Undesirable, unknown events can and do happen. What is not known is often more important than what is known. Ray Garrison discusses how unknown incompetence and improbable events are difficult to predict or prepare for. He emphasizes identifying more of the unknown through various indicator sources to help assess risks and respond rapidly to events. Preparing for unknown possibilities in both work and personal life can help mitigate potential negative impacts.

1. It's What You Don't Know That Can Hurt You...
Ray Garrison

2. Who am I?
Ray Garrison
Director of Quality Assurance
Stryker Orthopaedics – Alameda CA
-Over 24 years in Manufacturing, Quality
and R
d Regulatory C
l Compliance
li
-MBA –University of Florida
-Six Sigma Black Belt
-Held leadership positions at Biomet and
Johnson & J h
J h Johnson
The views expressed in this p
p presentation are my own and do not reflect the views
y
of my employer or other organizations with which I am or have been affiliated.
All cited trademarks are the property of their respective owners.
Ray Garrison

3. Framing the discussion
In the time we have together today, we
will explore:
- Probabilities and Rationalizations
-KKnown and U k
d Unknown I Incompetence
t
- Identifying more of the Unknown
- How to quickly assess and respond to
events
Ray Garrison

4. Framing the discussion
Undesirable, unknown,
unplanned for events can
l df t
and do happen.
What you don’t know is far
more relevant than what
you d know.
do k
Think about this for a moment….
Ray Garrison

5. Undesirable, unknown,
unplanned for events can and do
happen.
Brooksley Born the Cassandra of the Derivatives Crisis
Born,
Tuesday, May 26, 2009
A little more than a decade ago, Born foresaw a financial cataclysm,
accurately predicting that exotic investments known as over-the-counter
derivatives could play a crucial role in a crisis much like the one now
convulsing America. Her efforts to stop that from happening ran afoul of some
of the most influential men in Washington, men with names like Greenspan
and Levitt and Rubin and Summers -- the same Larry Summers who is now a
key economic adviser to President Obama. She was the head of a tiny
government agency who wanted to regulate the derivatives They were the
derivatives.
men who stopped her.
The same class of derivatives that preoccupied Born -- including the now-
infamous "credit-default swaps" -- have been blamed for accelerating last
fall's financial implosion. But from 1996 to 1999, when Born was the chairman
p ,
of the Commodity Futures Trading Commission, the U.S. economy was
roaring and she was getting nowhere with predictions of doom.*
*Washington Post Ray Garrison

6. Undesirable, unknown,
unplanned for events can and do
happen.
h
Fukushima tsunami safety plan: a single page memo raises questions,
sparks outrage over Japanese nuke site's disaster readiness
TOKYO — Japanese nuclear regulators trusted that the reactors at Fukushima Dai-ichi
were safe from the worst waves an earthquake could muster based on a single-page
memo from the plant operator nearly a decade ago.
In the Dec. 19, 2001 document — one double-sized page obtained by The Associated
Press under Japan's public records law — Tokyo Electric Power Co. rules out the
possibility of a tsunami large enough to knock the plant offline and gives scant details to
justify this conclusion, which proved to be wildly optimistic*
The document wasn’t updated once in
nine years, even as earthquake science
advanced – and last year, when TEPCO
took another look at safety preparation, it
was the same conclusion: The plant would
stay dry no matter what.**
*MSNBC.com
**AP Ray Garrison

7. Undesirable, unknown,
unplanned for events can and do
happen.
Tue Jan 24, 2012 4:21pm EST
Johnson & Johnson (JNJ.N) took
( )
quarterly charges of more than $3 billion
largely related to the recall of its
defective artificial hips and gave a 2012
earnings forecast below analysts'
estimates.*
ti t *
* Reuters
Ray Garrison

8. Undesirable, unknown,
unplanned for events can and do
happen.
The pharmaceutical giant Pfizer agreed
to pay $2 3 billion to settle civil and
$2.3
criminal allegations that it had illegally
marketed its painkiller Bextra, which has
p ,
been withdrawn. It was the largest
health care fraud settlement and the
largest criminal fine of any kind ever.*
* New York Times
Ray Garrison

9. Undesirable, unknown,
unplanned for events can and do
happen.
4/11/12 – Johnson & Jo so
/ / Jo so Johnson
A state judge in Arkansas ordered Johnson &
Johnson to pay a $1.1 billion fine after a jury found
the company had minimized the risks of its
p y
antipsychotic drug Risperdal.
The Arkansas jury's decision and the judge's
p
penalty are j
y just the latest legal setbacks for
g
Risperdal. A South Carolina judge upheld a $ $327
million penalty against J&J and its Janssen unit
late last year.
Earlier this
E li thi year, th company agreed t pay $158
the d to
million to settle charges it improperly marketed
Risperdal in Texas and caused the state's
Medicaid program to spend too much on the
medicine.*
*Bloomberg News
Ray Garrison

10. Undesirable, unknown,
unplanned for events can and do
happen.
4/18/12 – St. Jude Medical
/ 8/ S J
Earlier this month, St Jude halted sales of its
QuickSite and QuickFlex leads, wires that carry
electricity from defibrillators to the heart, due to
concerns the insulation could wear away and
expose the wires. Around the same time,
HeartRhythm, a prominent medical j
y p journal,
published an article by Dr. Robert Hauser of the
Minneapolis Heart Institute that took a critical
look at St Jude's Riata lead line that was
recalled i 2011 The piece concluded th t th
ll d in 2011. Th i l d d that the
St Jude product failed at a higher rate than
Medtronic Inc's (MDT.N) lead, prompting St
Jude to ask for a retraction of the article
article,
drawing even more attention to the issue.
Ray Garrison

11. Undesirable, unknown,
unplanned for events can
l df t
and do happen.
What you don’t know is far
more relevant than what
you d know.
do k
Ray Garrison

12. How do Unknown/Improbable Events
Occur?
Undesirable, unknown,
unplanned for events
Confluence of known
and/or unknown inputs
Known and unknown
indicators
Probabilities, planning,
monitoring metrics

13. Probabilities
Probability: “a strong likelihood or chance of
something” For Statistics: “the relative frequency
thi ” F St ti ti “th l ti f
with which an event occurs or is likely to occur”*
Before you go out tonight, Las Vegas:
“Each game you play at a casino has a
statistical probability against you winning. Every
single time.”
“The slot machine odds are some of the worst,
“ f
ranging from a one in 5,000 to a one in about
34 million chance of winning the top prize when
using the maximum coin play ”**
play.
*Dictionary.com
**Investopedia.com – Casino Stats, Why Gamblers Rarely Win.
Ray Garrison

14. Probabilities
Odds of being killed by lightening - 1 in 2 million.
Odds of being killed in a car crash - 1 in 5,000.
Odds of being killed in a tornado - 1 in 2 million.
Odds of being killed in a plane crash -1 in 25 million.
The thing about probabilities is that no one thinks
g p
it will happen to them…..
Ray Garrison

15. The Difficulty of Prediction
y
You are using the past to predict
the future – Not always a good
indictor.
What do the mutual fund
commercials say? Past
performance is not a predictor of
future performance.
performance
We are not fortune tellers
Technology, interconnections,
Technology interconnections
interdependencies, complexities
exist that make predictions
difficult
diffi l
Ray Garrison

16. Randomness
Physicist Leonard Mlodinow of the California
Institute of Technology – “our brains never
evolved a probability network and thus our
network,
folk intuitions are ill equipped to deal with
many aspects of the modern world. Our
intuitions are misleading when it comes to
probabilistic problems.”*
Extraordinary events do not always require
extraordinary causes. Given enough time,
they can happen by chance. Knowing this, we
can learn to judge decisions by the spectrum
j g y p
of potential outcomes they might have
produced rather than by the particular result
that actually occurred.*
* Scientific American: How Randomness
Rules Our World and Why We Cannot See It
Ray Garrison

17. Examples of Items that Hamper
Evaluation/Assessment
Incomplete and overlapping information
from multiple units can cause
executives/regulators to underestimate
i / l d i
risk and leverage.
Interconnected dependencies that we
are aware of or unaware of
Insufficient grasp of systemic risk
Ray Garrison

18. We Always Try To Rationalize:
Why?
?
We try to make sense of the
world around use.
We try to simplify to understand
understand.
We extrapolate and make
conclusions using insufficient or
incorrect data.
We are uncomfortable with the
unknown, uncertainty.
Ray Garrison

19. Undesirable, unknown,
unplanned for events can
l df t
and do happen.
What you don’t know is far
more relevant than what
you d know.
do k
Ray Garrison

20. Conscious versus Unconscious
Incompetence
Cognitivedesignsolutions.com
Ray Garrison

21. Conscious Incompetence
You’re out of your league
y g
You’re in way over your head
Ego Says – I can handle this
g y
Worried about how you look, what you will
say
How are knowledge/skill gaps
communicated, evaluated, mitigated?
Ignoring gaps hoping you will have what’s
what s
needed before you have to deal with the
g p
gap.
Ray Garrison

22. Unconscious Incompetence
You don’t know what you don’t
know
Don’t have a clue
Completely taken by surprise
Assumptions of capability, control,
p p y, ,
and detection are incorrect
Denying relevance / usefulness of
indicators or data
The dim light at the end of the
tunnel is a Train coming right at
you and You Don’t See It
Perception is out of line with reality
f
GAPS HAMPER RESPONSE!
Ray Garrison

23. Sources of Indicator Data to
Help Identify the Unknown
Traditional indicators: Complaints,
NCR’s, CAPA’s
Your People are y
p your ggreatest resource.
Ask what they see, hear, experience.
Debriefing / Learning from Near Misses
Fault Seed Testing
Monitoring Regulatory Agencies
Literature Reviews
Professional Organizations/Groups
g p
Ray Garrison

24. Sources of Indicator Data to
Help Identify the Unknown
f
Allow Time to think about the following:
Focused, regular discussions on what
could happen and how the organization
pp g
would react.
Emergency / Contingency Planning
g y g y g
Data Analysis:
Creating new ways of looking at current data
Creating/Capturing new data
Transposing data matrices
p g
Ray Garrison

25. Sources of Indicator Data to
Help Identify the Unknown
f
Internal Audits:
How robust are your internal audit
programs?
Are you challenging the audit teams to
dig deep?
Audit Team Training
Audit Team / Organization Mindset
Trends and Trending
Ray Garrison

26. Sources of Indicator Data to
Help Identify the Unknown
f
How Can You Identify the Unpredictable?
y p
Active Thought Activities
Process Mapping
Brainstorming internal/external unpredictable
events
Framing the event context
○ What
○ Where
○ When
○ To What Extent
Ray Garrison

27. Preparing for the Unknown in Our
Personal Lives
We prepare for unknown (p
p p (potentially
y
damaging) events in our personal lives
Emergency Funds
Insurance: Life/Home/Car/Disability
Documents: Wills/Trusts/POA’s
Ray Garrison

28. Can You Prepare for the
Unpredictable?
?
An Event (any event) Occurs
Occurs.
What do you do?
What process is there?
Who is involved?
Who today in your organization
manages the gray, the big problems, the
emergencies?
i ?
How do they do it?
Ray Garrison

29. How Can You Mitigate?
A Response Plan
Knowing your processes intimately
Knowing where the control points are
A Rapid Response Team – The key here
is “Rapid”! Analysis Paralysis will kill
Rapid !
you!!!
Always focused on the customer in
decision making (For Med Device /
Pharma - Patient / Doctor)
Ray Garrison

30. Risk Management Standards &
Tools
ISO 14971: Medical Devices – Application of Risk
Management to Medical D i
M t t M di l Devices
ISO 16085: Systems and Software Engineering –
Life Cycle Processes – Risk Management
ISO 31000 Risk Management – P i i l and
Ri k M t Principles d
Guidelines
Failure M d Eff t Analysis: ISO 60812
F il Mode Effects A l i
Preliminary Hazard Analysis (PHA)
Fault Tree Analysis (FTA): IEC 61025
Event Tree Analysis (ETA): IEC 62502
Assurance Case Analysis: ISO 15026-2
Ray Garrison

31. Additional Topics of Study that
can be beneficial
f
Complex Systems Thinking
Because complex systems are inherently non-linear,
small events can suddenly produce large and
unexpected effects This is a key point in systems
effects.
theory.
Statistics
Truly understanding what data is used, how data is
used, what analysis was completed, what the results
are indicating.
g
○ Incorrect/inappropriate data may be used.
○ Incorrect/inappropriate Statistic Tools may be used.
Ray Garrison

32. Undesirable,
unknown, unplanned
, p
for events can and do
happen.
What you don t know
don’t
is far more relevant
than what you do
y
know.
Ray Garrison

33. So What Are YOU Going To
Do?
?
Engage and Embrace the Unknown
Acknowledge missing and undefined
variables in our neat little equations
Allow Yourself and Your Teams time to
critically think about these topics
Ray Garrison

34. QUESTIONS?
Ray Garrison

35. THANK YOU
For Your Time!
Ray Garrison