OPERATIONAL RISK MANAGEMENT

OBJECTIVES

• Establish a common ORM language

• Train all hands on ORM basics:

– 3 application levels

– 4 ORM principles

– 5 steps of ORM process

• Group Sessions - ORM Scenario Applications

WHAT IS ORM ?

A leadership tool used to accomplish the mission with the least risk.

ORM GOAL

To strive for operational

readiness & effectiveness

by managing risk

to accomplish the mission

with minimal loss.

USN & USMCSHORE/GROUND MISHAPS

108 dead

over last 5 years

USN & USMCAVIATION MISHAPS

133 dead

over last 5 years

USN & USMCRECREATIONAL MISHAPS

157 dead

over last 5 years

350 dead

over last 5 years

USN & USMCSUICIDES

? ? ?

Why?

631 dead

over last 5 years

USN & USMCPMV MISHAPS

TOP CAUSESOF DEATHS (1995-1999)

16

108

111

133

157

258

350

631

Afloat

Shore/Ground

Crime

Aviation

Recreation

Natural

Suicide

Motor Vehicles

1,846 Deaths

NAVY/MARINEAIRCRAFT LOSSES FY 95-99

TYPE AIRCRAFT # LOST

JETS 106

HELOS 37

PROPS 5

TOTAL LOST 148

ORM IN SIMPLE TERMS

ORM can be as simple as taking a few seconds to review

your current situation.

ORM IS NOT NEW776 aircraft

destroyed in1954

Angled decksAviation Safety Center

Naval Aviation Maintenance Program (NAMP), 1959

RAG concept initiatedNATOPS Program, 1961

Squadron Safety programSystem Safety Designated Aircraft

ACT

FY

22 aircraftdestroyed in

1999Rate 1.44

95806550

Air

craf

t M

ish

ap r

ate

WHAT GOT US TO THE PLATEAU?

• Tried and true principles:

–Leadership

–Accountability

–Creativity

0

1

2

3

93 94 95 96 97 98 99

Maintenanceerror

Materialmalfunction

Aircrew error

Supervisoryerror

Human error

Total mishaprate

NAVAL FLIGHT MISHAP CONTRIBUTING CAUSE FACTORS

FY

RA

TE

PE

R 1

00K

FL

T H

RS

WHAT CAN WE DO TO IMPROVE?

• Concepts that will help us break through the plateau.

–Operational Risk Management

–Human Factors Considerations

–Technology

ORM TERMS

HAZARD

A condition with potential to cause mission degradation, personal injury or death, or

property damage.

ORM TERMS

RISK

An expression of thepotential impact of a hazard

in terms ofseverity and probability.

ORM TERMS

SEVERITY

The worst credible consequence which can occur as a result

of a hazard.

SEVERITY

CATASTROPHIC

CRITICAL

MODERATE

NEGLIGIBLE

ORM TERMS

PROBABILITY

An expression of the likelihood that a hazard

will cause mission degradationor result in a mishap or loss.

PROBABILITY DEFINITIONSExample Breakdown

• LIKELY to occur very soon

• PROBABLY will occur in time

• MAY occur in time

• UNLIKELY to occur

ORM TERMS

RISK ASSESSMENT

The process of evaluatingthe associated risksof identified hazards.

ORM TERMS

CONTROL

A measure for reducing risk for an identified hazard by

lowering the probability and/or severity.

PROBABILITY

LIKELYto occur very

soon

PROBABLYwill occur in

time

MAYoccur in time

UNLIKELYto occur in

time

A B C D

Catastrophic I

Critical II

Moderate IISE

VE

RIT

Y

Neglibible V

RISK ASSESSMENT

Risk Control Desired EffectDrive probability down

Drive S

everity Do

wn

3 APPLICATION LEVELS

• Time Critical

– Little time, done on the run.

• Deliberate

– For situations that allow more planning.

• In Depth

– Long term process with extensive research and planning.

4 KEY ORMPRINCIPLES

1. Accept risks when benefits outweigh costs.

2. Accept no unnecessary risk.

3. Anticipate and manage risk by planning.

4. Make risk decisions at the right level.

5 STEP ORM PROCESS

1. Identify Hazards

2. Assess Risks

3. Make Control Decisions

4. Implement Controls

5. Supervise

CAUSES OF RISK* Change - The “Mother” of Risk

* Resource Constraints

* New Technology

* Complexity

* Stress

* Environmental Influences

* Speed or Tempo of Ops

* Societal Constraints

* High Energy Levels

* Human Nature

CULTURAL CHALLENGES

• Can do “anything, anywhere, anytime, at any cost” mentality.

• “Do more with less” mindset.

• Reluctance to say “no.”

• Making decisions based on “the way we’ve always done it.”

• Letting others worry about our mission hazards.

• Doing only what we “have to” and not what we “should do.”

ORM TOOLS

• SHARP/SARA/SQOM

• NAMP/NATOPS/SOP’S

• ACT/GCT

• HFC/HFB

• SURVEYS (SAFETY/MCAS/CSA)

• TRAINING (Standdowns, GMT, etc.)

• ORM Corner stories in magazines

ORM Website

ORM VISION: Make ORM ourway of doing business

Three Questions:

What can happen that can hurt me or my mission?

What am I going to do about it?

If I can’t … who am I going to tell?

TOP CAUSESOF DEATHS (1995-1999)

16

108

111

133

157

258

350

631

Afloat

Shore/Ground

Crime

Aviation

Recreation

Natural

Suicide

Motor Vehicles

1. Identify Hazards

3. Make Control Decisions

2. Assess Risks

4. Implement Controls

5. Supervise

“And...you gotta try not to get famous while you’re in the act.”

If there is any doubt…then there is no doubt.

Stop what you are doing

and and brief it !!!!

Any Questions???