Risk Management
RISK
 RISK
= the probability and
severity of loss linked to hazards.
 The probability of an undesirable
outcome.
HAZARD
HAZARD = a condition that exists
with the potential to cause injury,
illness, or death of personnel;
damage to or loss of equipment
or property; or mission
degradation.
RISK ASSESSMENT
RISK ASSESSMENT = the
identification and assessment of
hazards.
RISK MANAGEMENT

RISK MANAGEMENT = A decision making
process that uses risk analysis tools to make
risk informed decisions for the complex
choices we face. It’s making decisions that
balance risk exposure with mission
benefits.
RISK vs GAIN or BENEFIT
The amount of risk of an action weighed
against the potential benefit.
Risk Decision
The decision to accept, reject, or transfer
the risk(s) associated with an action.
Three Levels of Risk
Management
1.Strategic
2. Deliberate
3. Time Critical
Strategic
Done at 30,000 foot level
Identifies values at risk
Identifies Course of Action alternatives
Evaluates exposure, cost, and other
factors among different alternatives
Course of Action chosen by agency
administrator
SRA Template
1. Risk Assessment




Values at Risk
Probability of value being harmed
Consequences of harm
Potential benefits
2. Risk Analysis
 Comparison of Alternatives – exposure, cost
3. Risk Communication
 Who are the stakeholders?
 Who needs to know?
4. Risk Sharing
 Engage internally and externally as appropriate
 Share vertically and horizontally throughout the organization
 Obtain understanding, acceptance, and support for the range of
alternatives and likely decision
5. Risk Decision
 Document risk decision
 Explain rationale
6. Risk Monitoring
 Revise as necessary due to changing conditions
Strategy
Full-perimeter containment using
indirect line.
Total Prospect Area (acres)
52, 200
Prospect perimeter (chains)
3,360 chains
Planned Contingency Line
(chains)
None – full perimeter containment
Estimated Incident Responder
Exposure (person hours)
377,202 person hours
Estimated Cost
$22.0 million
Strategy
Point protection and check lines.
Total Prospect Area (acres)
17, 500
Prospect Containment Line
Completed (chains)
264
Planned Contingency Line
(chains)
160 chains (estimate)
Estimated Incident Responder
Exposure (person hours)
72,964 person hours
Estimated Cost
$ 3.9 million
Prospect #1
Perimeter Control,
Contingency Checking
and Monitoring
Prospect #2
Full Perimeter
Control
Total Prospect Area (acres)
2,600 (estimated)
Prospect Containment Line
(chains)
NA
600
Estimated Contingency Line
(chains)
300
NA
Estimated Incident
Responder Exposure (person 47,436 person hours
hours)
Estimated Cost
$ 2,283,260
2,000 (estimated)
96,348 person hours
$ 5,203,086
Deliberate
 A multi-step, analytical, sequential
process
 Linkage with strategic level - analysis
of missions that come from the
strategic risk assessment’s incident
objectives
 Generally will be performed at the IMT
level as part of the planning process
THE SEVEN STEP PROCESS
Identify Mission
Identify Hazards
Assess Risks
Identify Options
Evaluate Risk vs Gain
Execute Decision
Monitor Situation
Risk Management Process
Feedback and
record the hazard
identification and
assessment and
risk mitigation
An action is being considered
Identify hazards/consequences
and assess risks
Define the level
of probability
Define the level
of severity
Define the level of risk
Take action
and continue
the operation
YES
Is the risk level acceptable?
NO
Take action
and continue
the operation
YES
Can the risk be eliminated?
NO
YES
Can the risk be mitigated?
YES
Can the residual risk be
accepted? (if any)
Take action
and continue
the operation
ICAO Safety Management Systems (SMS) Course
NO
Cancel the
operation
THE SEVEN STEP PROCESS
Identify Mission
Identify Hazards
Assess Risks
Identify Options
Evaluate Risk vs Gain
Execute Decision
Monitor Situation
Risk Management 215A
ASSESS RISKS
SEVERITY - What are the effects?
PROBABILITY - Can this happen to us?
EXPOSURE - What is the event frequency
or degree of involvement?
Likelihood/Probability
Severity
Negligible
Marginal
Catastrophic
HIGH
Frequent
Probable
MEDIUM
Occasional
Remote
LOW
Improbable
Critical
Defining Probability and Severity Levels
Severity Scale Definitions
Catastrophic
Critical
Results in fatality/fatalities and/or loss of the system.
Severe injury and/or major system damage.
Marginal
Minor injury and/or minor system damage.
Negligible
Less than minor injury/or less than minor system damage.
Likelihood/Probability Scale Definitions
Frequent
Individual
Likely to occur often.
All Resources Continuously experienced.
Probable
Individual
Will occur several times.
All Resources Will occur often.
Occasional
Individual
Likely to occur sometime.
All Resources Will occur several times.
Remote
Individual
Unlikely to occur, but possible.
All Resources Unlikely but can reasonably be expected to occur.
Improbable
Individual
So unlikely, it can be assumed it will not occur.
All Resources Unlikely to occur, but possible.
Residual Risk
The level of risk
remaining after controls
have been identified
and selected.
Time Critical
 Risk assessments done “on the fly”
by firefighters at the ground level.
 Deference to expertise.
 Make risk decisions at the
appropriate level.
 Doctrinal approach.
Decision Space
Time Critical
Data
Deliberate
Time
Strategic
STOP!
Intolerable region
Tolerable region
Acceptable
region
The risk is
unacceptable
under most
conditions
The risk is
acceptable
based on
mitigation
The risk is
acceptable as it
currently stands
Risk management is more than just an analytical
process, it is a different way of communicating.
Risk Management Framework
1. Risk Assessment
2. Risk Analysis
3. Risk Communication
4. Risk Sharing
5. Risk Decision
6. Risk Monitoring
Questions?