operational risk management (orm). objectives à describe what orm is and why the uscg is using it....

OPERATIONAL RISK MANAGEMENT (ORM)

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.

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.

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…”

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.

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.

BUT.... NOBODY TAKES “UNNECESSARY” RISKS?

If all the hazards that could have been detected have not been detected then unnecessary risks are being accepted.

The single greatest advantage of ORM over traditional risk management is the consistent detection of 50%+ more hazards.

1. Accept No Unnecessary Risks

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?

Taking calculated risks is essential for an organization to grow and capitalize on its capabilities.

MAINTAINING A BOLD, RISK-TAKING

ORGANIZATION IS ALWAYS A CHALLENGE.

ORM HELPS.

3. Accept Risks When Benefits Outweigh Costs.

Operational Process

Operational Process

Operational Process

Loss Control Staff Injects

Operational Leaders Add-On

Loss ControlOccurs WithinThe Process

This is the one we want!!

4. Integrate ORM Into Operations and Planning At All Levels.

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

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.

USING THE 7-STEP PROCESS THE RISK MANAGEMENT CONTINUUM

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

WHAT IS THE SEVEN STEP ORM PROCESS?

A decision-making technique

A job aid & tool

Optimizes risk

M o n ito r S itu a tion

E xe cu te D e c is ion

E va lu a te R isk vs G a in

Id e n tify O p tio ns

A sse ss R isks

Id e n tify H a za rds

Id e n tify M iss io n T a sks

Clearly state the mission objective.

Define what tasks are required to

accomplish the mission.

Define the conditions under which to

accomplish the task.

Step 1 - Identify Mission Task(COMDTINST 3500.3, Encl 1)





A sse ss R isks



THE MISSION ANALYSIS

UNDERSTANDING THE FLOW OF EVENTS

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!

MISSION ANALYSISAdvance Rescue Ops

Beach party on scene.Launch aircraft.Enroute considerations.Approach to water.“Survivor” & RS events.Aircraft Switch-OutSubsequent ScenariosRecovery all elements

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.

Step 2 - Identify the Hazards(COMDTINST 3500.3, page 4)





A sse ss R isks



HAZARD ANALYSIS

What can go wrong?

Focus on the criticalcomponents of your mission:

•Equipment•Personnel/Experience•Environment•Timeline

OVERALL MISSION

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?

Step 3 - Assess the Risks

The Process

which associates

“hazards

with

“risks”.M o n ito r S itu a tion




A sse ss R isks



HAZARD VERSUS RISK

HAZARDA description of a condition that can impair mission accomplishment. No indication of its mission significance.

RISK

A hazard for which we haveestimated the severity,probability, and exposure to determine the scope with which it can impact our mission.

ASSESS RISKS

SEVERITY - What are the effects?

PROBABILITY - Can this happen to us?

EXPOSURE - What is the event frequency or degree of involvement?

SEVERITY

MissionManMachine/Materiel

Potential Consequences measured in terms of degree of impact on:

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.

PROBABILITY

Likelihood that potential consequences will occur:Very likely to happen Likely, greater than 50% chanceOccasional, about 50-50 chanceUnlikely under normal conditionsRemote under any conditions

Acknowledge “uncertainty”

EXPOSURE

Duration/repetition/number of people &/or equipment involved in event:GreatAbove AverageAverageNone or below average

THE RISK PRIORITY LIST

Biggest hazard

Least hazardworthy of action

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.

USCG Aviation Risk AssessmentModel

Simplifies SPE assessment through use of

Green Amber Red (GAR) Model

D a t e : _ _ _ _ _ _ _ M i s s i o n : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

8 6 2 4 3 2 4 0L o w M e d i u m H i g h

R i s k A s s e s s m e n tR e v i e w q u e s t i o n s a n d c i r c l e t h e s c o r e a c c o r d i n g t oc u r r e n t l y a v a i l a b l e i n f o r m a t i o n . S c o r e i t e m s a c c o r d i n g t ot h e e x a m p l e s g i v e n a n d i n s t i n c t s . A b s e n c e o f d a t aa u t o m a t i c a l l y s e t s t h e s c o r e t o m a x i m u m p o i n t v a l u e .

P l a n n i n g : T h o r o u g h n e s s o f p r e - m i s s i o n p l a n n i n g . F a c t o r s w h i c h i n c r e a s e r i s k , B - 0 r e s p o n s ea s s e t s , i n - f l i g h t d i v e r t o f a s s e t .

A d e q u a t e M i n i m a l N o n eh

1 2 3 4 5

E v e n t : R e f e r s t o m i s s i o n c o m p l e x i t y a n d g u i d a n c e o r d o c t r i n e a v a i l a b l e . F a c t o r s w h i c h m a y i n c r e a s er i s k : s k e t c h y d e t a i l s o r n o n - s t a n d a r d m i s s i o np r o f i l e .

C l e a r G u i d a n c e C o m p l e x /I n n o v a t i o n R e q u i r e d

h1 2 3 4 5

A s s e t : S e l e c t i o n o f a p p r o p r i a t e r e s o u r c e s . F a c t o r s t h a t e f f e c t r i s k : t i m e a t u n i t , u n f a m i l i a r w / O P a r e a , f a t i g u e ,f l i g h t t i m e ( t o t a l t i m e & t i m e i n t y p e ) , c r e w r e s t , 5 1 8 1 ’ s ,r e q u e s t o r ’ s k n o w l e d g e o f a s s e t c a p a b i l i t i e s .

A . P i l o t s

E x c e l l e n t A d e q u a t e M a r g i n a lh

1 2 3 4 5

B . A i r c r e wE x c e l l e n t A d e q u a t e M a r g i n a l

h1 2 3 4 5

C . A i r f r a m e / R e s o u r c e s

F u l l y M i s s i o n P a r t i a l l y M i s s i o nC a p a b l e C a p a b l e

h1 2 3 4 5

C o m m u n i c a t i o n s : A b i l i t y t o m a i n t a i n c o m m s t h r o u g h o u t m i s s i o n . F a c t o r s : i n t e r n a l w / c o m m a n d a n de x t e r n a l w / c u s t o m e r .

A d e q u a t e M a r g i n a l N o n eh

1 2 3 4 5

E n v i r o n m e n t : E x t e r n a l c o n d i t i o n s u r r o u n d i n g m i s s i o n : W e a t h e r , n i g h t , i l l u m i n a t i o n , m o u n t a i n o u s s e as t a t e , t e r r a i n , c u t t e r b a s e d , a l t e r n a t e a i r f i e l d s ,w a t e r t e m p , o n - s c e n e c o v e r .

B e n i g n M a r g i n a l H a z a r d o u sh

2 4 6 8 1 0

A d d t h e v a l u e s f o r e a c h R i s k A s s e s s m e n t a n d p l o tt h e f i n a l R i s k A s s e s s m e n t o n g r a p h b e l o w ( i n c l u d er e - a s s e s s m e n t f r o m S t e p 2 ) .

R i s k M a n a g e m e n tR i s k M a n a g e m e n t i s t h e d e c i s i o n t o c o n t r o l o r r e d u c eh a z a r d s . B e l o w a r e C o n t r o l O p t i o n s t o a s s i s t i n r i s kc o n t r o l o r r e d u c t i o n . R e v i e w t h e o p t i o n s a n d r e a s s e s s t h er i s k s a s a p p r o p r i a t e .

S p r e a d - o u t – D i s p e r s e t h e r i s k b y l a u n c h i n g a d d i t i o n a l a i r / s u r f a c e a s s e t s .

T r a n s f e r – I f p r a c t i c a l , l o c a t e a b e t t e r s u i t e d a s s e t t o c o n d u c t t h e m i s s i o n i . e . d i f f e r e n t a i r f r a m e , s u r f a c e a s s e t , o rc r e w .

A v o i d – C i r c u m v e n t h a z a r d : W a i t f o r r i s k t o s u b s i d e i . e . w a i t u n t i l d a y l i g h t o r w e a t h e r p a s s e s .

A c c e p t – I n s o m e c a s e s t h e b e n e f i t m i g h t j u s t i f y t h e a s s u m p t i o n o f r i s k . I n t h e s e c a s e s a d e c i s i o n t o a c c e p t r i s km a y b e m a d e w i t h t h e s t i p u l a t i o n t h a t r i s k i s r e e v a l u a t e d a st h e m i s s i o n p r o g r e s s . ( N o a d j u s t m e n t t o R i s kA s s e s s m e n t )

R e d u c e – R e d u c e o r l i m i t r i s k e x p o s u r e : A d d i t i o n a l P R E C O M / E X C O M , b r i n g i n f r e s h o r m o r e e x p e r i e n c e dc r e w .

R e - a s s e s s S t e p 1 V a l u e s

R i s k v s . G a i n

L o w G a i n – S i t u a t i o n w i t h i n t a n g i b l e b e n e f i t s o r a l o wp r o b a b i l i t y f o r p r o v i d i n g c o n c r e t e r e s u l t s . E x a m p l e si n c l u d e p a s s e n g e r t r a n s p o r t , n o n - c r i t i c a l l o g i s t i c s m i s s i o n s ,P A O d e m o n s t r a t i o n f l i g h t , e t c .

M e d i u m G a i n – S i t u a t i o n t h a t p r o v i d e s i m m e d i a t e ,t a n g i b l e b e n e f i t s . E x a m p l e s i n c l u d e s a v i n g p r o p e r t y ,p r o t e c t i n g t h e e n v i r o n m e n t , d e t e r r i n g i l l e g a l o p e r a t i o n s .

H i g h G a i n – S i t u a t i o n t h a t p r o v i d e s i m m e d i a t e , t a n g i b l eb e n e f i t s t h a t i f i g n o r e d c o u l d r e s u l t i n l o s s o f l i f e .E x a m p l e s i n c l u d e U r g e n t S A R a n d M E D E V A C s .

G i v e n t h e m i s s i o n d e s c r i p t i o n a b o v e , w h a t i s t h e “ G a i n ”f o r t h i s m i s s i o n ?

V s .

R i s k A s s e s s m e n t G a i n( H i / M e d / L o ) ( H i / M e d / L o )

U s e t h e R i s k v s . G a i n C h a r t o n t h e n e x t p a g ef o r a r e c o m m e n d a t i o n o n h o w t o p r o c e e dw i t h t h e m i s s i o n .

Use Risk Priority List - Attack “Worst First”

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?





A sse ss R isks



Mission Priority & Time Criticality Often Drive Options

S.T.A.A.R

Spread OutTransferAvoidAcceptReduce

IDENTIFY OPTIONS

Equates to “Reality Check”

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

D a t e : _ _ _ _ _ _ _ M i s s i o n : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

8 6 2 4 3 2 4 0L o w M e d i u m H i g h

R i s k A s s e s s m e n tR e v i e w q u e s t i o n s a n d c i r c l e t h e s c o r e a c c o r d i n g t oc u r r e n t l y a v a i l a b l e i n f o r m a t i o n . S c o r e i t e m s a c c o r d i n g t ot h e e x a m p l e s g i v e n a n d i n s t i n c t s . A b s e n c e o f d a t aa u t o m a t i c a l l y s e t s t h e s c o r e t o m a x i m u m p o i n t v a l u e .

P l a n n i n g : T h o r o u g h n e s s o f p r e - m i s s i o n p l a n n i n g . F a c t o r s w h i c h i n c r e a s e r i s k , B - 0 r e s p o n s ea s s e t s , i n - f l i g h t d i v e r t o f a s s e t .

A d e q u a t e M i n i m a l N o n eh

1 2 3 4 5

E v e n t : R e f e r s t o m i s s i o n c o m p l e x i t y a n d g u i d a n c e o r d o c t r i n e a v a i l a b l e . F a c t o r s w h i c h m a y i n c r e a s er i s k : s k e t c h y d e t a i l s o r n o n - s t a n d a r d m i s s i o np r o f i l e .

C l e a r G u i d a n c e C o m p l e x /I n n o v a t i o n R e q u i r e d

h1 2 3 4 5

A s s e t : S e l e c t i o n o f a p p r o p r i a t e r e s o u r c e s . F a c t o r s t h a t e f f e c t r i s k : t i m e a t u n i t , u n f a m i l i a r w / O P a r e a , f a t i g u e ,f l i g h t t i m e ( t o t a l t i m e & t i m e i n t y p e ) , c r e w r e s t , 5 1 8 1 ’ s ,r e q u e s t o r ’ s k n o w l e d g e o f a s s e t c a p a b i l i t i e s .

A . P i l o t s

E x c e l l e n t A d e q u a t e M a r g i n a lh

1 2 3 4 5

B . A i r c r e wE x c e l l e n t A d e q u a t e M a r g i n a l

h1 2 3 4 5

C . A i r f r a m e / R e s o u r c e s

F u l l y M i s s i o n P a r t i a l l y M i s s i o nC a p a b l e C a p a b l e

h1 2 3 4 5

C o m m u n i c a t i o n s : A b i l i t y t o m a i n t a i n c o m m s t h r o u g h o u t m i s s i o n . F a c t o r s : i n t e r n a l w / c o m m a n d a n de x t e r n a l w / c u s t o m e r .

A d e q u a t e M a r g i n a l N o n eh

1 2 3 4 5

E n v i r o n m e n t : E x t e r n a l c o n d i t i o n s u r r o u n d i n g m i s s i o n : W e a t h e r , n i g h t , i l l u m i n a t i o n , m o u n t a i n o u s s e as t a t e , t e r r a i n , c u t t e r b a s e d , a l t e r n a t e a i r f i e l d s ,w a t e r t e m p , o n - s c e n e c o v e r .

B e n i g n M a r g i n a l H a z a r d o u sh

2 4 6 8 1 0

A d d t h e v a l u e s f o r e a c h R i s k A s s e s s m e n t a n d p l o tt h e f i n a l R i s k A s s e s s m e n t o n g r a p h b e l o w ( i n c l u d er e - a s s e s s m e n t f r o m S t e p 2 ) .

R i s k M a n a g e m e n tR i s k M a n a g e m e n t i s t h e d e c i s i o n t o c o n t r o l o r r e d u c eh a z a r d s . B e l o w a r e C o n t r o l O p t i o n s t o a s s i s t i n r i s kc o n t r o l o r r e d u c t i o n . R e v i e w t h e o p t i o n s a n d r e a s s e s s t h er i s k s a s a p p r o p r i a t e .

S p r e a d - o u t – D i s p e r s e t h e r i s k b y l a u n c h i n g a d d i t i o n a l a i r / s u r f a c e a s s e t s .

T r a n s f e r – I f p r a c t i c a l , l o c a t e a b e t t e r s u i t e d a s s e t t o c o n d u c t t h e m i s s i o n i . e . d i f f e r e n t a i r f r a m e , s u r f a c e a s s e t , o rc r e w .

A v o i d – C i r c u m v e n t h a z a r d : W a i t f o r r i s k t o s u b s i d e i . e . w a i t u n t i l d a y l i g h t o r w e a t h e r p a s s e s .

A c c e p t – I n s o m e c a s e s t h e b e n e f i t m i g h t j u s t i f y t h e a s s u m p t i o n o f r i s k . I n t h e s e c a s e s a d e c i s i o n t o a c c e p t r i s km a y b e m a d e w i t h t h e s t i p u l a t i o n t h a t r i s k i s r e e v a l u a t e d a st h e m i s s i o n p r o g r e s s . ( N o a d j u s t m e n t t o R i s kA s s e s s m e n t )

R e d u c e – R e d u c e o r l i m i t r i s k e x p o s u r e : A d d i t i o n a l P R E C O M / E X C O M , b r i n g i n f r e s h o r m o r e e x p e r i e n c e dc r e w .

R e - a s s e s s S t e p 1 V a l u e s

R i s k v s . G a i n

L o w G a i n – S i t u a t i o n w i t h i n t a n g i b l e b e n e f i t s o r a l o wp r o b a b i l i t y f o r p r o v i d i n g c o n c r e t e r e s u l t s . E x a m p l e si n c l u d e p a s s e n g e r t r a n s p o r t , n o n - c r i t i c a l l o g i s t i c s m i s s i o n s ,P A O d e m o n s t r a t i o n f l i g h t , e t c .

M e d i u m G a i n – S i t u a t i o n t h a t p r o v i d e s i m m e d i a t e ,t a n g i b l e b e n e f i t s . E x a m p l e s i n c l u d e s a v i n g p r o p e r t y ,p r o t e c t i n g t h e e n v i r o n m e n t , d e t e r r i n g i l l e g a l o p e r a t i o n s .

H i g h G a i n – S i t u a t i o n t h a t p r o v i d e s i m m e d i a t e , t a n g i b l eb e n e f i t s t h a t i f i g n o r e d c o u l d r e s u l t i n l o s s o f l i f e .E x a m p l e s i n c l u d e U r g e n t S A R a n d M E D E V A C s .

G i v e n t h e m i s s i o n d e s c r i p t i o n a b o v e , w h a t i s t h e “ G a i n ”f o r t h i s m i s s i o n ?

V s .

R i s k A s s e s s m e n t G a i n( H i / M e d / L o ) ( H i / M e d / L o )

U s e t h e R i s k v s . G a i n C h a r t o n t h e n e x t p a g ef o r a r e c o m m e n d a t i o n o n h o w t o p r o c e e dw i t h t h e m i s s i o n .

Risk vs Gain

High Gain Medium Gain Low Gain

LowRisk

Accept the Mission.Continue to monitorRisk Factors, ifconditions or missionchanges.

Accept the Mission.Continue to monitorRisk Factors, ifconditions or missionchanges.

Accept the Mission. Re-evaluate Risk vs. Gain,should Risk Factorschange.

MediumRisk

Accept the Mission.Continue to monitorRisk Factors andemploy ControlOptions whenavailable.

Accept the Mission.Continue to monitorRisk Factors andemploy ControlOptions whenavailable.

Accept the Mission.Continue to monitorRisk Factors andactively pursue ControlOptions to reduce Risk.

HighRisk

Accept the Missiononly with Commandendorsement.Communicate Risk vs.Gain to Chain ofCommand. Activelypursue ControlOptions to reduce Risk.

Accept the Missiononly with Commandendorsement.Communicate Risk vs.Gain to Chain ofCommand. Activelypursue ControlOptions to reduce Risk.

Do not Accept theMission. Communicateto Chain of Command.Wait until Risk Factorschange or ControlOptions warrant.

Step 6. Execute Decision

Control Options must be implemented

Decision Rational must be communicated

Facilitates S.A. regarding Risk Management process





A sse ss R isks



Failure to respond to changes can become Links in the Mishap Chain

Step 7. Monitor Situation

Insure Control Options are effective

ID changes requiring further RA/RM

Capture “Lessons Learned” M o n ito r S itu a tion




A sse ss R isks



Questions?

USING THE 7-STEP PROCESS LEVELS OF EFFORT

Little:- Time- Complexity- Risk

Lot of:- Time- Complexity- Risk

“TIME CRITICAL” “DELIBERATE” “STRATEGIC”

ORM is applied ORM is applied proportionateproportionate to operational complexity, to operational complexity,

criticality, and risk!criticality, and risk!

operational risk management (orm). objectives à describe what orm is and why the uscg is using it....

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