OPERATIONAL
RISK MANAGEMENT
Why have ORM for NJROTC?
Summer Camp
 Drill
 PRT
 NJROTC picnic
 Orientation trip
 AMI
 Sword Teams

What we’ll cover today…
* 5-Step ORM Process
* Causes of Risk
* 4 ORM Principles
* 3 Levels of ORM
* Risk Assessment Matrix
Operational Risk Management
ORM is the process of dealing with risk
associated with NJROTC Unit operations,
which includes risk assessment, risk
decision making, and implementation of
effective risk controls.
ORM

A Decision Making Tool
Should we do this or not?


Increases Ability to Make
Informed Decisions
Reduces Risks to Acceptable
Levels
ORM Goal
The goal of ORM is to optimize
operational capability and
readiness by managing risk to
accomplish the mission with
minimal loss.
ORM Terms
ORM Terms
Hazard:
A condition with the potential
to cause personal injury or
death, property damage, or
mission degradation.
ORM Terms
Risk:
An expression of possible loss
in terms of severity and
probability.
ORM Terms
Severity:
The worst credible
consequence which can occur
as a result of a hazard.
ORM Terms
Probability:
The likelihood
that a hazard will result in a
mishap or loss.
Physical Training Example
Hazard
Risk
Bad Weather
Slipping on track
Improper Stretching Chance of
muscle strain
Before Exercise
Running on Hard
Pavement
Chance of
knee injury
ORM Terms
Control:
A method for reducing
risk for an identified hazard by
lowering the probability of occurrence,
decreasing potential severity, or
both.
ORM Terms
Risk Assessment:
The process of detecting hazards and
assessing associated risks.
ORM Process
Risk
Assessment
1. Identify Hazards
2. Assess Hazards
3. Make Risk Decisions
4. Implement Controls
5. Supervise
Causes of Risk
* Change - The “Mother” of Risk
* Resource Constraints
* New Technology
* Complexity
* Stress
* TEENAGERS!!!!
Causes of Risk
* Societal Constraints
* Environmental Influences
* Human Nature
* Speed/Tempo of Operation
* High Energy Levels
Four ORM Principles
1. Accept risk only when the benefits
outweigh the probable costs.
2. Accept no unnecessary risk.
3. Anticipate and manage risk by planning.
4. Empower and train subordinates to make
risk decisions at the right level.
ORM
Levels of Application
1. Time-critical - On the run
consideration of the 5 Steps
2. Deliberate - Application of the
complete 5-Step Process
3. In-depth - Complete 5-Step
Process with Detailed Analysis
f
Risk Assessment Matrix
When conducting a risk assessment,
you must factor in the severity of
the hazard, the probability of
occurrence, and assign a risk
assessment code to determine the
risk level.
Risk Assessment Matrix
Severity:

Category I (Critical)
Hazard may cause death, loss of
facility/asset or result in grave
damage to national interests.
Risk Assessment Matrix
Severity:

Category II (Serious)
Hazard may cause severe injury,
illness, property damage, damage
to national or service interests or
degradation to efficient use of
assets.
Risk Assessment Matrix
Severity:

Category III (Moderate)
Hazard may cause minor injury,
illness, minor property damage,
minor damage to national, service
or command interests or minor
degradation to efficient use of
assets.
Risk Assessment Matrix
Severity:

Category IV (Minor)
Hazard presents a minimal threat
to personnel safety or health,
property, national, service or
command interests or efficient use
of assets.
Risk Assessment Matrix
Probability:

Sub Category A
Likely to occur immediately or within
a short period of time. Expected to
occur frequently to an individual
item or person or continuously to a
group.
Risk Assessment Matrix
Probability:

Sub Category B
Probably will occur in time.
Expected to occur several times to
an individual item or person or
frequently to a group.
Risk Assessment Matrix
Probability:

Sub Category C
May occur in time. Can
reasonably be expected to occur
some time to an individual or
several times to a group.
Risk Assessment Matrix
Probability:

Sub Category D
Unlikely to occur.
Risk Assessment Matrix
Risk Assessment Code (RAC):
The RAC is an expression of risk
which combines hazard severity and
mishap probability. Using the matrix,
the RAC is expressed as a single
number that can be used to help
determine hazard abatement priorities.
Risk Assessment Matrix
PROBABILITY OF OCCURENCE
Likely
Probably
May
Unlikely
A
B
C
D
Critical
1
1
2
3
Serious
1
2
3
4
Moderate
2
3
4
5
Minor
3
4
5
5
S
E
V
E
R
I
T
Y
ORM vs. Non-standard Approach
Systematic
Random, Individual-Dependent
Proactive
Reactive
Integrates All Types
of Risk Into Plan
Safety As After-thought Once
Plan is Done
Common
Process Terms
Non-standard
Conscious Decision
“Can Do” Regardless of Risk
Based on Risk & Benefit
The Benefits of ORM
> Reduction in Mishaps
> Improved Mission
Effectiveness
Questions??