Delivering Integrated, Sustainable,
Water Resources Solutions
Institute for Water Resources
2010
Integrated Risk Management
Charles Yoe, PhD
cyoe1@verizon.net
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Learning Objectives
• At the end of this session participants will
be able to:
– Define and discuss risk
– Discuss risk management
– Identify and discuss the elements of the risk
management model proposed for the Corps
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Risk
• Risk is a measure of the probability and
consequence of uncertain future events
• Risk includes
– Potential for gain (opportunities)
– Exposure to losses (hazards)
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Risks of Interest
• Existing-risk to life and safety, property
damage, et al
• Risk reduction-what can we avoid,
prevent, mitigate
• Residual risk-what remains after
mitigation, flood hazard that remains
• Transformed risk-slow rise in floodwaters
to catastrophic overtopping
• Transferred risk-induced flooding
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Risk Management
• Essentially, making
decisions under
uncertainty
• Planning, analyzing,
organizing,
implementing and
monitoring efforts to
control the effects of
uncertainty on the
Corps’ Civil Works
Program
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Risk Management-Informally
• What is the problem?
• What questions do we
want risk assessment
to answer?
• What can be done to
reduce the impact of
the risk described?
• What can be done to
reduce the likelihood
of the risk described?
• What are the tradeoffs of available
options?
• What is the best way
to address the
described risk?
• Is it working?
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Working Definition
• Risk management is the process of
problem finding and initiating action
to identify, evaluate, select,
implement, monitor and
modify actions taken to alter levels of
risk, as compared to taking no
action.
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Lake siltation
Allocating O&M resources
IPET
in District
Post-disaster work
Managing construction
Complex FRM or other
projects
investigations
Annual budget/programs
Landscape
scale studies
Consequence
of Being Wrong
management
Feasibility
studies
e.g. CERP
Personnel
assignments
Reconn
Studies
Project
Climatedesign
change Grave
Routine
purchases
Allocating
inspection
Emergency Management
Data collection
resources
activities
Some permit
applications
Extensive
Analysise.g.,
Special Risk
programs,
Routine
Risk Analysis
W/ Adaptive Management
Routine coordination
noxious weeds
activities
Dam safety program
Much
Little
Administrative
activities
Flood risk management
Budget updates
Corporate budget
Congressionals
When To Do Risk Analysis
Uncertainty
Modest Level of Risk
Analysis
No Risk Analysis
Required
Minor
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The Job!
• Risk managers are responsible for risk
analysis
– Identify or validate problems
– Make sure risk communication takes place
– Ask questions of staff, which when answered,
provides the information they need to make
decisions
– Manage risks that are not acceptable
– Make sure mitigation is working
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Characteristics of Integrated Risk
Management
•
•
•
•
•
•
•
Universal Applicability-horizontal & vertical
Analytically-based and judgment-driven
Simple and Flexible
Systematic and Scalable
Iterative
Transparent and Open
Documented
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Analyze Risks
Evaluate Risks
Risk Mitigation
COE Risk Management
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Monitor, Evaluate, Modify
Identify Risks
Risk Assessment
Consult, Communicate and
Collaborate
Establish Decision Context
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Establish Decision Context
Description
•
This task establishes the
decision context in which a risk
management decision will be
made. It includes defining the
management problem, and
establishing the measurable
objectives of the activity to
which the risk management
process is being applied.
Decision making criteria,
evident uncertainties, and the
questions to be answered in
subsequent analytical steps are
identified in this step.
Outputs
• A written problem
statement
• A written statement of
the activity’s objectives
• A written list of
management
information questions
• A written list of the
decision criteria
• A written list of the key
uncertainties
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Establish Decision Context
• Something triggers RM activity
• Decision problem is defined
• Goals, objectives, and strategies of RM
identified and articulated
• Decision criteria explicitly considered so
appropriate information is gathered
• Stakeholder and public involvement
begins
Establish Decision Context
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Defining a Problem
• Problem identification-recognizing a
problem exists
• Problem acceptance-deciding to focus
attention and resources on it
• Problem representation-articulating the
problem for the Corps and others and
linking it to possible solutions
Establish Decision Context
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Identify Risks
Description
• Identify the risks relevant to
the decision context. This
means identifying but not
yet quantifying the
consequences (positive or
negative) and likelihoods
and how they will be
expressed. It includes
asking and answering “what
can go wrong” and “how can
it happen” about the
problem setting.
Outputs
• A narrative description
of the risks or
significant uncertainties
of concern to this risk
management activity.
• A decision whether or
not to pursue a risk
assessment.
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Tasks
• Start of risk
assessment when one
is done
• Identify
– Presenting/existing
risks
– Risk reductions
– Residual risks
– Risk
transformations
– Risk transfers
Identify Risks
• Ask and answer
(scenarios)
– What can go
wrong?
– How can it happen?
• Methods depend on
nature of activity,
process, or asset
• Stakeholder and
public involvement
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Analyze Risks
Description
Outputs
•
• Written answers to the risk
managers’ questions with a
focus on relevant
uncertainties
• Descriptions of formulated
alternative risk mitigation
strategies
• Risk characterization of each
significant risk with a focus
on relevant uncertainties
• Formal risk assessment if
required
Estimate the consequences and
likelihoods of the risks
identified in the previous step.
At the same time recognize and
report decision
critical uncertainties and
incorporate them as a source of
risk. The consequence and
likelihood for each risk may be
combined to produce an
estimated level of risk.
Alternative management
strategies are analyzed in this
step. This is often the principle
analytical step in the risk
management process.
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Analyze Risks
• Remainder of risk assessment
• Each individually identified risk is
analyzed
– Gather information
– Identify and assess significant sources of
uncertainty
– Identify options for achieving RM objectives
and solving the problems
– Evaluate and compare risk management
options while accounting for uncertainty
Analyze Risks
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Evaluate Risks
Description
Outputs
• Risk management
alternatives are evaluated
and compared to identify the
best solution. This
evaluation includes
consideration of the risk and
other values important to the
decision. The evaluation
will consider the cost to
reduce increments of risk;
who bears the risk; what
risks are managed, reduced,
borne, transferred, and so
on.
• An effective summary or
display of the uncertainties
most relevant to the risk
manager’s decision
• Display of the varying
contributions of the risk
management options to the
risk management objectives
and other social values
considered in the decision
process
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Evaluate Risks
• Is the risk acceptable?
• With stakeholder and
public input reduce
unacceptable risks to a
tolerable level
• Tolerance is based on
trade-off among residual
risk, cost of risk reduction
and other factors
Evaluate Risks
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Risk Management Decision
Description
Outputs
•
• Determination of a tolerable
level of risk for this risk
management issue
• Selection of the best risk
management option
• Identification of measurable
desired outcomes to monitor
the option’s success
• When appropriate, an
adaptive management plan
• An implementation plan
• An implemented plan
A decision is made to accept or
take action to manage the identified
risks. If action is taken, a risk
management strategy is developed
and implemented. Desired and
measurable outcomes of the
management strategy are identified
at this step so the success of the
plan can be monitored and
evaluated. To the extent there is
significant analytical uncertainty,
the risk management strategy will
include an adaptive management
plan to reduce such uncertainties
over time and as needed modify the
execution of the actions taken.
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Risk Mitigation
• Reduce unacceptable risks to TLR
– Combinations of options may be needed
• RM plan should identify mitigation
measures, responsibilities, schedules,
expected outcomes, and measurements
associated with mitigation strategy
• It’s critically important to identify desired
outcomes of RM strategy prior to
implementation
Risk Mitigation
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Risk Management Strategies
More Specific
General Strategies
•
•
•
Accept
Manage
–
–
–
–
–
Avoidance
Reduce probability of
event (prevent)
Reduce consequence of
event (mitigate)
Insurance
Retain the risk
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Build confidence and
trustworthiness
• Involve affected people
• Deliberation
• Accountability
• Continuous research
• Reduce uncertainties
• Clarify facts
• Transfer
• Transformation
• Development of substitutes
• Containment
• Increasing resilience–surprises do
less harm
• Precautionary principle
• Constant monitoring
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• Adaptive
management
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Who Owns the Risk
• Many risks are shared ownership
–
–
–
–
Corps
Non-federal partners
Stakeholders
The public
• All must know and accept their
responsibilities
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Communicate, Consult and Collaborate
Description
•
Active communication is an
essential part of risk analysis.
Communicate and consult with
internal and external
stakeholders as appropriate at
each stage of the process. If
there are shared risk
management decisions, they
should be identified, the
decision participants recorded
and a formal agreement
documenting the shared
responsibility for the decision
prepared and signed by all
responsible participants.
Outputs
• Preparing and
executing a public
involvement plan
including provisions for
risk communication.
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Communicate, Consult and Collaborate
• Keep all stakeholders
informed about
– Process
– Findings of risk
assessment steps
– Nature of risk and its
associated benefits
– Deliberations that lead
to risk management
decision
– Their role in
implementing the
solution
• Continual
communication
among participants to
minimize
misunderstandings
and surprises at the
end of the process
Communicate and Consult
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Monitor, Evaluate, Modify
Outputs
Description
•
There are several purposes of post
implementation monitoring. One is to
assure that there is progress toward
achieving the outcomes of the
implemented risk management strategy.
If there is an adaptive management
process there will be data collection
targeted to testing hypotheses required
to reduce analytical uncertainties
identified in the initial planning process.
This task also scans the overall setting
for the activity to identify hazards or
changes in socioeconomic preference or
conditions that may not have been
recognized during the initial risk analysis
process, or that may have changed in
their significance. In all cases, the risk
mitigation strategy may be modified in
accordance with what is learned.
• A plan for monitoring,
reviewing and
modifying the
implemented solution
• Implementation of that
plan
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Monitor, Evaluate, Modify
• Implication of
uncertainty is RM is
evolutionary decision
making
• Assure decision is
having desired
outcome
• Monitoring-gather
information that
measures progress
toward desired
outcome(s)
Monitor, Evaluate, Modify
• Information is
evaluated to
determine if adequate
progress is being
made toward
outcomes
• If outcomes are not
satisfactory changes
are needed
• A mechanism for
change, e.g. adaptive
management plan, is
part of best practice
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