Risk Management

Principles of Risk Management #1

Accept no unnecessary risk

Principles of Risk Management #2

Accept risk when benefits outweigh cost

Define: Hazard

An actual or potential condition where the following can occur due to exposure to the hazard: Injury, illness, or death of personnel Damage to or loss of equipment and property Mission degradation

Principles of Risk Management #4

Anticipate and manage risk by planning

Second step of risk management

Assess hazards to determine risk

Define: Risk

Characterized by both the probability and severity of a potential loss that may result from hazards due to the presence of an enemy, adversary, or some other hazardous condition.

Purpose for risk management for the commander or leader-

Conserve lives and resources Make an informed decision Identify feasible and effective control measures Provide reasonable alternatives for mission accomplishment

RM Level: Time Critical

Consider risk while making decisions in a time-compressed situation Useful when an unplanned event occurs during the execution of a planned op or daily routine

Risk Assessment Code (RAC): 1

Critical

Hazard severity: Category III

Degraded mission capability or unit readiness Minor equip damage Minor injury or illness

Third step of risk management

Develop controls and make risk decisions

RM Level: Deliberate

Experience and brainstorming Most effective when done in a group Ex: Planning upcoming ops, reviewing SOP, training procedures, damage control

First step of risk management

Identify hazards

Fourth step of risk management

Implement controls

Define: Accident risk

Includes all operational risk considerations other than tactical risk. Includes risk to the friendly force, risk posed to civilians during an op, and an op's impact on the environment.

Degree of Probability: A

LIKELY to occur immediately or within a short period of time. Frequent or continuous.

Hazard severity: Category IV

Little or no adverse impact on mission capability or unit readiness Minimal threat to personnel safety or health

Hazard severity: Category I

Loss of ability to accomplish the mission Death or permanent total disability Major facility famage Unacceptable collateral damage

Degree of Probability: C

MAY occur in time. Expected to occur sometime.

Principles of Risk Management #3

Make risk decisions at the right level

Risk Assessment Code (RAC): 4

Minor

Risk Assessment Code (RAC): 3

Moderate

Define: Overall Residual Risk

Must be determined when more than one hazard is involved Should be determined based on the incident having the greatest residual risk Do not average the risks of all hazards

Risk Assessment Code (RAC): 5

Negligible

Degree of Probability: B

PROBABLY will occur in time. Several times.

Define: Tactical risk

Risk concerned with hazards that exist because of the presence of either the enemy or an adversary. Applies to all levels of war and across the spectrum of operations.

Risk Assessment Code (RAC): 2

Serious

Hazard severity: Category II

Significantly degraded mission capability or unit readiness Permanent partial disability

Fifth step of risk management

Supervise and evaluate

What are the two types of risk?

Tactical Risk Accident Risk

Define: Risk Assessment Code (RAC)

The point where the severity row and probability column intersect defines the level of risk

Define: Degree of Probability

The probability of a hazardous incident

Define: Risk management

The process of identifying, assessing, and controlling risks arising from operational factors and making decisions that balance risk costs with mission benefits

Define: Residual Risk

The risk remaining after controls have been selected for the hazard - true only if the controls for it are implemented

Risk Management Levels

Time critical Deliberate In-Depth

Degree of Probability: D

UNLIKELY to occur, but not impossible.

RM Level: In-Depth

Very thorough risk assessment Use of data, diagram, analysis tool, formal testing, longterm tracking of hazards