1 Operational Risk Management. 2 Overview Operational Risk Management (ORM) Definition Purpose and Goal Principles.

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Operational Risk Operational Risk ManagementManagement

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OverviewOverview

Operational Risk Management (ORM) Definition

Purpose and Goal

Principles

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Overview (Continued)Overview (Continued)

ORM Process Step 1: Identify the Hazards Step 2: Access the Risk Step 3: Analyze Risk Control Measures Step 4: Make Control Decisions Step 5: Implement Risk Controls Step 6: Supervise and Review

ORM Responsibilities

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DefinitionDefinition

ORM is a logic-based, common sense approach to making calculated decisions on human, materiel, and environmental factors before, during, and after Air Force mission activities and operations, i.e., on- and off-the-job

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Purpose and GoalPurpose and Goal

Purpose: To enable commander’s, functional managers, supervisors, and individuals to maximize operational capabilities while minimizing risks

Goal: To enhance mission effectiveness at all levels, while preserving assets and safeguarding health and welfare

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PrinciplesPrinciples

1. Accept no unnecessary risk2. Make risk decisions at the appropriate level3. Accept risk when benefits outweigh the costs4. Integrate ORM into Air Force Doctrine and Planning at all levels

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ORMORM1. Identifythe Hazards

2. Assessthe Risks

3. Analyze Risk ControlMeasures

4. MakeControlDecisions

5. Risk ControlImplement

6. Superviseand Review

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Step 1: Identify the Step 1: Identify the HazardsHazards

Any real or potential condition that can cause injury, illness, death to personnel or damage to or loss of equipment or property Purpose: Identify as many as possible

Ideas on how to identify hazards

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Step 2: Assess the RisksStep 2: Assess the Risks

Probability and severity of an undesirable event that could result from the hazard

Three Components of Risk Methods and Tools

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Investigate specific strategies and tools that reduce, mitigate, or eliminate the risk

Effective control measures reduce or eliminate one of the three components (probability, severity, or exposure) of risk

Step 3: Analyze Risk Step 3: Analyze Risk Control MeasuresControl Measures

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Step 4: Make Control Step 4: Make Control DecisionsDecisions

The earlier in the process risk controls are implemented, the cheaper the cost

Control decisions must be made at the appropriate level Safety advisors and consultants do not control

the necessary resources to implement the control decisions

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Step 5: Implement Risk Step 5: Implement Risk ControlsControls

Assets must be made available to implement to specific controls

Inform the personnel in the system of the risk management process results and subsequent decisions

To be effective, control measures must be implemented in an appropriate and understandable way

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Step 6: Supervise and Step 6: Supervise and ReviewReview

ORM process continues throughout the life cycle of the system, mission, or activity

Once controls are in place, the process must be periodically re-evaluated to ensure their effectiveness

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Step 6: Supervise and Step 6: Supervise and Review (Continued)Review (Continued)

Supervise: Monitor the operation to ensure the controls are effective and remain in place

Review: Changes in the system should be recognized, and appropriate risk management controls must be applied

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ResponsibilitiesResponsibilities

Starts with the commander Supported by the staff Implemented by the supervisors Rests with all individuals

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Operational ExampleOperational Example

RAF Lakenheath Runway needed extensive repairs Temporary operations were moving to RAF

Honnington How did the personnel safely accomplish this move with

the use of ORM?

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Questions?Questions?

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SummarySummary

Operational Risk Management (ORM) Definition

Purpose and Goal

Principles

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Summary (Continued)Summary (Continued)

ORM Process Step 1: Identify the Hazards Step 2: Access the Risk Step 3: Analyze Risk Control Measures Step 4: Make Control Decisions Step 5: Implement Risk Controls Step 6: Supervise and Review

ORM Responsibilities

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ORMORM1. Identify1. Identifythe Hazardsthe Hazards

2. Assess2. Assessthe Risksthe Risks

3. Analyze 3. Analyze Risk ControlRisk ControlMeasuresMeasures

4. Make4. MakeControlControlDecisionsDecisions

5. Risk 5. Risk ControlControlImplementImplement

6. Supervise6. Superviseand Reviewand Review

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ORM provides a logical and systematic means of identifying and controlling risk. It does, however,

require individual and organizational dedication to it’s basic precepts, along with the discipline to apply

them on a continuing basis.