Operational Risk Management

Operational Risk Management

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.

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 Objectives

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. The ORM Process “ORM must be practiced 24 hours a day, 7 days a week, 365 days a year.”

Accept risk when benefits outweigh the costs. Accept no unnecessary risk. Anticipate and manage risk by planning. Make risk decisions at the right level. Principles of ORM

Levels of ORM Strategic Tactical Mission & Task Success Time Available for Planning Limited/No Time for Planning In-Depth Deliberate Time Critical Controls become resources during execution Charts / Flips Ship/Aircraft (Systems Safety) Instructions Equipment Design Formal Training Team/Crew Mission Execution Checklist Change Management (Mission/Crew Change) Equipment Degradation Operational Planning Mission Briefs CO Standing Orders Safety Equipment

ORM Process Cycle Identify the Hazards Missions Determine Hazard Root Causes Analyze Mission List Hazards Lessons Learned New Hazards Supervise Monitor Assess the Hazards Review Assess the severity Make Risk Decisions Implement Controls Feedback Assess Probability Identify Control Options Adjust Controls Make Implementation Clear Determine Control Effects Complete Risk Assessment Establish Accountability Make Risk Decisions Determine Residual Risk Provide Support

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.

ORM PROCESS CYCLE Identify the Hazards Missions Determine Hazard Root Causes Analyze Mission List Hazards Lessons Learned New Hazards Supervise Monitor Assess the Hazards Review Assess the severity Make Risk Decisions Implement Controls Feedback Adjust Controls Assess Probability Identify Control Options Make Implementation Clear Determine Control Effects Complete Risk Assessment Establish Accountability Make Risk Decisions Determine Residual Risk Provide Support

Assess the Hazards For 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.

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. Severity Categories

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. Probability Criteria

The Risk Assessment Code (RAC) Matrix is used to determine the RAC for a hazard. You must cross probability and severity to obtain this code. Risk Assessment Code Matrix SEVERITY Effect of Hazard

Criteria for Establishing Effective Controls • Suitability • Feasibility • Acceptability • Explicitness • Support • Standards • Training • Leadership • Individual

Control Options • Reject the risk • Avoid the risk • Delay an action • Transfer the risk • Compensate for the risk

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 Types of Controls

Implement Controls Implementing Controls Requires: • Clearly communicating plan to all involved personnel • Establishing accountability • Guaranteeing necessary support is available Careful documentation of each step in the RM process facilitates risk communication and the rational processes behind the RM decisions.

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

Red Time Critical Risk Management Yellow Green

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 Introduction: What is TCRM? Red Yellow Green

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 Why 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 Nature of TCRM

ABCD Model Red Yellow • 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 Green

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

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

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 Assess the Situation

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 Balance Resources

“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? Communicate to Others

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 Do and Debrief the Event

Applying TCRM into the Planning Process Skills 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 Decision Making • Assess the mission for potential adverse consequences • Balance the use of Resources to minimize risk • Communicate Risks and Intentions • Do (and debrief to improve future performance)

™ Time Critical Scenarios • NIGHT UNREP • Routine Evolution • Time Constrained • Supply ship committed (perceived) • What’s Different? • Late at night start (2300) • Winds and seas different than forecast • Maintaining station difficult • Keeping fuel hoses seated very difficult • Option A • Continue with evolution • Risks – damage to equipment, people • Option B • Breakaway and reassess hazards and controls • Risks – delay, lower than normal fuel • Decision Distractions • Desire to get the job done now • Fatigue • Routine Evolution

™ Time Critical Scenarios • RETURN 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) • Option A • Continue with Drive • Risks – fatigue, flat tire, heavy traffic • Option B • Call ship and speak to OOD • Risks – Angry CPO, miss underway briefs • Decision Distractions • Never been late from leave • New Division CPO • Made this drive many times before

TCRM Card

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 Conclusion

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 NROTC ORM

Questions & Summary

Operational Risk Management