What is Risk Management?

1. What is Risk Management? Cause factors Who uses Risk Management? Risk management plan Risk management strategy

2. Key Definitions • Risk Management - the process of identifying and controlling hazards to protect the force. • It’s five steps represent a logical thought process from which users develop tools, techniques, and procedures for applying risk management in their areas of responsibility. • It is a closed-loop process applicable to any situation and environment. TSP-5

3. Establish the context The basic process steps are: Identify the risks Analyse the risks Evaluate the risks Treat the risks Next

4. Key Definitions • Hazard - any real or potential condition that can cause injury, illness or death of personnel, or damage to, or loss of equipment or property, or mission degradation. • Risk - chance of hazard or bad consequences; exposure to chance of injury or loss. TSP-6

5. Key Definitions • Risk level is expressed in terms of hazard probability and severity. • Probability - the likelihood that an event will occur. • Severity - the expected consequence of an event in terms of degree of injury, property damage, or other mission impairing factors (loss of combat power, etc..,) that could occur. TSP-7

6. CAUSE FACTORS • Human Error - an individual’s actions or performance is different than what is required and results in or contributes to an accident. • Material Failure/Malfunction - a fault in the equipment that keeps it from working as designed, therefore causing or contributing to an accident. • Environmental Conditions - any natural or manmade surroundings that negatively affect performance of individuals, equipment or materials and causes or contributes to an accident.

7. CAUSES: • HUMAN ERROR • MATERIAL FAILURE/MALFUNCTION • ENVIRONMENTAL CONDITIONS UNDERLYING SOURCES OF CAUSES • INDIVIDUAL FAILURE • LEADER FAILURE • TRAINING FAILURE • STANDARDS FAILURE • SUPPORT FAILURE

8. Detection Resources and Techniques • Brain Storming • Experts • Publications • Accident Information • Scenario Thinking TSP-14

9. Who uses Risk Management? • Finance and Investment • Insurance • Health Care • Public Institutions • Governments Risk Management practices are widely used in public and the private sectors, covering a wide range of activities or operations. These include:

10. Risk management plan Identifying and documenting events that pose a risk to the outcome of a project is just the first step. It is equally important to monitor all risks on a scheduled basis by a risk management team, and reported on in the project status report.

11. Purpose of the plan (risk management plan ) This plan documents the processes, tools and procedures that will be used to manage and control those events that could have a negative impact on the project. It’s the controlling document for managing and controlling all project risks. This plan will address: • Risk Identification • Risk Assessment • Risk Mitigation • Risk Contingency Planning • Risk Tracking and Reporting

12. Risk Responsibilities The responsibility for managing risk is shared amongst all the stakeholders of the project. Risk Identification All project stakeholders Risk Registry Project Manager Risk Assessment All project stakeholders Risk Statements Project Manager(s) Risk Response Options Identification All project stakeholders Risk Contingency Planning Project Manager(s) Risk Response Management Project Managers Risk Reporting Project Manager

13. Risk Assessment Risk assessment is the act of determining the probability that a risk will occur and the impact that event would have, should it occur. This is basically a “cause and effect” analysis. The “cause” is the event that might occur, while the “effect” is the potential impact to a project, should the event occur. Assessment of a risk involves two factors. First is the probability which is the measure of certainty that an event, or risk, will occur. The second factor is estimate of the impact on the project. This can be a somewhat subjective assessment, but should be quantified whenever possible.

14. Risk Response For each identified risk, a response must be identified. best possible assessment of the risk and description of the response options in order to select the right response for each risk. The probability of the risk event occurring and the impacts will be the basis for determining the degree to which the actions to mitigate the risk should be taken. Risk Mitigation Risk mitigation involves two steps: • Identifying the various activities, or steps, to reduce the probability and/or impact of an adverse risk. • Creation of a Contingency Plan to deal with the risk should it occur. Taking early steps to reduce the probability of an adverse risk occurring may be more effective and less costly than repairing the damage after a risk has occurred

15. Risk Contingency Planning Contingency planning is the act of preparing a plan, or a series of activities, should an adverse risk occur. Having a contingency plan in place forces the project team to think in advance as to a course of action if a risk event takes place. • Identify the contingency plan tasks (or steps) that can be performed to implement the mitigation strategy. • Identify the necessary resources such as money, equipment and labor. • Develop a contingency plan schedule. Since the date the plan will be implemented is unknown, this schedule will be in the format of day 1, day 2, day 3, etc., rather than containing specific start and end dates. • Define emergency notification and escalation procedures, if appropriate. • Develop contingency plan training materials, if appropriate. • Review and update contingency plans if necessary. • Publish the plan(s) and distribute the plan(s) to management and those directly involved in executing the plan(s).

16. Tracking and Reporting The project risk manager will document the risk factor and the mitigating strategy. these documents can be used for the future project .