MI Safety News Contributor Chris Goulart Helps us Keep the Saw Sharp
We frequently ask for contributors to the site. One of us most frequent has been Chris Goulart, a Michigan safety professional who, like you, works to make a difference everyday. Here he shares some perspectives on Risk Assessment. More articles will follow.
GJ Risk Assessment
In 1939, with war raging in Europe, Japan was aggressively expanding its sphere of influence in Asia and the Pacific. The three primary axis powers: Germany, Italy, and Japan had reached an agreement in the Tripartite Pact to form an Axis of mutual protection. In the United States, the public generally wanted to avoid war at all costs. However, in mid 1941, it became apparent that Japan would be happy only with complete domination of the entire South Pacific Region, including holdings by Great Britain, the Netherlands, and the United States in the Philippines. In July 1941, the US decided to stop exporting oil to the Empire of Japan. Most experts of the time believed that Japan would view this as an overt act of aggression; indeed this event likely precipitated that attack on Pearl Harbor. However, most military experts in the US did not believe that Japan was capable of mounting a large-scale attack so far from their primary supply bases. This assessment proved incorrect. After the Pearl Harbor attack, the US Pacific fleet was crippled, having lost 4 battleships, 188 aircraft, and 2,500 sailors.
On Monday, August 29, 2005, a former Category 5 Hurricane named “Katrina” slammed into the Louisiana/Mississippi Coast, just East of New Orleans. Hurricanes along the Gulf Coast are not a rare event and numerous storms occur annually. According to the Annenberg Public Policy Center Fact Check Group, on July 23, 2004, the Federal Emergency Management Agency (FEMA) conducted a hypothetical table-top drill called “Hurricane Pam”. In this mock event, a category 3 hurricane would hit New Orleans directly. The resulting damage was postulated to be widespread levee failure with most of the city of New Orleans flooded. Further, most of the inhabitants were not expected to evacuate and would need to be rescued from rooftops.
These events represented worst-case scenarios in their day. All of them had some predictability and an in-depth evaluation of the likely worst-case outcome from each event had been analyzed before. Why then, did these events occur and result in such tragic and profound losses? In the field of safety, this question is asked repeatedly: How likely is our organization to experience a loss and how bad will that loss be if it actually occurs. The answers to these questions can be provided in a deliberate and quantified manner using the process of Risk Assessment.
What is Risk Assessment and what is its relationship to safety?
In the world of financial management, risk assessment is an evaluation that looks at a particular financial instruments ability to generate positive cash flow while insulating an investor from potential loss of principle. Financial Market Risk Assessment is a concept that is over 100 years old, but began to have a major focus starting in the 1950s and 1960s with the rise of multi-indexed funds. Over the last 40 to 50 years the formulas for financial management risk assessments have become more complex, detailed, and in some cases, very accurate in depicting the potential gains versus the potential loss for an investor. Safety professionals began to look at risk assessment as a natural and direct linkage to the financial world.
Qualitative Risk Assessment
One of the first formal risk assessment methodologies was created by the US Military. This standard, MIL-STD-882 was initially a fundamental matrix that combined the chance or opportunity for harm (probability) with the degree of possible harm (severity). This matrix resulted in fundamental assignment of three levels of risk, high, medium, or low. Over the years the military has refined the process making it more robust and easier to use. The current manifestation (MIL-STD-882E) was released in 2005. One of the strength’s of the MIL-STD-882 series is the combination of predictive assessments from the historical data with the possible severity.
In private industry, the ANSI B11 Machine Safety Series of Standards created a virtually identical form of risk assessment. These safety standards were designed for use relating to the design, procurement, and use of machines in industrial environments. However, the risk assessment methodology outlined in the ANSI Technical Report ANSI B11 TR3 (2000) also contains substantial information about creating risk reducing strategies that will impact the risk level until an acceptable residual risk is achieved.
In both approaches, probability of harm is a function of how often mishaps have happened in the past. Unfortunately, there are a few weaknesses with both of these techniques associated with the reactive nature of the evaluations. First, approaches like these do not look at how many persons may be exposed to injury, rather they look at how likely a given piece of equipment or system is to fail. Second, they do not look specifically at how often a piece of equipment is used or how many times a system is utilized. Third, these methods do not have a focused predictive function that is independent of historical data.
Because they are generally qualitative, these systems tend, inherently, to have low value ranges for the overall risk spectrum. The MIL-STD-82E System has 20 distinct categories of risk and the ANSI B11 System has 16. As a result, the discernable differences in risk levels will appear flattened and may not represent enough precision for significant comparison of diverse activities. The overall limited number of categories for the risks are often consolidated into even tighter groupings of categories. Both the Military and ANSI Standards have “high”, “medium”, “low”, and “negligible” groupings. The objective is to provide a matrix that is easy to use and quick to reference. However, the unintended outcome is also a loss of good analytical detail. Finally, interventions that may have an impact on the actual level of risk may not be noticed if they do not move the risk from one categorization to another.
| Severity of Harm | ||||
| Probability of
Occurrence of Harm |
Catastrophic | Serious | Moderate | Minor |
| Very Likely | High | High | High | Medium |
| Likely | High | High | Medium | Low |
| Unlikely | Medium | Medium | Low | Negligible |
| Remote | Low | Low | Negligible | Negligible |
Table 1) ANSI B11 Risk Assessment Matrix
Quantitative Risk Assessments
Recently, organizations have begun the process of refining risk assessment methodologies and using procedures that tend to be quantitative versus qualitative. The value of a quantitative risk assessment methodology over qualitative is the ability to discern small differences in risk level. Also, a well designed quantified risk assessment methodology provides perspective of how the different components of risk interact with one another.
Calibration & Synchronization
In order to have full application of a quantified risk assessment, it must be calibrated to determine what level of measures are most reasonable for the organization. A manufacturing facility that runs products on a regular basis on machines which rarely need repair might be able to use a risk scale that evaluates frequency of exposure in terms of events per minute, per hour and per day. A construction company that has very diverse activities which do not occur with as much regularity may consider a frequency of exposure scale based on days, or weeks. After deliberate consideration to ensure the optimal scale for evaluating risk has been developed, the risk scale must be synchronized.
Synchronizing the risk scale means applying it broadly across the organization in a consistent and unified way. As long as the risk assessment scale is used in a constant manner any one risk can be compared against any other. The concept is very similar to using any other numeric measuring system. If temperature is measured using Fahrenheit in Alaska and in Arizona, the values can be compared. Contrary to popular belief 22 degrees in Arizona is just as cold as 22 degrees in Alaska.
Advantages of a Quantified Risk Assessment versus a Qualitative Risk Assessment
With a quantified risk assessment that is calibrated and synchronized, risks can be easily empirically evaluated and compared against one another. This allows for ranking the areas that create the greatest opportunity for improvement higher and allows for measured targets of improvement to be set and prioritized.
ORGANIZATIONAL RISK RANKING SCORES
| RISK CATEGORY | RISK SCORE |
| Operating Motor Vehicle at Night | 245 |
| Entering Confined Spaces in the Storage Area | 230 |
| Working on a Belt Using Lockout/Tagout | 226 |
| Welding at Elevation | 215 |
| Driving Forklifts in the Production Area | 210 |
| Manually Moving Large Items | 167 |
| Working in the Office Environment | 121 |
Table 2) Risk Ranking Table
Quantitative risk assessment also allows organizations to predict the effect on the overall risk level of safety interventions. This predictive ability is more prominent with quantitative risk assessment methodologies than it is with qualitative risk assessment. This is due to the number of different factors used to quantify risk. When a risk is evaluated using factors such as frequency of exposure, number of individuals exposed, number of times a day exposed etc. It becomes much easier to posit how a particular intervention will affect one or more of the constituent components of risk. This predictive value can be expressed as a forecasted reduction in risk. Essentially, after enough risk remediating strategies have been put in place to reduce the residual risk level below the organization’s appetite for risk, a correlation between the risk reduction levels and the actual reductions in lagging indicators, such as OSHA Recordable Frequency and DART Frequency, will be reached. This correlation will allow the organization to evaluate the effectiveness of the overall risk assessment strategy and will serve to determine if additional risk rating scale calibration is needed.
Completing a Quantitative Risk Assessment
One important consideration for conducting a quantified risk assessment is determining who should be involved in conducting the actual evaluation. It is generally advisable for a cross-functional group of three to six persons, who have intimate knowledge of the risk being evaluated, to be involved in conducting the risk assessment. A group this size is beneficial for a number of reasons. First, different and varied perspectives can be shared and multiple points of view brought up and expressed. Second, after the group has shared different perspective, discussions are held to reinforce arguments or to disprove others. Third, a general consensus can be reached through the discussions and, if need be, votes taken for determining majority opinions. Fourth, the consensus that follows rigorous debate and insightful reflection will result in an impartial risk score with greatly reduced subjectivity. Fifth, a cross-functional group of employees can act as ambassadors of the other workers and can contribute both their individual knowledge and the collective experience of their work group. Sixth, a small group of three to six individuals is more likely to stay focused and not be distracted by external events.
The actual make-up of the team should involve individuals from divergent professional backgrounds within the organization. It also makes sense to involve those closest to the risk with the actual evaluation. If only safety professionals or management complete risk assessments, valuable information may be lost as the perspectives and experience of operators and line employees will be missed. Risk assessments that are completed by facilitated employee teams are not only more likely to be valid, but they are also more likely to be accepted by the employees. Because the numbers were generated by the peers of the workers and were not derived only by managers or safety professionals, workers will feel more confident that a real-world perspective was captured.
Other considerations that support using a facilitated cross-functional employee team are that the member of the risk assessment team will help drive risk reductions as they were personally involved with the risk survey and they have the responsibility for owning the process. The employees involved will develop skills and abilities regarding critical thinking, problem solving, and the ability to conduct in-depth analysis of business process. Organizations always welcome these talents as they form a very transferable skill set. Therefore, a quantified risk assessment provides additional benefits to the organization by delivering a better product that has less subjectivity and has helped the professional development of those completing it.
In the next article a detailed description of two quantified risk assessment methodologies will be provided, along with a discussion of under what circumstances it is appropriate to conduct a risk assessment.
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