified, determine the associated degree of risk in terms of probability and severity. The result of the risk assessment is a prioritized list of hazards, which ensures that controls are first identified for the most serious threat to mission or task accomplishment.
Risk: An expression of possible loss due to a hazard in terms of severity and probability.
Severity: Determines how bad the results would be if the hazard caused a mishap. Qualitatively categorized from 1 to 4, with 1 being the most severe.
Probability: Determines how likely the hazard could cause a mishap. Qualitatively categorized from A to D, with A being the most probable.
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Severity Categories• Cat I: Death, loss of facility/asset or result in grave
damage to national interests. • Cat II: Severe injury, illness, property damage,
damage to national or service interests or degradation. • Cat III: Minor injury, illness, property damage, damage
to national or service interests or degradation. • Cat IV: Minimal threat to personnel safety or health,
property, national, service or command interests use of assets.
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Probability Criteria
• Subcategory A: A mishap likely to occur immediately or within a short period of time.
• Subcategory B: Will cause a mishap in time.
• Subcategory C: May cause a mishap in time.
• Subcategory D: Unlikely to cause a mishap.
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Risk Assessment Code MatrixThe Risk Assessment Code (RAC) Matrix is used to determine the RAC for a hazard. You must cross probability and severity to obtain this code.
SE
VE
RIT
YE
ffect
of H
azar
d
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Assess the Hazards
Assess the severity
Assess Probability
Complete Risk Assessment
ORM PROCESS CYCLEIdentify the Hazards
AnalyzeMission
Determine Hazard Root Causes
ListHazards
Make Risk DecisionsIdentify Control Options
Determine Control Effects
Make Risk Decisions
Implement ControlsMake Implementation Clear
Establish Accountability
Provide Support
SuperviseMonitor
Review
Feedback
Missions
DetermineResidual Risk
Adjust Controls
New Hazards
LessonsLearned
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Criteria for Establishing Effective Controls
• Suitability• Feasibility• Acceptability• Explicitness• Support• Standards• Training• Leadership• Individual
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Control Options
• Reject the risk• Avoid the risk• Delay an action• Transfer the risk• Compensate for
the risk
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Types of Controls
• Engineering Controls: examples include material selection or substitution
• Administrative Controls: examples include warnings, markings, placards, signs, written policies, instructions, SOPs
• Physical Controls: examples include PPE, fences, special oversight personnel
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Assess the Hazards
Assess the severity
Assess Probability
Complete Risk Assessment
ORM PROCESS CYCLEIdentify the Hazards
AnalyzeMission
Determine Hazard Root Causes
ListHazards
Make Risk DecisionsIdentify Control Options
Determine Control Effects
Make Risk Decisions
Implement ControlsMake Implementation Clear
Establish Accountability
Provide Support
SuperviseMonitor
Review
Feedback
Missions
DetermineResidual Risk
Adjust Controls
New Hazards
LessonsLearned
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Implement Controls
• Clearly communicating plan to all involved personnel
• Establishing accountability
• Guaranteeing necessary support is available
Implementing Controls Requires:
Careful documentation of each step in the RM process facilitates risk communication and the rational processes behind the RM decisions.
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Assess the Hazards
Assess the severity
Assess Probability
Complete Risk Assessment
ORM PROCESS CYCLEIdentify the Hazards
AnalyzeMission
Determine Hazard Root Causes
ListHazards
Make Risk DecisionsIdentify Control Options
Determine Control Effects
Make Risk Decisions
Implement ControlsMake Implementation Clear
Establish Accountability
Provide Support
SuperviseMonitor
Review
Feedback
Missions
DetermineResidual Risk
Adjust Controls
New Hazards
LessonsLearned
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Supervise Supervision is a key step in the ORM
process. It involves determining the effectiveness of risk controls throughout the mission or task. This involves three actions:– Monitoring the effectiveness of risk controls– Determining the need for further assessment of all or a
portion of the mission or task due to an unanticipated change– Capturing lessons learned
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Time Critical Risk Management
Red
Green
Yellow
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Introduction: What is TCRM?
• TCRM is using risk management concepts when time and resources are limited.
• Applying ORM principles at the point of, or during execution of a mission or task
• Methodology is similar but less deliberate than the five step process
• The ABCD Model– A - Assess the situation– B - Balance Resources– C - Communicate to others– D - Do and Debrief the event
Red
Green
Yellow
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Why TCRM?
• Experience is result of learning events• Leadership has a responsibility to marshal and
coordinate experience from all personnel• Inconsistent levels of team and individual
responses based on different levels of experience
• The ABCD model provides ability to match previous mission to new experience
• Provides common language in natural format
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Nature of TCRM
• Designed to assist when– Working in a dynamic environment– Monitoring a static or routine situation– Making a decision with partial information
• Develop sound, consistent habits• Consistent with continuous improvement• Requires unique set of skills• Relies on experience• Standardizes communication
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ABCD Model
•Green: indicates errors may occur, but will be caught by individual
•Yellow: indicates the potential for consequential errors have increased
•Red: indicates errors may occur that cannot be caught and become consequential to the task or mission
•The swooping arrow represents a return to good SA and mitigation of risk
• The blocks represent the multiple levels of resources
*The target is used during team communication to focus one or more individuals into an understanding of situational conditions or an individual may use it as a self-assessment tool
Red
Green
Yellow
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ABCD
The ABCD block represents the TCRM mnemonic
A – Assess the situation B – Balance Resources C – Communicate to Others D – Do and Debrief the Event
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Link Between TCRM and 5-Step Process
•Is not a replacement for the 5-step deliberate process
•Is the practical application of the 5-step process in a time-critical environment
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Assess the Situation
• First two steps of the 5-step process• Requires accurate perception of situation
in a relatively short period of time• Must maintain good SA• Reliant on individuals ability to
comprehend situation and apply appropriate, available resources quickly and effectively
• Difference between success and failure
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Balance Resources
• Tied specifically to making risk decisions (steps 3-5 of the 5-step process)
• Must consider using resources created for the mission or activity
• Thorough planning prior to event will increase availability of appropriate resources
• Examples: PPE, proper training, understanding task or mission
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Communicate to Others
• “C” reminds us, explicitly, to communicate• Maintains good SA, task loading, & crew
factors are critical components• Communication tends to become limited
under stress/time constraints• Who needs to know?• What can be done?• Who can help or assist?
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Do and Debrief the Event
• Tied to steps 4 & 5 of the 5-step process• Ensure the feedback loop is performed• Identify what worked and what did not• Ensure lessons are learned, recorded, &
disseminated• Improves performance, mitigates risks• Is essential to completing the ABCD loop
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Applying TCRM into the Planning ProcessApplying TCRM into the Planning Process
1. Situational Awareness• I know my environment
• I can see changes
2. Mission Analysis• I can assess the changes• I can see how they affect my job/mission
3. Assertiveness• I have confidence in myself, my team, and my
leadership to bring new threats to their attention
4. Communication• I need to let my teammates or others involved
know what I know
5. Leadership• My leaders accept my plan for action or know
how to act to manage new risk
6. Adaptability/Flexibility• The plan is flexible and we can adapt to
changes
7. Decision Making• We have enough information, time and a good
plan of action, or we need help
ABCD for ABCD for Decision MakingDecision MakingAAssess the mission for potential adverse consequences
BBalance the use of Resources to minimize risk
CCommunicate Risks and Intentions
DDo (and debrief to improve future performance)
Skills Process
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NIGHT UNREPNIGHT UNREP• Routine Evolution• Time Constrained• Supply ship committed (perceived)
Time Critical ScenariosTime Critical Scenarios
™
What’s Different?• Late at night start
(2300)• Winds and seas
different than forecast• Maintaining station
difficult• Keeping fuel hoses
seated very difficult
Decision Distractions• Desire to get the job
done now• Fatigue• Routine Evolution
Option A• Continue with evolution• Risks – damage to
equipment, peopleOption B• Breakaway and
reassess hazards and controls
• Risks – delay, lower than normal fuel
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™
RETURN FROM LEAVERETURN FROM LEAVE• Routine Drive of 300 miles• End of Major Holiday Weekend• Muster at 0730• Getting underway in two days
What’s Changed?• Family early PM dinner
runs late• Rear tire deflated (slow
leak from nail puncture)• Light fog forms (not
forecasted)
Decision Distractions• Never been late from
leave• New Division CPO• Made this drive many
times before
Option A• Continue with Drive• Risks – fatigue, flat tire,
heavy trafficOption B• Call ship and speak to
OOD• Risks – Angry CPO,
miss underway briefs
Time Critical ScenariosTime Critical Scenarios
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TCRM Card
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Conclusion
• Practical use of the ABCD Model by all Navy personnel will sustain a responsive capability to effectively meet personal challenges or mission contingencies now and in the future
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NROTC ORM
– Unit mission– Training syllabus– Medical reporting– Safety surveys– Physical training– Swim Program– Sail Training– Rifle/Pistol– Close Order Drill
– Marine Field Training Exercises
– Marine hikes– Orientation– Levels of ORM training in
NROTC Program – Pre-Mishap Safety Plan – Medical Reporting– TCRM Cards
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Questions & Summary