Safety Program

Risk Management

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What is Operational Risk Management?

Simply put, Operational Risk Management (ORM) is the process of detecting, assessing, and controlling risk.  It is a logic-based, common sense approach to making calculated decisions on the various factors associated with any kind of activity.  These factors include:  human(s), machine(s), environment, management, and mission.  Because risk is inherent in CAP missions and activities, CAP officially adopted the six-step ORM process in May, 1997 as its method for evaluating the level of risk; identifying ways to control, mitigate, or eliminate risk; and making decisions on whether and how to proceed with the activity.  [Back to Top]

What is the ORM Process?

Operational Risk Management (ORM) includes six steps.  You might them instead as three two-part steps that require you to look at the OPERATION, to assess the RISK, and to MANAGE that risk.   [Back to Top]

 

 

 

OPERATIONAL CONSIDERATIONS
  • Identify the hazards:  Focus on what is at risk and list potential hazards.  A hazard is simply a condition that could cause loss.  By itself, a hazard has no implications for a particular mission.   [Back to Top]

  • Assess the risks:  Examine each hazard in terms of the mission, and determine the level of risk.  Risk is defined as probability + severity + exposure.  Managers want to deal in risk rather than hazards because hazards do not have an explicit mission connection.   [Back to Top]
Probability is the likelihood that an individual event will occur.
Severity is the expected consequence (e.g., injury, damage)
Exposure is the number of personnel or resources affected by a given event, process, or series of events.  

RISK CONTROL OPTIONS
  • Analyze risk control measures:  Determine which risks can be eliminated, reduced or controlled in some manner.  A risk control must change the risk by changing the exposure, severity or the probability of a mishap.  Controls usually cost something in terms of an investment of time or money, so it is important to prioritize.   [Back to Top]

  • Make control decisions:  This step involves two actions.  First, select the best possible risk controls.  Next, decide if those controls will assure that the benefits will outweigh the costs.  Always accept the risk when total benefits outweigh total costs.  Always reject the risk when total costs outweigh total benefits.  ORM -- the information and process -- makes the difference between a bold, prudent, decisive risk and a gamble.   [Back to Top]
The right person should make the decision at the right time, based on the right inputs.  The right person is the one who has the best grasp of the risk and the opportunity.  That means that organizational leaders should push the average risk decision down the chain of command, because the detail and understanding of the decision implications is higher.

MANAGEMENT RESPONSIBILITIES
  • Implement risk controls:  The key is to integrate risk controls completely with the associated plans, processes and operations, and to be sure that the risk control measures are clear to everyone involved.  There must be accountability, and leadership must provide support.   [Back to Top]

  • Supervise and review:  When risk controls are properly integrated, supervision is just like any other leadership action.  Review involves the systematic measurement of whether or not the benefit was worth the cost.   [Back to Top]

 

Levels of Operational Risk Management

Strategic Strategic ORM tools are used for initial system and program design, as well as for periodic review of the effectiveness of the ORM system and tools (e.g., incidents that should have been avoided).  Safety Officers should also use strategic ORM to adjust existing tools to correct any deficiencies identified in a periodic review.
Deliberate Deliberate ORM tools are used to plan meetings and major activities. These might include SARCAP, flight clinics, funded flight training periods, cadet encampments and other cadet activities, and glider operations.
Time-Critical Time-critical ORM tools are used on the spot, for events such as RedCAP air and ground operations, individual flights, and certain cadet activities.

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