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This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ
materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in
Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
Executive Edge Track NSC Congress & Expo 2009
leading edge management:
risk management &
leading indicators
National Safety Council – 2009 Congress & Expo
Executive Edge: Session A
Technical Session 25
26 October 2009
Glenn Murray, Exxon Mobil Corporation - Safety, Security, Health & Environment
Executive Edge Track NSC Congress & Expo 2009
• effective management of safety, security, health and
environmental risk calls for a systematic approach
• management systems require on-going measurement in
order to determine their effectiveness and to facilitate
continuous improvement – leading (process) and lagging
(results) indicators
• risk management systems (and associated processes,
tools and activities) provide numerous opportunities for
the measurement of leading indicators
introduction
“You can’t manage it if you can’t
measure it . . . “
Executive Edge Track NSC Congress & Expo 2009
• key terms
• risk management
• leading indicators
• risk tolerance
• critical success factors
• review
agenda
Executive Edge Track NSC Congress & Expo 2009
• hazard = potential source of harm
• risk = function of the likelihood of an unwanted incident
combined with the severity of its potential
consequences
• leading versus lagging indicators
– activity or process-oriented
– actionable
– predictive
key terms
Executive Edge Track NSC Congress & Expo 2009
1) hazard
perception
2) hazard
identification/
recognition
3) hazard analysis/
risk assessment
4) risk
mitigation
risk management
risk management
risk perception
Executive Edge Track NSC Congress & Expo 2009
1) hazard
perception
2) hazard
identification/
recognition
3) hazard analysis/
risk assessment
4) risk
mitigation
risk management
risk management
risk perception
Executive Edge Track NSC Congress & Expo 2009
hazard perception
description
• ability to perceive or sense the condition,
situation, or scenario that presents a hazard,
e.g., see it, hear it, feel it
supporting tools, processes & procedures
• training to raise awareness and increase knowledge with respect to human
factors (HF) / ergonomics exposures
• design standards, engineering solutions to address potential HF issues
• operating, maintenance, inspection procedures that reflect HF aspects
potential leading indicators
• HF training completed vs. scheduled; effectiveness of training
• status, progress relative to updates and reviews of design standards and
procedures
Executive Edge Track NSC Congress & Expo 2009
1) hazard
perception
2) hazard
identification/
recognition
3) hazard analysis/
risk assessment
4) risk
mitigation
risk management
risk management
risk perception
Executive Edge Track NSC Congress & Expo 2009
hazard identification/recognition
description
• ability to identify or recognize the condition, situation, or scenario as a
hazard
supporting tools, processes & procedures
• hazard awareness and identification training; job-specific/skills training
• short-service worker programs (e.g., mentoring)
• hazard identification and discovery processes (e.g., job/work
• ability to assign the appropriate level of risk to a recognized
hazard/scenario
supporting tools, processes & procedures
• risk assessment training
• job safety analysis, task hazard analysis
• process hazard analysis (PHA), hazard and
operability review (HAZOP)
potential leading indicators
• risk assessment training completed vs. scheduled; effectiveness of
training
• conduct of risk assessment activities vs. plan; quality of risk assessment
processes
EA B C D
I
II
III
IV
Probability
Consequence
Executive Edge Track NSC Congress & Expo 2009
1) hazard
perception
2) hazard
identification/
recognition
3) hazard analysis/
risk assessment
4) risk
mitigation
risk management
risk management
risk perception
Executive Edge Track NSC Congress & Expo 2009
risk perception
• risk mitigation (behavior) is influenced by perceived
risk
• based on our experiences and/or knowledge
• making safer choices requires us to understand our
perception of risk
• risk tolerance - acknowledge, recognize, understand it
Executive Edge Track NSC Congress & Expo 2009
risk tolerance
• factors that tend to raise risk tolerance
• overestimating capability and experience
• familiarity
• feeling of control
• role model behaviors
• factors that tend to lower risk tolerance
• perceived seriousness of consequences
• personal experience
Executive Edge Track NSC Congress & Expo 2009
risk mitigation
description
• does the worker/team know how to and/or choose to mitigate the risk?
supporting tools, processes & procedures
• incident investigation and root cause analysis
• training
• job observation programs
• site/organizational culture surveys,
diagnostic tools
potential leading indicators
• findings from incident/near-miss investigation and root cause analysis
• ‘at-risk’ versus ‘safe’ behaviors from job observations
• learnings from culture diagnostics relative to quality of training,
competency assurance, risk tolerance, procedural discipline, etc.
• compliance with site safety rules
Executive Edge Track NSC Congress & Expo 2009
critical success factors
• risk management addressed via an integrated SH&E management
system
• structured, disciplined approach
• leading and lagging metrics woven throughout
• follow-up, closure to ensure action items are addressed and
effective
• evaluation, analysis, sharing . . . leads to learning
• line management ownership and accountability for both process
(leading indicators) and results (lagging indicators)
. . . all dependent upon effective execution . . . leadership
Executive Edge Track NSC Congress & Expo 2009
review
• ‘hazard’ versus ‘risk’
• risk management as a continuum - processes, procedures,
and tools at each step
• leading indicators to evaluate activity levels, quality of
execution
• drive behaviors, actions
• predict performance
• understand risk tolerance
• critical success factors
• integrated SSH&E management systems
• follow-up, closure
• learning
• leadership
Executive Edge Track NSC Congress & Expo 2009
risk management &
leading metrics
This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ
materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in
Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
National Safety Council – 2009 Congress & Expo
Executive Edge: Session A
Technical Session 25
26 October 2009
Glenn Murray, Exxon Mobil Corporation - Safety, Security, Health & Environment
- 46 -
Executive Edge Track NSC Congress & Expo 2009
What’s Next? Return to this room tomorrow 1:30-3:00 for
Executive Edge Session B
World-Class Leadership: Lead with Safety (Technical Session 46)