1. OPERATIONAL RISK MANAGEMENT (ORM)

2. OBJECTIVES Describe what ORM is and why the USCG is using it.
Describe when and why to apply ORM.
Use the seven step USCG ORM process.
Use USCG ORM tools and job aids.

3. WHAT IS OPERATIONAL RISK MANAGEMENT (ORM)?
A systematic approach to optimizing risk to support best mission outcomes.
A specific seven step process supported with tools and job aids.

4. USCG ORM VISION
“Increase mission success while reducing the risk to personnel, resources and the environment…”
“Change from a compliance based to a risk-based philosophy…”
“Provide logical process to identify & exploit opportunities producing greatest return on our investment…”

5. WHY IMPLEMENT ORM?
ORM applications are proven to offer mission supportive breakthrough potential.
Force reductions make every USCG person and item of equipment more critical to mission success.
ORM can significantly increase USCG operational capabilities and training realism.

6. 4 KEY ORM PRINCIPLES 1. Accept no unnecessary risks.
2. Make risk decisions at the appropriate level.
3. Accept risks when benefits outweigh costs.
4. Integrate ORM into operations and planning at all levels.
KEY POINTS:
* By understanding these key ideas, you understand the basis of ORM.
STUDENT NOTES:
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7. BUT.... NOBODY TAKES “UNNECESSARY” RISKS?
1. Accept No Unnecessary Risks
BUT.... NOBODY TAKES “UNNECESSARY” RISKS?
If all the hazards that could have been detected have not been detected then unnecessary risks are being accepted.
The single greatest advantage of ORM over traditional risk management is the consistent detection of 50%+ more hazards.

8. 2. Make Risk Decisions at the Appropriate Level
Factors below become basis of a decision-making system to guide leaders
Who has operational control & responsibility?
Who is the senior person at the scene?
Who possesses best insight into the full benefits and costs of a risk?
Who has the resources to mitigate the risk?
What level makes the most operational sense?
KEY POINTS:
* In our discussion of step four - Make Control Decisions, we will outline the procedures for building effective risk control decisions systems in your organization. These systems resolve these various factors into a consistent routine process.
STUDENT NOTES:
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9. 3. Accept Risks When Benefits Outweigh Costs.
MAINTAINING A BOLD, RISK-TAKING
ORGANIZATION IS ALWAYS A CHALLENGE.
ORM HELPS.
KEY POINTS:
* In the late 1960’s, the USAF failed to take the risks associated with realistic air-to-air combat. As a result, the kill ratio with the NV Air Force reached nearly 1 to 1. The risks were taken when Red Flag was developed.
- Result: The kill ratio quickly increased to a favorable 10 to 1 or more. ORM can assure that we never make a similar mistake.
STUDENT NOTES:
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Taking calculated risks is essential for an organization to grow and capitalize on its capabilities.

10. 4. Integrate ORM Into Operations and Planning At All Levels.
This is the one we
want!!
Loss Control
Staff Injects
Operational
Leaders Add-On
Operational
Process
Operational
Process
Operational
Process
Loss Control
Occurs Within
The Process
2-21

11. HOW WILL THE COAST GUARD IMPLEMENT ORM?
Apply the seven step ORM process and the supporting tools
In a consistently mission supportive way
Through a highly integrated and decentralized approach

12. HOW DO WE ASSURE THAT ORM IS ALWAYS MISSION SUPPORTIVE?
Target optimum mission risk, not minimum risk.
Involve operators to insure risk controls are mission supportive.
Use only the amount of ORM dictated by the risk. Low risk - less ORM, high risk - more ORM.

13. USING THE 7-STEP PROCESS THE RISK MANAGEMENT CONTINUUM
PLANNING
OPERATIONS
AFTER-ACTION
-Deliberate ORM
-Detailed Hazard ID
-Integrated
-Largely Time-Critical
-Change Analysis
-Real Time
-Highly Decentralized
-Assess Indicators
-Integration
-Feedback
We try to get
most ORM done
here
But continue the process here and here

14. WHAT IS THE SEVEN STEP ORM PROCESS?
A decision-making technique
A job aid & tool
Optimizes risk

15. Step 1 - Identify Mission Task
(COMDTINST , Encl 1)
Clearly state the mission objective.
Define what tasks are required to accomplish the mission.
Define the conditions under which to accomplish the task.

16. UNDERSTANDING THE FLOW OF EVENTS
THE MISSION ANALYSIS
UNDERSTANDING THE FLOW OF EVENTS 3
5-2

17. MISSION ANALYSIS The “MA” is a must do!
METHOD: List the events in sequence.
RESOURCES: Mission planners & operators.
COMMENTS: ORM must cover all aspects of an operation. The Mission Analysis supports that.
The “MA” is a must do! 5
5-4

18. MISSION ANALYSIS Advance Rescue Ops
Beach party on scene.
Launch aircraft.
Enroute considerations.
Approach to water.
“Survivor” & RS events.
Aircraft Switch-Out
Subsequent Scenarios
Recovery all elements 8
5-7

19. Step 2 - Identify the Hazards
(COMDTINST , page 4)
Hazard:
Any real or potential condition that can cause mission degradation, injury, illness, or death to personnel or damage to or loss of equipment or property.

20. HAZARD ANALYSIS What can go wrong? Focus on the critical
OVERALL MISSION
Focus on the critical
components of your mission:
Equipment
Personnel/Experience
Environment
Timeline
3-3

21. HAZARD ANALYSIS P.E.A.C.E. What Can Go Wrong? Planning Event Asset
Equipment
Personnel
Environment
Timeline
What Safe Guards Exist?
How Effective Are They?
P.E.A.C.E.
Planning
Event
Asset
Communication
Environment
3-9

22. Step 3 - Assess the Risks The Process which associates “hazards with
3-12

23. HAZARD VERSUS RISK HAZARD RISK A description of a condition that
can impair mission accomplishment.
No indication of its mission significance.
HAZARD
A hazard for which we have
estimated the severity,
probability, and exposure
to determine the scope
with which it can impact
our mission.
RISK
3-14

24. ASSESS RISKS SEVERITY - What are the effects?
PROBABILITY - Can this happen to us?
EXPOSURE - What is the event frequency or degree of involvement?

25. SEVERITY
Potential Consequences measured in terms of degree of impact on:
Mission
Man
Machine/Materiel
3-16

26. SEVERITY CATEGORIES
CATASTROPHIC - Complete mission failure, death, or loss of system.
MAJOR - Major mission degradation, severe injury, occupational illness, or major system damage.
SIGNIFICANT - Minor mission degradation, injury, minor occupational illness, or minor system damage.
MINIMAL - Less than minor mission degradation, injury, occupational illness or minor system damage.
NONE - No impact to personnel or mission outcome.
3-17

27. Acknowledge “uncertainty”
PROBABILITY
Likelihood that potential consequences will occur:
Very likely to happen
Likely, greater than 50% chance
Occasional, about chance
Unlikely under normal conditions
Remote under any conditions
Acknowledge “uncertainty”
3-18

28. EXPOSURE
Duration/repetition/number of people &/or equipment involved in event:
Great
Above Average
Average
None or below average
3-18

29. THE RISK PRIORITY LIST
Biggest hazard
By ranking the hazards, we can work them on a worst first basis. This is vital because risk control resources are always limited and should be directed at the big problems first to assure maximum
bang for the buck.
Least hazard
worthy of action
3-21

30. USCG Aviation Risk Assessment Simplifies SPE assessment through use of
Model
Simplifies SPE assessment through use of
Green Amber Red (GAR) Model
3-20

31. 3-31

32. Use Risk Priority List - Attack “Worst First”
Step 4. Identify Options
Are risks acceptable or unacceptable?
Can we modify the mission to reduce risk?
Are any safeguards missing?
What new options should we consider?
Use Risk Priority List - Attack “Worst First” 5
5-4

33. Mission Priority & Time Criticality Often Drive Options
IDENTIFY OPTIONS
S.T.A.A.R
Spread Out
Transfer
Avoid
Accept
Reduce
Mission Priority & Time Criticality Often Drive Options
3-25

34. Step 5. Evaluate Risk vs Gain
Seek optimal risk management
Gain should balance or outweigh the Risk
Risk Decision made at lowest appropriate level
Command validates Assessment & Management
Equates to “Reality Check” 5
5-4

35. 3-31

36. Risk vs Gain
3-31

37. Step 6. Execute Decision Control Options must be implemented
Decision Rational must be communicated
Facilitates S.A. regarding Risk Management process 5
5-4

38. Step 7. Monitor Situation
Insure Control Options are effective
ID changes requiring further RA/RM
Capture “Lessons Learned”
Failure to respond to changes can become Links in the Mishap Chain 5
5-4

39. Questions?

40. USING THE 7-STEP PROCESS LEVELS OF EFFORT
“TIME CRITICAL” “DELIBERATE” “STRATEGIC”
Little:
- Time
- Complexity
- Risk
Lot of:
- Time
- Complexity
- Risk
ORM is applied proportionate to operational complexity, criticality, and risk!