OPERATIONAL
RISK
MANAGEMENT
OBJECTIVES
• Establish a common ORM language
• Train all hands on ORM basics:
– 3 application levels
– 4 ORM principles
– 5 steps of ORM process
• Group Sessions - ORM Scenario Applications
WHAT IS ORM ?
A leadership tool used to
accomplish the mission with
the least risk.
ORM GOAL
To strive for operational
readiness & effectiveness
by managing risk
to accomplish the mission
with minimal loss.
USN & USMC
SHORE/GROUND MISHAPS
USN & USMC
AVIATION MISHAPS
USN & USMC
RECREATIONAL MISHAPS
USN & USMC
SUICIDES
???
Why?
USN & USMC
PMV MISHAPS
TOP CAUSES
OF DEATHS (1995-1999)
631
Motor Vehicles
Suicide
350
258
Natural
157
Recreation
Aviation
133
Crime
111
Shore/Ground
108
Afloat
16
1,846
Deaths
NAVY/MARINE
AIRCRAFT LOSSES FY 95-99
TYPE AIRCRAFT
JETS
# LOST
106
HELOS
37
PROPS
5
TOTAL LOST
148
ORM IN SIMPLE TERMS
ORM can be as simple as
taking a few seconds to review
your current situation.
ORM IS NOT NEW
776 aircraft
destroyed in
1954
Aircraft Mishap rate
60
22 aircraft
destroyed in
1999
Angled decks
Rate 1.44
Aviation Safety Center
Naval Aviation Maintenance Program
(NAMP), 1959
RAG concept initiated
NATOPS Program, 1961
Squadron Safety program
System Safety
Designated Aircraft
ACT
50
40
30
20
10
0
50
65
80
FY
95
WHAT GOT US TO THE
PLATEAU?
• Tried and true principles:
–Leadership
–Accountability
–Creativity
NAVAL FLIGHT MISHAP
CONTRIBUTING CAUSE FACTORS
RATE PER 100K FLT HRS
3
2
Maintenance
error
Material
malfunction
Aircrew error
1
Supervisory
error
Human error
Total mishap
rate
0
93
94
95
96
FY
97
98
99
WHAT CAN WE DO TO
IMPROVE?
• Concepts that will help us break
through the plateau.
–Operational Risk Management
–Human Factors Considerations
–Technology
ORM TERMS
HAZARD
A condition with potential to
cause mission degradation,
personal injury or death, or
property damage.
ORM TERMS
RISK
An expression of the
potential impact of a hazard
in terms of
severity and probability.
ORM TERMS
SEVERITY
The worst credible
consequence which
can occur as a result
of a hazard.
SEVERITY
CATASTROPHIC
CRITICAL
MODERATE
NEGLIGIBLE
ORM TERMS
PROBABILITY
An expression of the
likelihood that a hazard
will cause mission degradation
or result in a mishap or loss.
PROBABILITY DEFINITIONS
Example Breakdown
• LIKELY to occur very soon
• PROBABLY will occur in time
• MAY occur in time
• UNLIKELY to occur
ORM TERMS
RISK ASSESSMENT
The process of evaluating
the associated risks
of identified hazards.
ORM TERMS
CONTROL
A measure for reducing risk
for an identified hazard by
lowering the probability
and/or severity.
Risk Control Desired Effect
Drive probability down
PROBABILITY
LIKELY
to occur very
soon
Drive Severity Down
SEVERITY
A
Catastrophic
I
Critical
II
Moderate
II
Neglibible
V
PROBABLY
will occur in
MAY
occur in time
UNLIKELY
C
D
time
B
RISK ASSESSMENT
to occur in
time
3 APPLICATION LEVELS
• Time Critical
– Little time, done on the run.
• Deliberate
– For situations that allow more planning.
• In Depth
– Long term process with extensive research and
planning.
4 KEY ORM
PRINCIPLES
1. Accept risks when benefits outweigh costs.
2. Accept no unnecessary risk.
3. Anticipate and manage risk by planning.
4. Make risk decisions at the right level.
5 STEP ORM PROCESS
1. Identify
Hazards
5. Supervise
4. Implement
Controls
2. Assess
Risks
3. Make Control
Decisions
CAUSES OF RISK
* Change - The “Mother” of Risk
* Resource Constraints
* New Technology
* Complexity
* Stress
* Environmental Influences
* Speed or Tempo of Ops
* Societal Constraints
* High Energy Levels
* Human Nature
CULTURAL
CHALLENGES
• Can do “anything, anywhere, anytime, at any cost”
mentality.
• “Do more with less” mindset.
• Reluctance to say “no.”
• Making decisions based on “the way we’ve always
done it.”
• Letting others worry about our mission hazards.
• Doing only what we “have to” and not what we
“should do.”
ORM TOOLS
• SHARP/SARA/SQOM
• NAMP/NATOPS/SOP’S
• ACT/GCT
• HFC/HFB
• SURVEYS (SAFETY/MCAS/CSA)
• TRAINING (Standdowns, GMT, etc.)
• ORM Corner stories in magazines
ORM Website
ORM VISION: Make ORM our
way of doing business
Three Questions:
What can happen that can hurt me or
my mission?
What am I going to do about it?
If I can’t … who am I going to tell?
TOP CAUSES
OF DEATHS (1995-1999)
631
Motor Vehicles
Suicide
350
258
Natural
157
Recreation
Aviation
1. Identify
Hazards
133
5. Supervise
Crime
111
Shore/Ground
108
Afloat
16
4. Implement
Controls
2. Assess
Risks
3. Make Control
Decisions
“And...you gotta try not to get
famous while you’re in the act.”
If there is any doubt…then
there is no doubt.
Stop what you are doing
and and brief it !!!!
Any Questions???