OPERATIONAL OPERATIONAL RISK MANAGEMENTRISK MANAGEMENT
Why have ORM for NJROTC?Why have ORM for NJROTC? Summer CampSummer Camp DrillDrill PRTPRT
AMIAMI Sword TeamsSword Teams
NJROTC picnicNJROTC picnic Orientation tripOrientation trip
What we’ll cover today…What we’ll cover today…
* 5-Step ORM Process* 5-Step ORM Process* Causes of Risk* Causes of Risk* 4 ORM Principles* 4 ORM Principles* 3 Levels of ORM* 3 Levels of ORM* Risk Assessment Matrix* Risk Assessment Matrix
Operational Risk ManagementOperational Risk Management
ORM is the process of dealing with risk ORM is the process of dealing with risk associated with NJROTC Unit operations, associated with NJROTC Unit operations,
which includes risk assessment, risk which includes risk assessment, risk decision making, and implementation of decision making, and implementation of
effective risk controls.effective risk controls.
ORM ORM
A Decision Making ToolA Decision Making ToolShould we do this or not?Should we do this or not?
Increases Ability to Make Increases Ability to Make Informed DecisionsInformed Decisions ReducesReduces Risks to Acceptable Risks to Acceptable LevelsLevels
ORM GoalORM Goal
The goal of ORM is to optimize The goal of ORM is to optimize operational capability and operational capability and
readiness by managing risk to readiness by managing risk to accomplish the mission with accomplish the mission with
minimal loss.minimal loss.
ORM TermsORM Terms
Hazard:Hazard:
A condition with the potential A condition with the potential to cause personal injury or to cause personal injury or death, property damage, or death, property damage, or
mission degradationmission degradation..
ORM TermsORM Terms
ORM TermsORM Terms
Risk: Risk: An expression of possible loss An expression of possible loss
in terms of severity and in terms of severity and probability.probability.
ORM TermsORM Terms
Severity:Severity:
The worst The worst crediblecredibleconsequence which can occur consequence which can occur
as a result of a hazard.as a result of a hazard.
ORM TermsORM Terms
Probability:Probability:The likelihoodThe likelihood
that a hazard will result in athat a hazard will result in amishap or loss.mishap or loss.
HazardHazard RiskRisk
Bad Weather Bad Weather Slipping on trackSlipping on track
Improper StretchingImproper StretchingBefore Exercise Before Exercise
Chance ofChance ofmuscle strainmuscle strain
Running on HardRunning on HardPavementPavement
Chance ofChance ofknee injuryknee injury
Physical Training ExamplePhysical Training Example
ORM TermsORM Terms
Control:Control: A method for reducing A method for reducing
risk for an identified hazard by risk for an identified hazard by lowering the probability of occurrence,lowering the probability of occurrence,
decreasing potential severity, or decreasing potential severity, or both.both.
ORM TermsORM Terms
Risk Assessment: Risk Assessment: The process of detecting hazards and The process of detecting hazards and
assessing associated risks.assessing associated risks.
ORM ProcessORM Process
1.1. Identify HazardsIdentify Hazards
2.2. Assess HazardsAssess Hazards
3.3. Make Risk DecisionsMake Risk Decisions
4.4. Implement ControlsImplement Controls
5.5. SuperviseSupervise
RiskAssessment
RiskAssessment
Causes of RiskCauses of Risk* Change - The “Mother” of Risk* Change - The “Mother” of Risk
* Resource Constraints* Resource Constraints
* New Technology* New Technology
* Complexity* Complexity
* Stress* Stress
* * TEENAGERS!!!!TEENAGERS!!!!
Causes of RiskCauses of Risk
* * Societal ConstraintsSocietal Constraints
* Environmental Influences* Environmental Influences
* Human Nature* Human Nature
* Speed/Tempo of Operation* Speed/Tempo of Operation
* High Energy Levels* High Energy Levels
Four ORM PrinciplesFour ORM Principles
1. 1. Accept risk only when the benefits Accept risk only when the benefits outweigh the probable costs.outweigh the probable costs.
2. 2. Accept no unnecessary risk.Accept no unnecessary risk. 3. 3. Anticipate and manage risk by planning.Anticipate and manage risk by planning. 4. 4. Empower and train subordinates to make Empower and train subordinates to make
risk decisions at the right level.risk decisions at the right level.
ORMORMLevels of ApplicationLevels of Application
1.1. Time-critical - On the runTime-critical - On the run consideration of the 5 Steps consideration of the 5 Steps
2. 2. Deliberate - Application of the Deliberate - Application of the
complete 5-Step Processcomplete 5-Step Process
3. 3. In-depth - Complete 5-Step In-depth - Complete 5-Step
Process with Detailed AnalysisProcess with Detailed Analysisf
Risk Assessment MatrixRisk Assessment Matrix
When conducting a risk assessment, When conducting a risk assessment, you must factor in the severity of you must factor in the severity of
the hazard, the probability of the hazard, the probability of occurrence, and assign a risk occurrence, and assign a risk
assessment code to determine the assessment code to determine the risk level.risk level.
Risk Assessment MatrixRisk Assessment Matrix
Severity:Severity: Category I (Critical)Category I (Critical)
Hazard may cause Hazard may cause deathdeath, , lossloss of of facility/asset or result in facility/asset or result in gravegrave damagedamage to national interests. to national interests.
Risk Assessment MatrixRisk Assessment Matrix
Severity:Severity: Category II (Serious)Category II (Serious)
Hazard may cause Hazard may cause severesevere injury, injury, illness, property illness, property damagedamage, , damagedamage to national or service interests or to national or service interests or degradationdegradation to efficient use of to efficient use of assets.assets.
Risk Assessment MatrixRisk Assessment Matrix
Severity:Severity: Category III (Moderate)Category III (Moderate)
Hazard may cause Hazard may cause minorminor injury, injury, illness, illness, minorminor property damage, property damage, minorminor damage to national, service damage to national, service or command interests or minor or command interests or minor degradation to efficient use of degradation to efficient use of assets.assets.
Risk Assessment MatrixRisk Assessment Matrix
Severity:Severity: Category IV (Minor)Category IV (Minor)
Hazard presents a Hazard presents a minimalminimal threat threat to personnel safety or health, to personnel safety or health, property, national, service or property, national, service or command interests or efficient use command interests or efficient use of assets.of assets.
Risk Assessment MatrixRisk Assessment Matrix
Probability:Probability: Sub Category ASub Category A
LikelyLikely to occur to occur immediatelyimmediately or or within within a short period of timea short period of time. Expected to . Expected to occur occur frequentlyfrequently to an individual to an individual item or personitem or person or or continuously to a continuously to a groupgroup..
Risk Assessment MatrixRisk Assessment Matrix
Probability:Probability: Sub Category BSub Category B
ProbablyProbably will occur will occur in timein time. . Expected to occur several times to Expected to occur several times to an individual item or personan individual item or person or or frequently to a group.frequently to a group.
Risk Assessment MatrixRisk Assessment Matrix
Probability:Probability: Sub Category CSub Category C
MayMay occur in time. Can occur in time. Can reasonably be expected to occur reasonably be expected to occur some time to an individualsome time to an individual or or several times to a groupseveral times to a group..
Risk Assessment MatrixRisk Assessment Matrix
Probability:Probability: Sub Category DSub Category D
UnlikelyUnlikely to occur. to occur.
Risk Assessment MatrixRisk Assessment Matrix
Risk Assessment Code (RAC):Risk Assessment Code (RAC):The RAC is an expression of risk The RAC is an expression of risk which combines hazard severity and which combines hazard severity and mishap probability. Using the matrix, mishap probability. Using the matrix, the RAC is expressed as a single the RAC is expressed as a single number that can be used to help number that can be used to help determine hazard abatement determine hazard abatement priorities.priorities.
Risk Assessment MatrixRisk Assessment Matrix
PROBABILITY OF OCCURENCEPROBABILITY OF OCCURENCE
Likely Probably May UnlikelyLikely Probably May Unlikely
A B C DA B C DSS
EE
VV
EE
RR
II
TT
YY
CriticalCritical
SeriousSerious
ModerateModerate
MinorMinor
11 11 22 33
11 22 33 44
22 33 44 55
33 44 55 55
ORM ORM vs. vs. Non-standard ApproachNon-standard Approach
SystematicSystematic Random, Individual-DependentRandom, Individual-Dependent
ProactiveProactive ReactiveReactive
Integrates All TypesIntegrates All Typesof Risk Into Planof Risk Into Plan
Safety As After-thought OnceSafety As After-thought OncePlan is DonePlan is Done
CommonCommon Non-standard Non-standardProcess TermsProcess Terms
Conscious DecisionConscious Decision “Can Do” Regardless of Risk“Can Do” Regardless of RiskBased on Risk & BenefitBased on Risk & Benefit
The Benefits of ORMThe Benefits of ORM
> Reduction in MishapsReduction in Mishaps
> Improved Mission Improved Mission EffectivenessEffectiveness
Questions??Questions??