OPERATIONAL RISK MANAGEMENT (ORM)

1. OPERATIONAL RISK MANAGEMENT (ORM)

2. OBJECTIVES • Describe what ORM is and why the USCG is using it. • Describe when and why to apply ORM. • Use the seven step USCG ORM process. • Use USCG ORM tools and job aids.

3. WHAT IS OPERATIONAL RISK MANAGEMENT (ORM)? • A systematic approach to optimizing risk to support best mission outcomes. • A specific seven step process supported with tools and job aids.

4. USCG ORM VISION “Increase mission success while reducing the risk to personnel, resources and the environment…” “Change from a compliance based to a risk-based philosophy…” “Provide logical process to identify & exploit opportunities producing greatest return on our investment…”

5. WHY IMPLEMENT ORM? • ORM applications are proven to offer mission supportive breakthrough potential. • Force reductions make every USCG person and item of equipment more critical to mission success. • ORM can significantly increase USCG operational capabilities and training realism.

6. 4 KEY ORM PRINCIPLES 1.Accept no unnecessary risks. 2.Make risk decisions at the appropriate level. 3.Accept risks when benefits outweigh costs. 4.Integrate ORM into operations and planning at all levels.

7. The single greatest advantage of ORM over traditional risk management is the consistent detection of 50%+ more hazards. BUT.... NOBODY TAKES “UNNECESSARY” RISKS? 1. Accept No Unnecessary Risks If all the hazards that could have been detected have not been detected then unnecessary risks are being accepted.

8. 2. Make Risk Decisions at the Appropriate Level Factors below become basis of a decision-making system to guide leaders • Who has operational control & responsibility? • Who is the senior person at the scene? • Who possesses best insight into the full benefits and costs of a risk? • Who has the resources to mitigate the risk? • What level makes the most operational sense?

9. 3. Accept Risks When Benefits Outweigh Costs. MAINTAINING A BOLD, RISK-TAKING ORGANIZATION IS ALWAYS A CHALLENGE. ORM HELPS. Taking calculated risks is essential for an organization to grow and capitalize on its capabilities.

10. Loss Control Occurs Within The Process 4. Integrate ORM Into Operations and Planning At All Levels. This is the one we want!! Loss Control Staff Injects Operational Leaders Add-On Operational Process Operational Process Operational Process

11. HOW WILL THE COAST GUARD IMPLEMENT ORM? • Apply the seven step ORM process and the supporting tools • In a consistently mission supportive way • Through a highly integrated and decentralized approach

12. HOW DO WE ASSURE THAT ORM IS ALWAYS MISSION SUPPORTIVE? • Target optimum mission risk, not minimum risk. • Involve operators to insure risk controls are mission supportive. • Use only the amount of ORM dictated by the risk. Low risk - less ORM, high risk - more ORM.

13. PLANNING OPERATIONS AFTER-ACTION -Deliberate ORM -Detailed Hazard ID -Integrated -Largely Time-Critical -Change Analysis -Real Time -Highly Decentralized -Assess Indicators -Deliberate ORM -Integration -Feedback We try to get most ORM done here But continue the process here and here USING THE 7-STEP PROCESS THE RISK MANAGEMENT CONTINUUM

14. WHAT IS THE SEVEN STEP ORM PROCESS? A decision-making technique A job aid & tool Optimizes risk

15. Step 1 - Identify Mission Task (COMDTINST 3500.3, Encl 1) Clearly state the mission objective. Define what tasks are required to accomplish the mission. Define the conditions under which to accomplish the task.

16. THE MISSION ANALYSIS UNDERSTANDING THE FLOW OF EVENTS

17. MISSION ANALYSIS • METHOD: List the events in sequence. • RESOURCES: Mission planners & operators. • COMMENTS: ORM must cover all aspects of an operation. The Mission Analysis supports that. The “MA” is a must do!

18. MISSION ANALYSISAdvance Rescue Ops • Beach party on scene. • Launch aircraft. • Enroute considerations. • Approach to water. • “Survivor” & RS events. • Aircraft Switch-Out • Subsequent Scenarios • Recovery all elements

19. Step 2 - Identify the Hazards (COMDTINST 3500.3, page 4) Hazard: Any real or potential condition that can cause mission degradation, injury, illness, or death to personnel or damage to or loss of equipment or property.

20. HAZARD ANALYSIS What can go wrong? OVERALL MISSION • Focus on the critical • components of your mission: • Equipment • Personnel/Experience • Environment • Timeline

21. HAZARD ANALYSIS • P.E.A.C.E. • Planning • Event • Asset • Communication • Environment • What Can Go Wrong? • Equipment • Personnel • Environment • Timeline • What Safe Guards Exist? • How Effective Are They?

22. Step 3 - Assess the Risks The Process which associates “hazards with “risks”.

23. RISK HAZARD VERSUS RISK A description of a condition that can impair mission accomplishment. No indication of its mission significance. HAZARD A hazard for which we have estimated the severity, probability, and exposure to determine the scope with which it can impact our mission.

24. ASSESS RISKS SEVERITY - What are the effects? PROBABILITY - Can this happen to us? EXPOSURE - What is the event frequency or degree of involvement?

25. SEVERITY • Mission • Man • Machine/Materiel Potential Consequences measured in terms of degree of impact on:

26. SEVERITY CATEGORIES CATASTROPHIC - Complete mission failure, death, or loss of system. MAJOR - Major mission degradation, severe injury, occupational illness, or major system damage. SIGNIFICANT - Minor mission degradation, injury, minor occupational illness, or minor system damage. MINIMAL - Less than minor mission degradation, injury, occupational illness or minor system damage. NONE - No impact to personnel or mission outcome.

27. PROBABILITY • Likelihood that potential consequences will occur: • Very likely to happen • Likely, greater than 50% chance • Occasional, about 50-50 chance • Unlikely under normal conditions • Remote under any conditions Acknowledge “uncertainty”

28. EXPOSURE • Duration/repetition/number of people &/or equipment involved in event: • Great • Above Average • Average • None or below average

29. THE RISK PRIORITY LIST Biggest hazard By ranking the hazards, we can work them on a worst first basis. This is vital because risk control resources are always limited and should be directed at the big problems first to assure maximum bang for the buck. Least hazard worthy of action

30. USCG Aviation Risk Assessment Model Simplifies SPE assessment through use of GreenAmberRed (GAR) Model

32. Step 4. Identify Options • Are risks acceptable or unacceptable? • Can we modify the mission to reduce risk? • Are any safeguards missing? • What new options should we consider? Use Risk Priority List - Attack “Worst First”

33. IDENTIFY OPTIONS • S.T.A.A.R • Spread Out • Transfer • Avoid • Accept • Reduce Mission Priority & Time Criticality Often Drive Options

34. Step 5. Evaluate Risk vs Gain • Seek optimal risk management • Gain should balance or outweigh the Risk • Risk Decision made at lowest appropriate level • Command validates Assessment & Management Equates to “Reality Check”

36. Risk vs Gain

37. Step 6. Execute Decision • Control Options must be implemented • Decision Rational must be communicated • Facilitates S.A. regarding Risk Management process

38. Step 7. Monitor Situation • Insure Control Options are effective • ID changes requiring further RA/RM • Capture “Lessons Learned” Failure to respond to changes can become Links in the Mishap Chain

39. Questions?

40. USING THE 7-STEP PROCESS LEVELS OF EFFORT “TIME CRITICAL” “DELIBERATE” “STRATEGIC” Little: - Time - Complexity - Risk Lot of: - Time - Complexity - Risk ORM is applied proportionate to operational complexity, criticality, and risk!