Breaking down some of the industry's most used terms into consistent, understandable language.
In this article, Dr. Cattani discusses some of the frequently used terms in safety management and puts them in the context of an organisation's progress through time.
There are a few terms in risk management which really help our understanding of how to progress towards our desired future state. I would like to introduce you to some of the fundamentals, which I hope help you on your journey to improved performance.
First of all I want you to imagine that you are about to start a journey of improvement of your level of risk. To understand your performance we will look at two things, risk and time. In fact time will look after itself, we will just monitor risk over time!
In this graph you can see what I mean. The axis are labelled risk and time. Time progresses towards the right, and risk increases up the scale.
The red line is interesting, as it shows there has been a change in the level of risk. On the left the risk was about half way up the risk scale, then it dropped, and then went up again.
As the red line exceeds half way which was the previous highest level of risk, it may start to get attention.
For example, as a result of the risk being relatively high events such as incidents may occur more regularly. This eventually causes the organisation to do something about it. They have had enough and want to improve their control of risk.
When they decide they have had enough of the level of risk, they have defined the “tolerated” level of risk. Tolerated risk is the level of risk at which the organisation changes its behaviour, to reduce the level of risk. They do not want the level of risk to be in the untolerated region.
To work out what they need to do to reduce the level of risk they need to look at two things.
Firstly the red arrow, which ‘supports’ the risk line indicates the amount of risk in the business. This is known as the residual risk. If we can reduce the residual risk the level of risk will come down.
Secondly, they need to look at the green arrow, as this indicates their effectiveness to control risk. If they are more effective at controlling risk, there is pressure down onto the level of risk, and the level of risk goes down. This is the sustaining risk.
You can see how the length of the arrows changes together. In effect the level of risk is the result of the residual risk and the sustaining risk. We need the residual risk to be low, which means the sustaining risk arrow is longer. There is a partnership between them.
Our analysis of the performance leads us to understand all the reasons or ‘contributing factors’ for the length of the red and yellow arrows. We look at the changes over time and work out what has happened.
Over time the effectiveness of controls reduced (green arrow) and the residual risk increased.
By understanding the reasons or contributing factors for the level of risk, we can develop a series of improvement actions, known as risk treatments, to bring the level of risk down.
As more risk treatments are implemented, the level of residual risk reduces.
Once the risk treatments are in place and the level of risk is below the tolerated level, the sustaining actions must continue to ensure the residual risk does not increase. In addition, to ensure the continual improvement in the level of risk, further work is undertaken to improve performance further.
The aim for organisation is to manage the level of risk 'as low as reasonably practicable', known as ALARP.
To achieve ALARP the organisation must progressively manage the level of risk. It does this by implementing risk treatments, and, also by reducing the tolerated level of risk.
By reducing the tolerated level of risk (i.e. box 2), a new series of investigations and risk treatments are identified.
Managing the tolerated level of risk is the role of the Senior Leadership Team (i.e. they set the standards in the organisation).
Managing the sustaining actions is the role of the operational management team.
Managing the residual risk is the role of the technical advisors (i.e. for injury risk this would be the safety team).