Wading Through Risk Management & EHSS Systems: A Look at the Essentials

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Risk management is everyone’s accountability.

Alert! Alert! You hear the siren go off and you know there has been a major accident; your worst nightmare come to life. How bad is it, who’s hurt, and what’s it going to cost? All these fears rush simultaneous through your mind. Pictures of Deepwater Horizon, Fukushima and Dhaka, Bangladesh’s Tasreen Fashions all hit you before you can even begin to assess the real damage.

High-profile industries like these have led to public demands for stronger, more effective measures to protect people, property, our communities, and our environment. In response, many companies have turned to comprehensive risk management models, such as the 14 elements of OSHA’s Process Safety Management System or the Plan-Do-Check-Act framework of OHSAS 18001. As companies evaluate these types of systems, they frequently become overwhelmed. They begin to ask critical questions, such as:

  • Which framework should I follow?
  • How many elements are needed?
  • What measures should be included?
  • What are industry best practices for implementation and management?

The landscape can be very confusing when you start digging into the details. Fortunately, every management system can be distilled down to four basic components essential for managing risk, outlined below.

Identify and Understand Risk:

Implement formal and informal processes for identifying and understanding risk. Formal risk assessment processes include process hazard analysis (PHA), security vulnerability analysis, industrial hygiene and ergonomic surveys, and worst/most-probable case scenario planning. Informal risk assessment tools include job safety analysis, routine inspections and rounds, workplace observations, and an effective system for reporting and addressing workplace hazards.

Control Risk:

Once risks are identified, measures must be taken to develop and implement effective risk control. Listed in order of effectiveness and preference, risks may be managed through:

  • Elimination
  • Substitution
  • Engineering controls
  • Administrative controls
  • Behaviors
  • Personal protective equipment

Investigate, Analyze, and Learn from Failures:

Despite our best efforts, failures happen. On the bright side, failure represents one of our best opportunities to understand risk and improve control measures. However, effective learning can only occur when failures are reported and acted upon, not hidden away. An essential first step is building and maintaining an open, blameless culture that eliminates communication barriers and encourages the accurate and timely reporting of all incidents. Next, provide adequately trained resources throughout the organization to investigate quickly, identify true root causes (management system weaknesses), and recommend effective measures to prevent recurrence. Finally, track recommendations to resolution so that this specific situation is corrected, all similar situations are considered, and the root cause that allowed the event to occur has been repaired.

Understand and Control Human Error:

My organization has studied over 1,500 industrial accidents. With the rare exceptions of natural causes (earthquakes, floods, etc.) or intentional acts (sabotage, criminal behavior), human error is a factor in over 99% of these accidents. Please note that the term “human error” does not assign blame to the human. Humans make mistakes for many reasons, but almost never with the intent to cause harm. Sometimes (about 20%), they make mistakes because of unsafe work habits or behaviors. Usually (about 80%), they make mistakes because of faulty human factors such as poor task design; inadequate procedures, methods and tools; poor human-machine interfaces; poor communications; stress; and fitness for duty.

Think about this: Replacing the human, disciplining the human, retraining the human, or changing the human’s behavior will have only a minimal impact on reducing human errors. The most effective measures for reducing human error address the human factors that most often lead to error.

Regardless of the specific system and structure chosen, management must develop risk management competency throughout the organization. I recently spoke with one senior executive who wants to see every employee become a champion for safety. Risk management is everyone’s accountability. People in all functions and at all levels must be trained and involved in understanding risks, controlling risks, investigating failures, and minimizing human errors.


Additional Reading

Risk Management Strategies for a Risky Era
Managing Risk in the Private Equity Industry Middle Market with Interim Executives


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