ORM Operational Risks Management

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  • Aircraft structure and material
  • KEY POINTS : * Understanding the pyramid: - Left side is risk reduction. - Right side is opportunity-risk. * ORM will significantly alter the traditional distribution of effort. More impact on the right side, more emphasis on prevent (performance) rather than simply compliance. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________
  • KEY POINTS : * Understanding the pyramid: - Left side is risk reduction. - Right side is opportunity-risk. * ORM will significantly alter the traditional distribution of effort. More impact on the right side, more emphasis on prevent (performance) rather than simply compliance. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________
  • KEY POINTS : * By understanding these key ideas, you understand the basis of ORM. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • KEY POINTS : * In our discussion of step four - Make Control Decisions, we will outline the procedures for building effective risk control decisions systems in your organization. These systems resolve these various factors into a consistent routine process. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________
  • KEY POINTS : * In the late 1960’s, the USAF failed to take the risks associated with realistic air-to-air combat. As a result, the kill ratio with the NV Air Force reached nearly 1 to 1. The risks were taken when Red Flag was developed. - Result: The kill ratio quickly increased to a favorable 10 to 1 or more. ORM can assure that we never make a similar mistake. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ _______________________________________________________________
  • 2-21
  • KEY POINTS : * ORM is a systems based concept. This means that ORM users understand that operational mistakes and errors have their origin in the design of the system (man, machine, media, management) and that mission success depends on overall system effectiveness. * We will refer to this model at several points in the six step process. It is a key concept of ORM. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________
  • KEY POINTS : * This model illustrates the overall process. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • STUDENT NOTES : ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • We’ll cover system safety. Notice the similarities to ORM. It is in fact the predecessor of ORM - many of the gurus of ORM got their start in system safety. AFMC has identified it’s system safety guys as the point men for ORM Why we need it - mishaps, cost vs. benefit, If we keep doing what we’ve been doing we’ll keep getting what we’ve got. There will be some burps in the statistics but overall things won’t change much. A little how it works - again similar in many ways to ORM Where are we going? What are the obstacles in our path? Summary Very briefly - how do you use it?
  • KEY POINTS : * It is these characteristics that are key to the potential of ORM to reduce risk levels up to 90% below current levels. STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • STUDENT NOTES: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • Notes:__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • Notes:__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • 46

Transcript

  • 1. FliGhT saFeTy coUrse WelcomeOperational Risk Management by Tariq minhas For Training Purpose Only 1
  • 2. operaTional risk manaGemenTOVERVIEW• What is ORM - The Essentials• Why ORM?• The Integration Imperative• ORM Leadership Opportunity• ORM Applied For Training Purpose Only 2
  • 3. operaTional risk manaGemenTWhat is Risk Management?Risk Management is a decision making process aimedat reducing the number of losses of people,equipment and material due to accidents.It is a pro-active approach to accident reductionwhich has been proven on the battlefield as well as inprivate sector companies.Risk management applies to war, an emergency andto peace time operations For Training Purpose Only 3
  • 4. operaTional risk manaGemenTWhat is Operational Risk Management?The risk formula : The risk formula attempts to capturethe various components which influence the amountof risk which a hazard may produce for a community orpopulation. For Training Purpose Only 4
  • 5. operaTional risk manaGemenTRisk :The probability and severity of accident or loss fromexposure to various hazards, including injury to peopleand loss of resources.Risk = the possibility of loss, injury, death or otherconsequenceHazard = a destructive phenomenon or eventExposure = duration and/or extent of a hazardVulnerability = susceptibility to damage or harm by ahazard Manageability = the capacity to respond to Needscreated by a Disaster For Training Purpose Only 5
  • 6. operaTional risk manaGemenTWhat is Operational Risk Management?Operational Risk Management (ORM)The process of detecting, assessing, and controlling riskassociated with organizational operations.It is a logic-based, common sense approach to makingcalculated decisions on the various factors associatedwith any kind of activity. For Training Purpose Only 6
  • 7. operaTional risk manaGemenTWhat is Operational Risk Management?These factors include: human(s), machine(s),environment, management, and mission. Becauserisk is inherit in CAP missions and activities, CAPofficially adopted the six-step ORM process in May,1997 as its method for evaluating the level of risk;identifying ways to control, mitigate, or eliminaterisk; and making decisions on whether and how toproceed with the activity. For Training Purpose Only 7
  • 8. Why Do DisasTers happen?Disaster: A disaster is a natural or man-made (or technological) hazard resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the environment. A disaster can be defined as any tragic event resulting from events such as earthquakes, floods, catastrophic accidents, fires, or explosions. It is a phenomenon that can cause damage to life and property and destroy the economic, social and cultural life of people. For Training Purpose Only 8
  • 9. Why Do DisasTers happen?• Disaster: The word disaster implies a sudden irresistible and unforeseen event. Unexpected interruption of critical infrastructure induced by nature, humans, or technology failure.• A disaster could result in a major illness, death, a substantial economic or social misfortune.• At the community level, it could be a flood, a fire, a terrorism act, a collapse of buildings in an earthquake, the destruction of livelihoods, an outbreak or displacement through conflict. For Training Purpose Only 9
  • 10. Why Do DisasTers happen?• Disaster Risk Factors Factors that alone or with the combination of other factors can effect to achieve safety 10 Basic factors to be considered;1. Design and Construction Flaws2. Deferred Maintenance3.Economic Pressure4.Schedule limitations For Training Purpose Only 10
  • 11. Why Do DisasTers happen?• Disaster Risk Factors (continued--)5.Inadequate Training6.Not Following Procedures7.Lack of Planning and Preparedness8.Communication Failure9. Arrogance10.Stifling Political Agendas For Training Purpose Only 11
  • 12. Why Do DisasTers happen? For Training Purpose Only 12
  • 13. Why Do DisasTers happen?• Disaster Recovery: According to ReaRs home page, disaster recovery is “the process by which a business function is restored to the normal, steady state after a disaster.” For Training Purpose Only 13
  • 14. Why Do DisasTers happen? Classifying Disasters; Disasters come in many different forms mainly can be divided in to three groups;1. Man Made Accidents2. Terrorist Act(Attacks)3. Natural disasters For Training Purpose Only 14
  • 15. Why Do DisasTers happen? Classifying Disasters; Disasters come in many different forms mainly can be divided in to three groups;1. Man Made Accidents2. Terrorist Act(Attacks)3. Natural disasters For Training Purpose Only 15
  • 16. Why Do DisasTers happen? Classifying Disasters;1. Man Made Accidents• Disasters directly caused by people• Conflict• Industrial events: explosions, hazardous• materials and pollution• Transportation events For Training Purpose Only 16
  • 17. Why Do DisasTers happen? Classifying Disasters;2.Terrorist Act(Attacks)• Terrorist groups• Designated terrorist organizations• Charities accused of ties to terrorism• State terrorism• State-sponsored terrorism By state: Israel , Russia, India, United States• Organization Financing, Fronting, Training camp, Leaderless resistance• Fighting terrorism For Training Purpose Only 17
  • 18. Why Do DisasTers happen? Classifying Disasters;3.Natural disasters• Tropical storms (hurricanes, cyclones)• Floods• Droughts• Extreme hot or cold• Volcanoes• Earthquakes• Landslides• Tsunamis For Training Purpose Only 18
  • 19. WHY DO DISASTERS HAPPEN? For Training Purpose Only 19
  • 20. WHY DO DISASTERS HAPPEN?• Disaster Recover Plan: A strategy to recover from a disaster with minimum impact on infrastructure For Training Purpose Only 20
  • 21. OPERATIONAl RISk MANAgEMENT Why ORM?• It is impossible to completely reduce all risk.• We must know to control hazards in order to decrease the amount of risk that we are exposed to.• To ensure necessary risks are taken ORM:• Is an important tool for training realism• Provides potential to expand capabilities• Assures necessary risk taking to enhance superiority• Natural evolution from traditional risk management• Systematic decision-making tool that balances risk cost & benefits For Training Purpose Only 21
  • 22. OPERATIONAl RISk MANAgEMENTOBJECTIVE of the ORM process:Protecting people, equipment and other resources,while making the most effective use of them.Preventing accidents, and in turn reducing losses, isan important aspect of meeting this objective.In turn, by minimizing the risk of injury and loss, weultimately reduce costs and stay on schedule. For Training Purpose Only 22
  • 23. OPERATIONAl RISk MANAgEMENTOBJECTIVE AND GOALS MAXIMUM CAPABILITY PROTECT PERSONNEL & RESOURCES PREVENT OR ADVANCE OR OPTIMIZE MITIGATE LOSSES GAIN EVALUATE AND MINIMIZE EVALUATE AND MAXIMIZE RISKS GAIN IDENTIFY, CONTROL, AND IDENTIFY, CONTROL AND DOCUMENT HAZARDS DOCUMENT OPPORTUNITIES For Training Purpose Only 23
  • 24. OPERATIONAl RISk MANAgEMENT 4 KEY ORM PRINCIPLES1.Accept no unnecessary risks.2.Make risk decisions at the appropriate level.2.Accept risks when benefits outweigh costs.3.Integrate ORM into doctrine and planning at all levels. For Training Purpose Only 24
  • 25. OPERATIONAl RISk MANAgEMENT Accept No Unnecessary Risks. 1BUT.... NOBODY TAKES “UNNECESSARY” RISKS?If all the hazards that could have been detected havenot been detected then unnecessary risks are beingaccepted.The single greatest advantage of ORM over traditionalrisk management is the consistent detection of 50%+.more hazards For Training Purpose Only 25
  • 26. OPERATIONAl RISk MANAgEMENT2. Make Risk Decisions at the Appropriate Level Factors below become basis of a decision- making system to guide leaders;•Who will answer in the event of a mishap?•Who is the senior person at the scene?•Who possesses best insight into the full benefits and costs of arisk?•Who has the resources to mitigate the risk?•What level makes the most operational sense?•What level makes these types of decisions in other activities?•Who will have to make this decision in combat operations? For Training Purpose Only 26
  • 27. OPERATIONAl RISk MANAgEMENT.Accept Risks When Benefits Outweigh Costs. 3WHAT HAPPENS WHEN AN ORGANIZATION STOPS TAKINGRISKSMERIUM-WEBSTER: “BUREAUCRACY: A system ofadministration characterized by lack of initiative and flexibility,by indifference to human needs or public opinion, and by atendency to defer decisions to superiors or to impede action.”with red tapeA BOLD, RISK-TAKING ORGANIZATION IS ALWAYSMAINTAINING. A CHALLENGE WHEN YOUR UNIT IS NOT ON A MISSION.ORM HELPS For Training Purpose Only 27
  • 28. OPERATIONAl RISk MANAgEMENT4.Integrate ORM Into Doctrine and Planning At All Levels. This is the one we Loss Control Operational !!want Staff Injects Leaders Add- On Operational Process Loss Control Operational Operational Occurs Process Process Within The Process For Training Purpose Only 28
  • 29. OPERATIONAl RISk MANAgEMENT WHAT IS AN “OPERATIONAL PROCESS”?Operational Securing Building Maintaining SupplyingPlanning and all their sub-processes For Training Purpose Only 29
  • 30. OPERATIONAl RISk MANAgEMENTORM IS BASED ON SYSTEMS MANAGEMENT CONCEPTS 5M Model Management Mission Machine Man Media For Training Purpose Only 30
  • 31. OPERATIONAl RISk MANAgEMENT THE ORM 6-STEP PROCESS Supervise . 6 Identify . 1 and Review the Hazards Risk Control . 5 Assess . 2 Implement the Risks Make . 4 Analyze . 3 Control Risk Control Decisions Measures For Training Purpose Only 31
  • 32. OPERATIONAl RISk MANAgEMENTStep 1 - Identify the HazardProcess: Emphasize hazard ID tools. Adds severity andearly detection.Output: Significant (50%+) improvement in thedetection of hazards. For Training Purpose Only 32
  • 33. OPERATIONAl RISk MANAgEMENT 7 - Primary Hazard ID ToolsBROAD RANGE OF APPLICATION AT ANY LEVEL• Operations Analysis/Flow Diagram• Preliminary Hazard Analysis• What If• Scenario• Logic Diagrams• Change Analysis• Cause and Effect For Training Purpose Only 33
  • 34. OPERATIONAl RISk MANAgEMENTSpecialized and Advanced Hazard ID Tools• Specialized tools accomplish specific ORM objectives. Map analysis, interface analysis, mission protection tools, training realism, opportunity assessment• Advanced tools are used by specialists and professionals to add depth to ORM applications For Training Purpose Only 34
  • 35. OPERATIONAl RISk MANAgEMENT EXAMPLE: THE DRIVE TO WORKWHAT IF ANALYSIS.What if the car catches fire.What if a carjack is attempted.What if I have to take an unknown detour.What if I run out of gas.What if another car rear ends me For Training Purpose Only 35
  • 36. OPERATIONAl RISk MANAgEMENTStep 2 - Assess the RiskProcess: All hazards evaluated for total impact onmission or activity. Root causes determined and risk(levels assigned (EH, H, M, LOutput: Personnel throughout the organization knowthe priority risk issues of the command and of their.function For Training Purpose Only 36
  • 37. OperatiOnal risk ManageMentTHE ASSESSMENT TOOLS ADD OBJECTIVITY TOTHE EVALUATION OF RISK• Risk assessment matrix: Requires specific evaluations of severity, probability, and when necessary, exposure• Totem pole: Induces the prioritization of risk issues across functions and across the organization For Training Purpose Only 37
  • 38. OperatiOnal risk ManageMent THE RISK ASSESSMENT MATRIX KEY TOOL FOR RISK ASSESSMENT Probability Frequent Likely Occasional Seldom Unlikely A B C D E S Catastrophic I Extremely E V Critical E II High High R I Moderate III Mediu T m Y Negligible IV Low Risk Levels For Training Purpose Only 38
  • 39. OperatiOnal risk ManageMent EXAMPLE:THE DRIVE TO WORKType of Risk Risk Level.What if the car catches fire MED.What if a carjack is attempted HIGH.What if I have to take an unknown detour LOWWhat if I run out of gas. MED.What if another car rear ends me MED For Training Purpose Only 39
  • 40. OperatiOnal risk ManageMentStep 3 - Analyze Risk Control MeasuresProcess: Comprehensive risk control options aredeveloped for risks based on a worst-first basis.Output: A full range of cost effective, missionsupportive, risk controls for the consideration of thedecision maker. For Training Purpose Only 40
  • 41. OperatiOnal risk ManageMent The Risk Control Option Tools Add Scope & Depth• Basic or “macro” risk control options: Reject, Avoid, Delay, Transfer, Spread, Accept, Compensate, Reduce• Risk control options matrix: 46 specific “reduce- focused” control options - applicable at up to four levels in the organization For Training Purpose Only 41
  • 42. OperatiOnal risk ManageMent EXAMPLE: THE DRIVE TO WORKWhat if the car catches fireMEDIUM:Macro optionsTransfer - InsuranceReduce (use Control Options Matrix) - Engineer gas tank Drive defensively Focused maintenance Emergency response plan & equipment For Training Purpose Only 42
  • 43. OperatiOnal risk ManageMentStep 4 - Make Control DecisionsProcess: A decision-making system gets risk decisionsto the right person, at the right time, with the rightsupport.Output: Personnel know their decision-makingauthority and limitations and take necessary risks. For Training Purpose Only 43
  • 44. OperatiOnal risk ManageMent ORM Uses Proven Decision-making Tools• Decision-making systems get the decision to the right person, at the right time, with the right support.• Basic cost benefit and return on investment analysis assure maximum benefit for the risk control $.• Decision-making matrices and other modern decision-making tools improve decision quality.• The leader question list induces better staff inputs. For Training Purpose Only 44
  • 45. OperatiOnal risk ManageMent ESTABLISHING A DECISION MAKING GUIDELINEEXAMPLERISK LEVEL DECISION LEVELExtremely High Wing Commander or specifically authorized designee(Top level M)High Group Commander or specifically authorized designeeMedium Team leader, or senior leader on the sceneLow Any person in a leadership position For Training Purpose Only 45
  • 46. OperatiOnal risk ManageMent EXAMPLE:THE DRIVE TO WORKWhat if the car catches fireMEDIUM(Who decides: Vehicle owner(sControl: Emergency response plan & equipment: Decision Cost of control Cost of loss Fire extinguisher $15Deductible - $500?Rate increaseCar down-timeRepair/Replacement hassle For Training Purpose Only 46
  • 47. OperatiOnal risk ManageMentStep 5 - Risk ControlImplementationProcess: Leaders lead, operators are involved, allare accountable.Output: ORM initiatives always have positivemission impact. For Training Purpose Only 47
  • 48. OperatiOnal risk ManageMentORM Implementation Tools & Guidelines HelpControls Click with Operators• The involvement continuum guides the high degree of operator input to ORM actions• The leader involvement actions list and the leader opportunity job aid help assure effective leader influence• The motivation model makes application of modern behavior management techniques easier For Training Purpose Only 48
  • 49. OperatiOnal risk ManageMent EXAMPLE:THE DRIVE TO WORK What if the car catches fire MEDIUM •Transfer - Insurance Reduce - OPR: Dad• Engineer gas tank OPR: Ford• Drive defensively OPR: Driver• Focused maintenance OPR: Dad• Emergency response plan & equipment OPR: Team Mom & Dad For Training Purpose Only 49
  • 50. OperatiOnal risk ManageMentStep 6 - Supervise and ReviewProcess: Progress measured through increased missioneffectiveness, mishap results and direct indicators ofrisk.Output: ORM performance status determined realtime. For Training Purpose Only 50
  • 51. OperatiOnal risk ManageMentReview and Feedback Procedures Measure &Leverage ORM Results• Eliminate invalid statistical uses of mishap rates and numbers• Refocus measurement on direct measures of risk (critical behaviors, knowledge, conditions, etc.)• Radically improve the effectiveness of feedback systems through modern data and communications systems For Training Purpose Only 51
  • 52. OperatiOnal risk ManageMent USING THE 6-STEP PROCESS -THE RISK MANAGEMENT CONTINUUM PLANNING OPERATIONS AFTER-ACTIONDeliberate ORM Largely Time-critical Assess indicatorsDetailed Hazard ID Change Analysis Deliberate ORMIntegration Real Time Integration Highly Decentralized Feedback to Planning We try to get But continue most ORM done the process here here and here For Training Purpose Only 52
  • 53. OperatiOnal risk ManageMent USING THE 6-STEP PROCESS LEVELS OF EFFORT TIME CRITICAL DELIBERATE STRATEGICLittle Lot ofTime TimeResources ResourcesRisk Risk SELECTED PRIMARY SPECIALIZED ADVANCED PRIMARY For Training Purpose Only 53
  • 54. OperatiOnal risk ManageMent Integrating the ORM Process Overview• Why integration is critical?• 12 Strategies for ORM integration.• The importance of pace. For Training Purpose Only 54
  • 55. OperatiOnal risk ManageMent WHY INTEGRATION IS CRITICAL?Integration:• Forces balancing of loss control and other mission needs• Captures more of the knowledge and experience of large numbers of operators• Reduces the number and diversity of references needed to do the job right• Eliminates redundancy and gaps between loss control functions• Strengthens accountability• Reduces costs and workloads (in plans, materiel development cycles, etc.) For Training Purpose Only 55
  • 56. OperatiOnal risk ManageMent THE TWELVE STRATEGIES FOR PROGRAM INTEGRATION1. Accountability 7. Employee Activities2. Teaming 8. Process Integration3. Partnership 9. Direct Change4. Integrate in Training 10. Gain a Champion5. Risk Decision Points 11. Integrate in Strategic6. Organization & Planning Policy Structure 12. Integrate into Measurement For Training Purpose Only 56
  • 57. OperatiOnal risk ManageMent THE IMPORTANCE OF PACE• Don’t use the shotgun• Don’t get out in front of the organization - too far• Don’t “inspect-in” ORM• Do focus on “targets”• Do expect crawl, walk, run• Patience, patience, patience For Training Purpose Only 57
  • 58. OperatiOnal risk ManageMent ORM MATURATION • Vision • Organization Approach • Background • Strategy For Training Purpose Only 58
  • 59. OperatiOnal risk ManageMentVISIONMacro:Every Leader, Member, & Employee Manages Risk in All They Do... On- & Off-DutyMicro:On-Duty - Every Organization Manages Normal Operational Risk Profile- Unique Operations Identified & AssessedOff-Duty - Every Individual Applies Risk ManagementProcess to Activities. For Training Purpose Only 59
  • 60. OperatiOnal risk ManageMentCAP APPROACH :‘CAP’ Collect Data, Analyze, Prevent. • Top-Down Approach • Strong Senior Leader Backing • Decentralized Implementation • Moderate Implementation Tempo • Safety Lead Role for Cross-Functional Implementation For Training Purpose Only 60
  • 61. OperatiOnal risk ManageMentORM STRATEGY Miscellaneous Initiatives• Automated “Tools”• Doctrine Integration• Crosstell• NEWS Release(s)• Video(s) For Training Purpose Only 61
  • 62. OperatiOnal risk ManageMentThe leader’s role will be a decisive factor in the success or failure of ORM For Training Purpose Only 62
  • 63. OperatiOnal risk ManageMentORM Leadership Opportunities1. Commit to Breakthrough Improvement Objectives: Put improvement of risk performance (control- opportunity) on a competitive level with other important mission concerns.2. Set Goals & Objectives Objectives: Establish periodic ORM performance and programmatic goals. For Training Purpose Only 63
  • 64. OperatiOnal risk ManageMentORM Leadership Opportunities Continued3. Set a Personal Example Objectives: To assure credibility of the ORM process through personal behavior.4. Build an Aggressive Opportunity Mindset in the Organization Objectives: Create an organization as conscious of the opportunity aspects of ORM as it is the risk reduction For Training Purpose Only 64
  • 65. OperatiOnal risk ManageMentORM Leadership Opportunities Continued5. Induce Loss Control Community Functional Integration Objectives: Build increasing cooperation and integration of the loss control community6. Establish an ORM Management Structure Objectives: Provide the necessary leadership and staff resources to adequately guide the ORM process For Training Purpose Only 65
  • 66. OperatiOnal risk ManageMentORM Leadership Opportunities Continued7. Resource ORM Activities Objectives: Allocate resources to ORM (control- opportunity) at a level it can competitively justify.8. Heat Shield Subordinates Objectives: Protect subordinates who have taken prudent, mission supportive risks, but experienced severe losses, from negative consequences. For Training Purpose Only 66
  • 67. OperatiOnal risk ManageMent ORM Leadership Opportunities Continued9. Detect & Correct Gambling Objectives: Develop an organization in which risk “gambling” is deterred even when the gambler “wins”.10. Use the Power of Question Objectives: Use pointed ORM questions to induce ORM activity and culture change. For Training Purpose Only 67
  • 68. OperatiOnal risk ManageMent ORM Leadership Opportunities (Continued)11. Regularly Monitor ORM Progress Objectives: Periodically assess a set of data that effectively monitors organization ORM status12. Exploit the ORM Value of Major Mishap Reviews Objectives: Consistently induce consideration of the ORM implications of mishaps For Training Purpose Only 68
  • 69. OperatiOnal risk ManageMent For Training Purpose Only 69
  • 70. Questions and Answers For Training Purpose Only 70