Risk Management

The management of risk is similar to all other attempts to manage processes, systems, and other safety and health issues. As with anything requiring managing, some elements are somewhat universal when devising a management approach. Many of the critical parts (elements) have been discussed in previous chapters of this book. Thus, the requirements for managing risk include many time-tested and successful endeavors. The saying that there is nothing new under the sun is true regarding risk management. The elements of such a program usually require tweaking of the foundational components. The components suggested in these pages can be revised, added to, or removed and still provide a workable effort. The suggestions within these pages are no more than a template for developing, improving, and implementing a risk management program.

Risk Management Components

All occupational safety and health (OSH) programs begin with the critical component of management commitment and leadership. There is no use to even proceed from this point without the aforementioned element existing since all resources, support, and authority come from this element of the effort.

Secondly, management's dictate to employees is not a solution to the goals and intent of management's undertaking no matter the good intention of any attempt to improve the work environment. Failure to include employees in developing, implementing, maintaining, and improving the overall goal of the program decreases its relevance to the workforce. Buy-in by employees is critical to success. Management needs the experience, knowledge base, and ownership in order to proceed toward leveraging the power employees possess to make management's intent successful.

Thirdly, there must be an understanding of the risk that a company faces even if no incidents or events have transpired. It is important that a risk evaluation has been completed using a risk assessment, which will help rate and rank potential risk events. Before risk can be managed, it must be recognized and accepted as having the potential to cause extensive damage (catastrophic), financial impact, long-term implications, and real business impacts, all of which can possibly threaten a business's existence.

Fourth, with risk being understood and accepted as exhibiting a potential hazard that could result in an incident with damage and loss of life, businesses must take steps to control and prevent these types of events. It is easily realized the some types of risk, due to their outcomes, require more attention than others. Some efforts to control risk are rather simplistic, while others will require larger allocation of resources. The failure to implement appropriate controls suggests the employer either does not care or fails to understand the risk involved in his/her workplace. Failure to control risk is the path to, ultimately, a businesses' failure.

Fifth, the failure of operators' performance can be considered a risk to any company process. The failure to perform may result from poor operator skill, failure of training, or poor workplace design. The development of precise performance standards is critical to a safe/healthy and productive workplace. Assuring that performance is high quality and high expectations are part of the management of risk.

Without having explicit/detailed performance standards, managers, supervisors, and employees make their own decisions on what is right versus wrong, safe versus unsafe, and good versus bad without criteria based on research, data, written directions, rules of operation, and acceptable practices, and instead rely on personal decision making. The types of performance standards that are most effective dwell on both incident prevention and resource utilization.

Performance standards should provide a clear explanation of expectations of operation, performance, and outcomes that must be managed.

Sixth, a management system is one of checks and balances, and risk must be managed similarly to anything else managed by a company. It is critical that there be a measurement system that tracks progress and identifies shortcomings, needs for improvement, and achievements. This information will provide tangible data that can be utilized to provide feedback that can facilitate the improvement and upgrading of the risk management process. If feedback is a constructive process, aimed at system improvement and upgrade, rather than a punishment or personal degradation approach, then it will be accepted as an integral part of the management approach.

Seventh, it is imperative that in this process, the positive be reinforced to strengthen what is going right and steps be taken to devise and implement corrective action. But, this is not a stopping step. It is the next step that culminates this endeavor.

Eighth, in the management trend of the day, the goal is continuous improvement (lean safety). This entails the use of all existing resources to constantly strive to improve and update all processes. This includes risk management as a part of accomplishing this goal.

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