Risk Management

RISK

RISK = the probability and severity of loss linked to hazards.The probability of an undesirable

outcome.

HAZARD = a condition that exists with the potential to cause injury, illness, or death of personnel; damage to or loss of equipment or property; or mission degradation.

HAZARD

RISK ASSESSMENT = the identification and assessment of hazards.

RISK ASSESSMENT

RISK MANAGEMENT

RISK MANAGEMENT = A decision making process that uses risk analysis tools to make risk informed decisions for the complex choices we face. It’s making decisions that balance risk exposure with mission benefits.

RISK vs GAIN or BENEFIT

The amount of risk of an action weighed against the potential benefit.

Risk Decision

The decision to accept, reject, or transfer

the risk(s) associated with an action.

Three Levels of Risk Management

1.Strategic

2. Deliberate

3. Time Critical

StrategicDone at 30,000 foot levelIdentifies values at riskIdentifies Course of Action alternativesEvaluates exposure, cost, and other factors among different alternatives

Course of Action chosen by agency administrator

SRA Template1. Risk Assessment

Values at Risk Probability of value being harmed Consequences of harm Potential benefits

2. Risk Analysis Comparison of Alternatives – exposure, cost

3. Risk Communication Who are the stakeholders? Who needs to know?

4. Risk Sharing Engage internally and externally as appropriate Share vertically and horizontally throughout the organization Obtain understanding, acceptance, and support for the range of

alternatives and likely decision

5. Risk Decision Document risk decision Explain rationale

6. Risk Monitoring Revise as necessary due to changing conditions

StrategyFull-perimeter containment using indirect line.

Total Prospect Area (acres) 52, 200

Prospect perimeter (chains) 3,360 chains

Planned Contingency Line (chains)

None – full perimeter containment

Estimated Incident Responder Exposure (person hours)

377,202 person hours

Estimated Cost $22.0 million

Strategy Point protection and check lines.

Total Prospect Area (acres) 17, 500

Prospect Containment Line Completed (chains)

264

Planned Contingency Line (chains)

160 chains (estimate)

Estimated Incident Responder Exposure (person hours)

72,964 person hours

Estimated Cost $ 3.9 million

Prospect #1Perimeter Control,

Contingency Checking and Monitoring

Prospect #2Full Perimeter

Control

Total Prospect Area (acres) 2,600 (estimated) 2,000 (estimated)

Prospect Containment Line (chains)

NA 600

Estimated Contingency Line (chains)

300 NA

Estimated Incident Responder Exposure (person hours)

47,436 person hours 96,348 person hours

Estimated Cost $ 2,283,260 $ 5,203,086

Deliberate A multi-step, analytical, sequential

process Linkage with strategic level - analysis

of missions that come from the strategic risk assessment’s incident objectives

Generally will be performed at the IMT level as part of the planning process

THE SEVEN STEP PROCESS

M o n ito r S itu a tion

E xe cu te D ec is ion

E va lua te R isk vs G a in

Id e n tify O p tio ns

A sse ss R isks

Id e n tify H aza rds

Id e n tify M iss ion

Risk Management Process

Define the level of risk

Define the level of probability

Define the level of severity

Is the risk level acceptable?

Can the risk be eliminated?

Can the risk be mitigated?

Can the residual risk be accepted? (if any)

Take action and continue the operation

An action is being considered

Identify hazards/consequences and assess risks

NO

NO

NOCancel the operation

YESTake action

and continue the operation

YESTake action

and continue the operation

YES

YES

Feedback andrecord the hazardidentification and assessment and risk mitigation

ICAO Safety Management Systems (SMS) Course

THE SEVEN STEP PROCESS

M o n ito r S itu a tion

E xe cu te D ec is ion

E va lua te R isk vs G a in

Id e n tify O p tio ns

A sse ss R isks

Id e n tify H aza rds

Id e n tify M iss ion

Risk Management 215A

ASSESS RISKS

SEVERITY - What are the effects?

PROBABILITY - Can this happen to us?

EXPOSURE - What is the event frequency or degree of involvement?

Negligible Marginal Critical Catastrophic

Frequent HIGH

Probable

Occasional MEDIUM

Remote

ImprobableLOW

Lik

elih

oo

d/P

rob

abil

ity

Severity

Defining Probability and Severity Levels

Severity Scale Definitions

Catastrophic Results in fatality/fatalities and/or loss of the system.

Critical Severe injury and/or major system damage.

Marginal Minor injury and/or minor system damage.

Negligible Less than minor injury/or less than minor system damage.

Likelihood/Probability Scale Definitions

FrequentIndividual

All ResourcesLikely to occur often.Continuously experienced.

ProbableIndividual

All ResourcesWill occur several times.Will occur often.

OccasionalIndividual

All ResourcesLikely to occur sometime.Will occur several times.

RemoteIndividual

All ResourcesUnlikely to occur, but possible.Unlikely but can reasonably be expected to occur.

ImprobableIndividual

All ResourcesSo unlikely, it can be assumed it will not occur.Unlikely to occur, but possible.

Residual Risk

The level of risk remaining after controls have been identified and selected.

Time Critical

Risk assessments done “on the fly” by firefighters at the ground level.

Deference to expertise.

Make risk decisions at the appropriate level.

Doctrinal approach.

Strategic

Deliberate

Time Critical

Dat

a

Tim

e

Dec

isio

n S

pac

e

STOP!

Intolerable region

Tolerable region

Acceptable region

The risk is unacceptableunder most conditions

The risk is acceptable based onmitigation

The risk is acceptable as it currently stands

Risk management is more than just an analytical process, it is a different way of communicating.

Risk Management Framework

1. Risk Assessment

2. Risk Analysis

3. Risk Communication

4. Risk Sharing

5. Risk Decision

6. Risk Monitoring

Questions?