OPERATIONAL OPERATIONAL RISK MANAGEMENTRISK MANAGEMENT
Indoctrination TrainingIndoctrination Training
Indoctrination TrainingIndoctrination Training
* ORM Terms* ORM Terms* 5-Step ORM Process* 5-Step ORM Process* Causes of Risk* Causes of Risk* 4 ORM Principles* 4 ORM Principles* Benefits of ORM* Benefits of ORM* 3 Levels of ORM* 3 Levels of ORM* Time-critical ORM* Time-critical ORM
ORM TermsORM Terms
Hazard:Hazard:
A condition with the potential A condition with the potential to cause personal injury or to cause personal injury or death, property damage, or death, property damage, or
mission degradation.mission degradation.
ORM TermsORM Terms
ORM TermsORM Terms
Risk: Risk: An expression of possible loss An expression of possible loss
in terms of severity and in terms of severity and probability.probability.
ORM TermsORM Terms
Severity:Severity:
The worst credibleThe worst credibleconsequence which can occur consequence which can occur
as a result of a hazard.as a result of a hazard.
ORM TermsORM Terms
Probability:Probability:The likelihoodThe likelihood
that a hazard will result in athat a hazard will result in amishap or loss.mishap or loss.
HazardHazard RiskRiskBad Weather Bad Weather High ProbabilityHigh Probability
Flight Ops CnxFlight Ops Cnx
Flock of BirdsFlock of Birds Moderate ChanceModerate Chanceof Engine FODof Engine FOD
Walking on top Walking on top of Slippery ACof Slippery AC
Some Chance ofSome Chance ofFall Producing Fall Producing Severe InjurySevere Injury
ORM TermsORM Terms
Risk Assessment: Risk Assessment: The process of detecting hazards and The process of detecting hazards and
assessing associated risks.assessing associated risks.
ORM TermsORM Terms
Control:Control: A method for reducing A method for reducing
risk for an identified hazard by risk for an identified hazard by lowering the probability of occurrence,lowering the probability of occurrence,
decreasing potential severity, or decreasing potential severity, or both.both.
ORM TermsORM Terms
The process of dealing with risk associated The process of dealing with risk associated with military operations, which includes risk with military operations, which includes risk assessment, risk decision making, and assessment, risk decision making, and implementation of effective risk controls.implementation of effective risk controls.
Operational Risk Management:Operational Risk Management:
Risk Management ProcessRisk Management Process
1.1. Identify HazardsIdentify Hazards
2.2. Assess HazardsAssess Hazards
3.3. Make Risk DecisionsMake Risk Decisions
4.4. Implement ControlsImplement Controls
5.5. SuperviseSupervise
OperationalOperational
OperationalOperational Risk Management Risk Management
>> A Decision Making ToolA Decision Making Tool
> > Increases Ability to Make Increases Ability to Make Informed DecisionsInformed Decisions
> > Reduces Risks to Acceptable Reduces Risks to Acceptable LevelsLevels
Operational Risk ManagementOperational Risk Management
Goal:Goal:To optimize operational To optimize operational
capability and readiness by capability and readiness by managing risk to accomplish the managing risk to accomplish the
mission with minimal loss.mission with minimal loss.
Causes of RiskCauses of Risk* Change - The “Mother” of Risk* Change - The “Mother” of Risk
* Resource Constraints* Resource Constraints
* New Technology* New Technology
* Complexity* Complexity
* Stress* Stress
Causes of RiskCauses of Risk
* * Societal ConstraintsSocietal Constraints
* Environmental Influences* Environmental Influences
* Human Nature* Human Nature
* Speed/Tempo of Operation* Speed/Tempo of Operation
* High Energy Levels* High Energy Levels
(Cont.)(Cont.)
Four ORM PrinciplesFour ORM Principles
1. 1. Accept risk when benefits outweigh the Accept risk when benefits outweigh the cost.cost.
2. 2. Accept no unnecessary risk.Accept no unnecessary risk. 3. 3. Anticipate and manage risk by planning.Anticipate and manage risk by planning. 4. 4. Make risk decisions at the right level.Make risk decisions at the right level.
ORM ORM vs. vs. Non-standard ApproachNon-standard Approach
SystematicSystematic Random, Individual-DependentRandom, Individual-Dependent
ProactiveProactive ReactiveReactive
Integrates All TypesIntegrates All Typesof Risk Into Planof Risk Into Plan
Safety As After-thought OnceSafety As After-thought OncePlan is DonePlan is Done
CommonCommon Non-standard Non-standardProcess/TermsProcess/Terms
Conscious DecisionConscious Decision “Can Do” Regardless of Risk“Can Do” Regardless of RiskBased on Risk vs. BenefitBased on Risk vs. Benefit
The Benefits of ORMThe Benefits of ORM
> Reduction in MishapsReduction in Mishaps
EffectivenessEffectiveness> Improved Mission Improved Mission
OperationalOperational
Risk ManagementRisk ManagementLevels of ApplicationLevels of Application
1.1. Time-critical - On the runTime-critical - On the run consideration of the 5 Steps consideration of the 5 Steps
2. 2. Deliberate - Application of the Deliberate - Application of the
complete 5-Step Processcomplete 5-Step Process
3. 3. In-depth - Complete 5-Step In-depth - Complete 5-Step
Process with Detailed AnalysisProcess with Detailed Analysis
ORM PROCESSORM PROCESSTime-Critical ORMTime-Critical ORM
1. 1. Identify HazardsIdentify Hazards
2. 2. Assess HazardsAssess Hazards
3. 3. Make Risk DecisionsMake Risk Decisions
4. 4. Implement ControlsImplement Controls
5. 5. SuperviseSupervise
Time-critical ORM ExamplesTime-critical ORM Examples
• As changes occur during a mission/operationAs changes occur during a mission/operation
• Pre-flight briefPre-flight brief
• Maintenance shift turn-over briefMaintenance shift turn-over brief
• During execution of hazardous weather billDuring execution of hazardous weather bill
• No notice missile exerciseNo notice missile exercise
Time-critical ORM DemonstrationTime-critical ORM Demonstration
Class ExerciseClass Exercise
