The document discusses the future of risk management in light of lessons learned from COVID-19 and emerging technologies like Industry 4.0. It notes that COVID-19 highlighted the inadequacies of current risk management approaches and the need to sense and respond better to crises. Industry 4.0 technologies like digital twins, VR/AR, automation, advanced analytics, and IoT can help transform risk management by enabling real-time risk identification, evaluation of risk impacts, and assessment of risk treatment effectiveness.

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The future of risk
Learning from COVID-19 and Industry 4.0
NT Safety Symposium with Associate Professor Maureen Hassall

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Significant insights so far
• Difficult getting reliable information
• The velocity of the crisis and its impact of the full ecosystem
highlighted current management approaches were inadequate
and/or too rigid
Best approaches involve
• “acting fast and decisively, assuming the worst in the absence of
full information, and avoiding stepwise, partial solutions”
• Communicating with stakeholders continuously
Key lesson
• Need to get smarter at “sensing and responding” to crisis and to
proactively develop strategies that identify and address new
threats and opportunities
COVID-19 SYNOPSIS 1:
(Source: Eagar et al, 2020, Lessons from CEOs retrieved from WEF)
Maureen Hassall 2020

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If the future was certain
there would be no threats
and opportunities – there
would be no R!SK
Risk exists when there are
potential threats and opportunities
that can impact the achievement of
objectives we value
THE FUTURE OF RISK
https://www.pngitem.com/middle/wRhbbo_hands-over-crystal-ball-hd-png-download/
Maureen Hassall 2020

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Objectives we value often relate to:
1. Preserving one’s existence
by preventing disasters and adverse
events from happening
2. Realising one’s potential
by capturing opportunities to continue
to improve, learn and grow
THE FUTURE OF RISK
(Cartoons from https://dispatcheseurope.com/calum-nicholson-of-course-we-should-do-everything-
to-stop-coronavirus-but-maybe/partial?_=1601856000000)
Maureen Hassall 2020

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Most want to experience:
 No big mistakes
 No big lost opportunities
 No big surprises
Such unwanted deviations are
identified and addressed with
risk management activities
(Images by https://pixy.org/4332477/ and SilviaP_Design from Pixabay
THE FUTURE OF RISK
“It does not do to leave a live dragon out of your
calculations if you live near one” J.R.R. Tolkien
Maureen Hassall 2020

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LIKELIHOOD
CONSEQUENCE
Irreversible,
widespread
Temporary
& localised
Rare Common
Major Disruptive Risks
(e.g multiple fatalities)
Traumatic Events
(e.g. single fatalities)
Unwanted Incidents
(e.g. non-permanent
injuries)
Systemic
Risk Management
Task based
Risk Management
MANAGING COVID RISKS
COVID-19
A major disruptive risk
Lessons learned from
COVID-19 can apply to
other major disruptive risks
Maureen Hassall 2020

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Major disruptive risks are
• Often rare but have widespread,
significant and long lasting
impacts (e.g. COVID-19)
• Stem from the biological,
environmental, and man-made
No. entities
impacted
Severity of
impact
Impact
duration
Multiple
Long lasting
to permanent
High
COVID-19
Common
Cold
Flu induced
organ failure
DEFINITION
Maureen Hassall 2020

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Biological disruptors
- Human transmittable diseases
(e.g Coronaviruses, HIV/AIDs, flu)
- Animal borne diseases
(e.g mad cow disease, dengue fever)
- Vegetable borne diseases
(e.g salmonella and legionnaires)
https://www.visualcapitalist.com/history-of-pandemics-deadliest/
EXAMPLES
Maureen Hassall 2020

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Environmental disruptors
- Earthquakes
(e.g Christchurch)
- Cyclones/Hurricanes
(e.g Hurricane Katrina)
- Tsunamis/Floods
(e.g 2010 QLD floods)
- Bushfires
(e.g 2019/2020 Australian Bushfires)
- Draughts
(e.g Millenium draught in Australia)
- Solar storms
(e.g. 1989 storm that impacted Quebec)
- Climate Change
https://www.brinknews.com/the-10-most-costly-natural-disasters-of-the-century/
EXAMPLES
Maureen Hassall 2020

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Man-made disruptors
- Industrial Disasters
- Oil and Gas (e.g. Deepwater horizon, Texas
City, Lac-Megantic derailment)
- Chemical (e.g. Bhopal, Sevesco, West Texas)
- Nuclear (e.g. Chernobyll, Fukushima)
- Manufacturing (e.g. Dhaka factories disasters,
Georgia Sugar, Istanbu fireworks explosion)
- Mining (e.g. Soma explosion, Brumadinho
Dam, Kowezi mine collapse)
- Supply chain (e.g. Port of Tianjin, West Texas)
- Aviation (e.g. Concorde crash, Space Shuttle
disasters)
- Amusement Parks (e.g. Dreamworld ride
failure, Transvaal park roof collapse, Formosa
Fun Coast music stage dust explosion) From Lee, Cameron, Hassall (2020) who sourced it from R. Jarvis (2015 )An Analysis of Common Causes of Major Losses in
the Onshore Oil, Gas and Petrochemical Industries Retrieved
from https://www.icheme.org/membership/communities/special-interest-groups/safety-and-loss-
prevention/resources/hazards-archive/hazards-27/, re
EXAMPLES
Maureen Hassall 2020

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Man-made disruptors
- Political/economic influences
- Economic downturns (e.g GFC)
- International embargos/sanctions
- Trade wars
- Changes in taxation/regulations
- Security breaches/Terrorism
- Cyber attacks (e.g. hacking and ransomware)
- Physical attacks (e.g. 9/11, mass shootings)
EXAMPLES
https://www.nationalgeographic.com/magazine/2019/06/china-plastic-waste-ban-impacting-
countries-worldwide/https://www.nationalgeographic.com/magazine/2019/06/china-plastic-waste-ban-impacting-
How China’s plastic waste ban forced a global recycling reckoning
Maureen Hassall 2020

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https://www.lbcoaching.co.za/surfacing-the-elephant-in-the-room/
Major Disruptive Risks will continue
- With increasing frequency
- With increasing impacts
- As cumulative events
We don’t manage these risks as effectively
as we could because “a host of cognitive
and other bias – including simple wishful
thinking – trick us into seeing mild risk
when risk is in effect wild” Bent Flyvbjerg
KEY LESSON
Maureen Hassall 2020

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“Over the longer term, the only
alternative to risk management is
crisis management—and crisis
management is much more
expensive, time consuming, and
embarrassing.”
James Lam (Enterprise Risk Management:
From Incentives to Controls, 2014)
0%
5%
10%
15%
20%
25%
30%
35%
EY (2004 to
Nov 2011)
FERMA (5
years to June
2012)
EY (2004 to
Nov 2011)
FERMA (5
years to June
2012)
Revenue EBITDA
Growth
Risk Maturity and Financial Performance
Companies with most advanced risk maturity
Companies with low levels of risk maturity
KEY LESSON
Owners should consider and identify “low probability failures for their devices,
so that these risks can be mitigated altogether” [Dreamworld Coroner’s Report 998]
Maureen Hassall 2020

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The “great unfreezing”: organisations have,
within days, been forced to work in new ways
– this speed and willingness to upend old
paradigms and set new standards will build
long-term strategic advantage.
These changes have accelerated the migration
to digital technologies at stunning scale and
speed, across every sector – detecting signals
and analyzing and communication data in
real time to decision makers so necessary
adaptations can be quickly implemented will
be essential for success
(McKinsey & Company, 2020)
https://www.industr.com/en/emerging-digital-technologies-helping-humans-in-the-covid-crisis-2480059
COVID-19 SYNOPSIS 2:

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LESSONS FOR RISK MANAGEMENT
. . . . to intelligence enabled workplace health
and safety systems that deliver a step change
improvement in safety.
If we have progressed from this
Then with Industry 4.0 tech we can
progress from this…
. . . . to this!
Maureen Hassall 2020

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INDUSTRY 4.0
TECHNOLOGY
Cyber Physical
Systems
Digital twins
VR/AR
technologies
Automation and
autonomy
Advanced Data
Analytics
Big data and
predictive
analytics
Artifical
intelligence
Industrial
Internet of
Things
ROLE OF INDUSTRY 4.0
Maureen Hassall 2020

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DIGITAL TWINS
Source: https://au.mouser.com/applications/digital-twins-offer-insight/
Digital twins are a digital model of
the real world that can be fed with
hypothetical, historical, or real-time
data to
• Identify risks
• Evaluate impacts of risks
• Assess effectiveness of risk
treatment options
Maureen Hassall 2020

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VR/AR TECHNOLOGIES
Virtual reality and augmented reality
provide interfaces through which the
user is presented with a combination
of real-world and computer generated
information which can be used for:
• Training and scenario based
exercises
• Real-time, in-situ access to expert
advisory systems,
• Hazard identification and risk
assessments,
• Risk control monitoring
• Inspections, auditing, incident
analysis
Images by S. Hermann & F.
Richter from Pixabay and by
https://www.industryweek.c
om/technology-and-
iiot/article/22027846/indust
rial-ar-crosses-chasm-
realwear-hits-milestone
Maureen Hassall 2020

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AUTOMATION AND AUTOMONY
Semi-automated to fully
autonomous plant and mobile
equipment that performs work.
Examples include autonomous
vehicles, automated plant,
drones, robots. They can remove
people from hazardous work
areas and from doing harmful
work (e.g. repetitive or straining).
https://www.news.com.au/technology/fact
ory-worker-killed-by-rogue-robot-says-
widowed-husband-in-lawsuit/news-
story/13242f7372f9c4614bcc2b90162bd749
https://futurism.com/robot-kills-man-at-
volkswagen-plant-human-error-to-blame
Maureen Hassall 2020

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DATA ANALYTICS AND AI
Processes by which data is processed to
provide information, knowledge and insights.
Examples include meta-analysis to identify
emergent risks and hazards, potential
deviations and failures and consequences on
plant, processes, people and overall system
performance.
(Source: https://www.uktech.news/how-artificial-intelligence-is-transforming-businesses-20200213)
Maureen Hassall 2020

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INDUSTRIAL INTERNET OF THINGS
Image by Gerd Altmann from Pixabay
Using the internet to connect
sensors, instruments, devices,
machines, equipment and plants
together via digital networks.
Allows for:
- full integration of system
components, data and data
analysis,
- use of remote control,
supervision
- Real-time integrated
communications.
Maureen Hassall 2020

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ROLE OF INDUSTRY 4.0
Industry 4.0 can not only address threats and
opportunities associated with major
disruptive events but it will bring its own
threats and opoortunities.
Further user-centred R&D is required to
proactively develop strategies that help decision
makers identify and address new threats and
opportunities associated with major disruptive
risks

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Thank you
Maureen Hassall
Email: m.hassall1@uq.edu.au
LinkedIn: www.linkedin.com/in/maureen-hassall-78434111