Operational Risk Management

ORM Definition

ORM is the process of dealing with the risks associated with

military operations, which includes: risk assessment, risk

decision making and implementation of effective risk

controls.

Objectives

Upon completion of this lesson, you will be able to:– Define Operational Risk Management (ORM)

– Define Time-Critical Risk Management (TCRM)

– Describe the levels of ORM

– Discuss the link between the ORM 5 Step Process and TCRM

– Discuss how TCRM increases situational awareness and decreases risks

– Apply TCRM to real-life situations

The ORM Process

• Is a decision making tool used by personnel at all levels to increase effectiveness by identifying, assessing, and managing risks

• Increases our ability to make informed decisions.

• Minimizes risk to acceptable levels.• Applies both on the job and in off-duty

activities.

“ORM must be practiced 24 hours a day, 7 days a week, 365 days a year.”

Principles of ORM

• Accept risk when benefits outweigh the costs.

• Accept no unnecessary risk. • Anticipate and manage risk by

planning.• Make risk decisions at the right level.

Levels of ORM

Strategic TacticalTime Available for Planning

In-Depth Deliberate Time Critical

Limited/No Timefor Planning Mission &

TaskSuccess

Controls become resources during execution

Charts / FlipsShip/Aircraft(Systems Safety)InstructionsEquipment DesignFormal Training

Team/CrewMission Execution ChecklistChange Management(Mission/Crew Change)Equipment Degradation

Operational PlanningMission BriefsCO Standing OrdersSafety Equipment

Assess the Hazards

Assess the severity

Assess Probability

Complete Risk Assessment

ORM Process CycleIdentify the Hazards

AnalyzeMission

Determine Hazard Root Causes

ListHazards

Make Risk DecisionsIdentify Control Options

Determine Control Effects

Make Risk Decisions

Implement ControlsMake Implementation Clear

Establish Accountability

Provide Support

SuperviseMonitor

Review

Feedback

Missions

DetermineResidual Risk

Adjust Controls

New Hazards

LessonsLearned

Identify the Hazards

A hazard is any condition with the potential to negatively impact mission accomplishment or cause injury, death, or property damage.

To identify the hazards:• Analyze the mission – Review the plans and orders describing the mission or task to ID all tasks, requirements and conditions then create a sequential or chronological list of all major events or tasks in a mission

• List the hazards – Review each event in the sequence of tasks for hazards. Involve operators and those with applicable experience. Brainstorming is useful for this preliminary hazard analysis. Ask “what if” to think about what could go wrong.

• Determine the root cause - Make a list of the causes associated with each identified hazard. The root cause is the first link in the chain of events leading to mission or task degradation.

Assess the Hazards

Assess the severity

Assess Probability

Complete Risk Assessment

ORM PROCESS CYCLEIdentify the Hazards

AnalyzeMission

Determine Hazard Root Causes

ListHazards

Make Risk DecisionsIdentify Control Options

Determine Control Effects

Make Risk Decisions

Implement ControlsMake Implementation Clear

Establish Accountability

Provide Support

SuperviseMonitor

Review

Feedback

Missions

DetermineResidual Risk

Adjust Controls

New Hazards

LessonsLearned

Assess the HazardsFor each hazard indentified, determine the associated degree of risk in terms of probability and severity. The result of the risk assessment is a prioritized list of hazards, which ensures that controls are first identified for the most serious threat to mission or task accomplishment.

Risk: An expression of possible loss due to a hazard in terms of severity and probability.

Severity: Determines how bad the results would be if the hazard caused a mishap. Qualitatively categorized from 1 to 4, with 1 being the most severe.

Probability: Determines how likely the hazard could cause a mishap. Qualitatively categorized from A to D, with A being the most probable.

Severity Categories• Cat I: Death, loss of facility/asset or result in grave

damage to national interests. • Cat II: Severe injury, illness, property damage,

damage to national or service interests or degradation. • Cat III: Minor injury, illness, property damage, damage

to national or service interests or degradation. • Cat IV: Minimal threat to personnel safety or health,

property, national, service or command interests use of assets.

Probability Criteria

• Subcategory A: A mishap likely to occur immediately or within a short period of time.

• Subcategory B: Will cause a mishap in time.

• Subcategory C: May cause a mishap in time.

• Subcategory D: Unlikely to cause a mishap.

Risk Assessment Code MatrixThe Risk Assessment Code (RAC) Matrix is used to determine the RAC for a hazard. You must cross probability and severity to obtain this code.

SE

VE

RIT

YE

ffect

of H

azar

d

Assess the Hazards

Assess the severity

Assess Probability

Complete Risk Assessment

ORM PROCESS CYCLEIdentify the Hazards

AnalyzeMission

Determine Hazard Root Causes

ListHazards

Make Risk DecisionsIdentify Control Options

Determine Control Effects

Make Risk Decisions

Implement ControlsMake Implementation Clear

Establish Accountability

Provide Support

SuperviseMonitor

Review

Feedback

Missions

DetermineResidual Risk

Adjust Controls

New Hazards

LessonsLearned

Criteria for Establishing Effective Controls

• Suitability• Feasibility• Acceptability• Explicitness• Support• Standards• Training• Leadership• Individual

Control Options

• Reject the risk• Avoid the risk• Delay an action• Transfer the risk• Compensate for

the risk

Types of Controls

• Engineering Controls: examples include material selection or substitution

• Administrative Controls: examples include warnings, markings, placards, signs, written policies, instructions, SOPs

• Physical Controls: examples include PPE, fences, special oversight personnel

Assess the Hazards

Assess the severity

Assess Probability

Complete Risk Assessment

ORM PROCESS CYCLEIdentify the Hazards

AnalyzeMission

Determine Hazard Root Causes

ListHazards

Make Risk DecisionsIdentify Control Options

Determine Control Effects

Make Risk Decisions

Implement ControlsMake Implementation Clear

Establish Accountability

Provide Support

SuperviseMonitor

Review

Feedback

Missions

DetermineResidual Risk

Adjust Controls

New Hazards

LessonsLearned

Implement Controls

• Clearly communicating plan to all involved personnel

• Establishing accountability

• Guaranteeing necessary support is available

Implementing Controls Requires:

Careful documentation of each step in the RM process facilitates risk communication and the rational processes behind the RM decisions.

Assess the Hazards

Assess the severity

Assess Probability

Complete Risk Assessment

ORM PROCESS CYCLEIdentify the Hazards

AnalyzeMission

Determine Hazard Root Causes

ListHazards

Make Risk DecisionsIdentify Control Options

Determine Control Effects

Make Risk Decisions

Implement ControlsMake Implementation Clear

Establish Accountability

Provide Support

SuperviseMonitor

Review

Feedback

Missions

DetermineResidual Risk

Adjust Controls

New Hazards

LessonsLearned

Supervise Supervision is a key step in the ORM

process. It involves determining the effectiveness of risk controls throughout the mission or task. This involves three actions:– Monitoring the effectiveness of risk controls– Determining the need for further assessment of all or a

portion of the mission or task due to an unanticipated change– Capturing lessons learned

Time Critical Risk Management

Red

Green

Yellow

Introduction: What is TCRM?

• TCRM is using risk management concepts when time and resources are limited.

• Applying ORM principles at the point of, or during execution of a mission or task

• Methodology is similar but less deliberate than the five step process

• The ABCD Model– A - Assess the situation– B - Balance Resources– C - Communicate to others– D - Do and Debrief the event

Red

Green

Yellow

Why TCRM?

• Experience is result of learning events• Leadership has a responsibility to marshal and

coordinate experience from all personnel• Inconsistent levels of team and individual

responses based on different levels of experience

• The ABCD model provides ability to match previous mission to new experience

• Provides common language in natural format

Nature of TCRM

• Designed to assist when– Working in a dynamic environment– Monitoring a static or routine situation– Making a decision with partial information

• Develop sound, consistent habits• Consistent with continuous improvement• Requires unique set of skills• Relies on experience• Standardizes communication

ABCD Model

•Green: indicates errors may occur, but will be caught by individual

•Yellow: indicates the potential for consequential errors have increased

•Red: indicates errors may occur that cannot be caught and become consequential to the task or mission

•The swooping arrow represents a return to good SA and mitigation of risk

• The blocks represent the multiple levels of resources

*The target is used during team communication to focus one or more individuals into an understanding of situational conditions or an individual may use it as a self-assessment tool

Red

Green

Yellow

ABCD

The ABCD block represents the TCRM mnemonic

A – Assess the situation B – Balance Resources C – Communicate to Others D – Do and Debrief the Event

Link Between TCRM and 5-Step Process

•Is not a replacement for the 5-step deliberate process

•Is the practical application of the 5-step process in a time-critical environment

Assess the Situation

• First two steps of the 5-step process• Requires accurate perception of situation

in a relatively short period of time• Must maintain good SA• Reliant on individuals ability to

comprehend situation and apply appropriate, available resources quickly and effectively

• Difference between success and failure

Balance Resources

• Tied specifically to making risk decisions (steps 3-5 of the 5-step process)

• Must consider using resources created for the mission or activity

• Thorough planning prior to event will increase availability of appropriate resources

• Examples: PPE, proper training, understanding task or mission

Communicate to Others

• “C” reminds us, explicitly, to communicate• Maintains good SA, task loading, & crew

factors are critical components• Communication tends to become limited

under stress/time constraints• Who needs to know?• What can be done?• Who can help or assist?

Do and Debrief the Event

• Tied to steps 4 & 5 of the 5-step process• Ensure the feedback loop is performed• Identify what worked and what did not• Ensure lessons are learned, recorded, &

disseminated• Improves performance, mitigates risks• Is essential to completing the ABCD loop

Applying TCRM into the Planning ProcessApplying TCRM into the Planning Process

1. Situational Awareness• I know my environment

• I can see changes

2. Mission Analysis• I can assess the changes• I can see how they affect my job/mission

3. Assertiveness• I have confidence in myself, my team, and my

leadership to bring new threats to their attention

4. Communication• I need to let my teammates or others involved

know what I know

5. Leadership• My leaders accept my plan for action or know

how to act to manage new risk

6. Adaptability/Flexibility• The plan is flexible and we can adapt to

changes

7. Decision Making• We have enough information, time and a good

plan of action, or we need help

ABCD for ABCD for Decision MakingDecision MakingAAssess the mission for potential adverse consequences

BBalance the use of Resources to minimize risk

CCommunicate Risks and Intentions

DDo (and debrief to improve future performance)

Skills Process

NIGHT UNREPNIGHT UNREP• Routine Evolution• Time Constrained• Supply ship committed (perceived)

Time Critical ScenariosTime Critical Scenarios

™

What’s Different?• Late at night start

(2300)• Winds and seas

different than forecast• Maintaining station

difficult• Keeping fuel hoses

seated very difficult

Decision Distractions• Desire to get the job

done now• Fatigue• Routine Evolution

Option A• Continue with evolution• Risks – damage to

equipment, peopleOption B• Breakaway and

reassess hazards and controls

• Risks – delay, lower than normal fuel

™

RETURN FROM LEAVERETURN FROM LEAVE• Routine Drive of 300 miles• End of Major Holiday Weekend• Muster at 0730• Getting underway in two days

What’s Changed?• Family early PM dinner

runs late• Rear tire deflated (slow

leak from nail puncture)• Light fog forms (not

forecasted)

Decision Distractions• Never been late from

leave• New Division CPO• Made this drive many

times before

Option A• Continue with Drive• Risks – fatigue, flat tire,

heavy trafficOption B• Call ship and speak to

OOD• Risks – Angry CPO,

miss underway briefs

Time Critical ScenariosTime Critical Scenarios

TCRM Card

Conclusion

• Practical use of the ABCD Model by all Navy personnel will sustain a responsive capability to effectively meet personal challenges or mission contingencies now and in the future

NROTC ORM

– Unit mission– Training syllabus– Medical reporting– Safety surveys– Physical training– Swim Program– Sail Training– Rifle/Pistol– Close Order Drill

– Marine Field Training Exercises

– Marine hikes– Orientation– Levels of ORM training in

NROTC Program – Pre-Mishap Safety Plan – Medical Reporting– TCRM Cards

Questions & Summary