Operational Risk Management

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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
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
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ORM Process Cycle
Missions
Lessons Learned
New Hazards
Adjust Controls
Determine Residual Risk
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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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ORM PROCESS CYCLE
Missions
Lessons Learned
New Hazards
Adjust Controls
Determine Residual Risk
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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.
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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 Matrix

• 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 Matrix Risk Assessment Matrix Risk Assessment Matrix Risk Assessment Matrix PROBABILITY PROBABILITY PROBABILITY PROBABILITY
Risk Assessment Matrix Risk Assessment Matrix Risk Assessment Matrix Risk Assessment Matrix Frequency of Occurrence Over Time Frequency of Occurrence Over Time Frequency of Occurrence Over Time Frequency of Occurrence Over Time
Risk Assessment Matrix Risk Assessment Matrix Risk Assessment Matrix Risk Assessment Matrix A Likely B Probable C May D Unlikely
I Loss of Mission Capability, Unit Readiness or Asset Death 1 1 2 3
II Significantly Degraded Mission Capability or Unit Readiness Severe Injury or Damage 1 2 3 4
III Degraded Mission Capability or Unit Readiness Minor injury or Damage 2 3 4 5
IV Little or No Impact to Mission Capability or Unit Readiness Minimal Injury or Damage. 3 4 5 5
Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible Risk Assessment Codes 1 Critical 2 Serious 3 Moderate 4 Minor 5 Negligible
SEVERITY
Effect of Hazard
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ORM PROCESS CYCLE
Missions
Lessons Learned
New Hazards
Adjust Controls
Determine Residual Risk
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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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ORM PROCESS CYCLE
Missions
Lessons Learned
New Hazards
Adjust Controls
Determine Residual Risk
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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.
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ORM PROCESS CYCLE
Missions
Lessons Learned
New Hazards
Adjust Controls
Determine Residual Risk
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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
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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

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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

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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 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)
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Time Critical Scenarios

• NIGHT UNREP
• Routine Evolution
• Time Constrained
• Supply ship committed (perceived)

• Whats 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, people
• Option B
• Breakaway and reassess hazards and controls
• Risks delay, lower than normal fuel

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Time Critical Scenarios

• RETURN FROM LEAVE
• Routine Drive of 300 miles
• End of Major Holiday Weekend
• Muster at 0730
• Getting underway in two days

• Whats 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 traffic
• Option B
• Call ship and speak to OOD
• Risks Angry CPO, miss underway briefs

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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