Risky Business


Risky Business
Aviation in itself is not inherently dangerous. But to an even greater degree than sea, it is terribly unforgiving of any carelessness, incapacity or neglect. Aviation has offered to the human being a variety of possibilities. Some people prefer to fly because it is the fastest way to travel. Others view flying as a sense of new freedom separated from terra firma: the ability to separate yourself from the hectic world. Yet some other people choose to fly because they are addicted to it; many choose flying as a job that they love to carry out day in and day out. Because flying in an airliner involves putting oneself in a metal tube, traveling at approximately nine hundred miles an hour, twenty to forty thousand feet above the earth, there are certain risks involved if the necessary requirements are not met. The high sophistication of the aircraft today, apart from increasing the level of safety, is also placing additional burden on the pilot to operate it safely. The fragile nature of human beings and their tendency to make an error makes the possible threat to flying even greater. This paper will briefly explain a process put in place to help mitigate the riskier side of aviation. (Haussermann, 2006)

What is risk?
Risk is the chance of injury or loss. Insight can be gained by listening to how people refer to risk in an everyday context and, particularly, in the aviation environment. What emerges is that there are different ideas about risk, based on personal perceptions. Nonetheless, its underlying concepts remain—a chance that something is going to happen and consequences if it does. Risk is associated with any activity in this world. The level of risk in aviation varies depending on the nature of flying. Airline flying is at least ten times safer than driving an automobile. On the other hand, driving an automobile is ten times safer than recreational flying. The level of risk or threat associated in airline flying is low since the pilots are continuously being retrained to maintain their skills. They have to demonstrate their handling abilities in the proficiency test every six month. On the contrary, their counterpart in private flying world only sits for the test for every two years. Consequently, aviation accident records are littered with general aviation crashes. Flying is analogous to driving. The more frequent one indulges in the activity, the sharper the skill will be, and the lesser the risks are. For example, bad weather flying is almost a normal occurrence to the highly skilled pilot in advance cockpit aircraft, but a real threat to the unskilled in the basic airplane. (Mohamed)

Why manage risk?
Mismanagement of risk can carry an enormous cost. In recent years, business has experienced numerous, related risk reversals that have resulted in considerable financial loss, decrease in shareholder value, damage to company reputations, dismissals of senior management, and, in some cases, the very dissolution of the business. This increasingly risky environment, in which risk mismanagement can have dire consequences, mandates that management adopt a new more proactive perspective on risk management. (Cowherd & Manson, 2003)

Types of risk management
Risk management has been called by many different names over the centuries; it is usually named based upon the activity that is trying to be managed. Some examples are: Enterprise Risk Management (ERM), Crew Resource Management (CRM), and Operational Risk Management (ORM) to mention a few. The basic underlying concept is the same for all risk management; the differences are in the scope, the situation, and subject. ORM/CRM is a concept that is quickly becoming the status quo in the aviation industry as guidelines for how to operate in a safe manner.

What is ORM?
Risk management is a natural component of daily life. Every time we cook a meal, walk down the street, ride a bike, drive our car, participate in sports, watch television, purchase a product or decide where to live we are choosing the best course of action for a specific given situation. Our professional life mirrors our personal life when it comes to ORM with one exception: the military has detailed regulatory risk management procedures in place to help ensure standardized decision making within the organization. ORM is not a new concept in aviation. All Technical Orders, Instructions, Checklists and Publications currently in use are, by definition, ORM documents. For example, the steps for starting an aircraft engine have been evaluated using "decision-making tools" and determined to be the "best course of action" prior to Tech Order and Checklist inclusion. The point here is that a certain level of ORM has already been applied and integrated into almost every existing aspect of flight operations. (Haussermann, 2006)

Why incorporate ORM?
Some may feel Operational Risk Management, more commonly referred to as "ORM", is just another dirty three letter word. This can happen even with the best of programs when they are mandated with little understanding. However, ORM is simply applying common sense to whatever challenge you face. Over the years, ORM for aviators has typically been a patchwork of unit procedures and vague command guidance. Often our leaders weren't exactly sure what it was, but they knew it was supposed to be good. So they would say something like, "go do some of that ORM stuff." Of course, directing everyone to use ORM without putting down a foundation of understanding can be counterproductive. If people are really going to get on board the "risk management" train they have to be convinced it will actually improve their lives and the way we do business. (Haussermann, 2006)

Principles of ORM
ORM incorporates the following four principles:
Accept Risk When Benefits Outweigh The Cost. Risk is inherent in all activities. Risk is also related to gain; normally greater potential gain requires greater risk. The goal of ORM is not to eliminate risk, but to manage the risk so that the mission can be accomplished with the minimum amount of loss. (The Six Step ORM Process)

Accept No Unnecessary Risk. We should clearly understand that the acceptance of risk does not equate to the imprudent willingness to gamble. Only take risks that are necessary to accomplish the mission. (The Six Step ORM Process)

Anticipate And Manage Risk By Planning. Risks are more easily controlled when they are identified early in the planning process. (The Six Step ORM Process)

Make Risk Decisions At The Right Level. ORM decisions are made by the leader directly responsible for the operation. Prudence, experience, judgment, intuition and situational awareness of leaders directly involved in the planning and execution of the mission are the critical elements in making effective ORM decisions. When the leader responsible for executing the mission determines that the risk associated with that mission cannot be controlled at his or her level, or goes beyond management’s stated intent, he or she shall elevate the decision to their chain of command. (The Six Step ORM Process)

The ORM Process
SIX-STEP PROCESS WITH ASSOCIATED ACTIONS
ORM is a continuous process designed to detect, assess, and control risk while enhancing performance and maximizing combat capabilities. The specific actions associated with each step of the ORM process are depicted below. (The Six Step ORM Process)

In closing, itt seems clear that ORM is more than another management fad or academic theory. ORM will continue to become more integrated into the management process for organizations in the future. Not only aviation, but many industries are beginning to see the benefit of protecting themselves from all types of potential risk exposures. By identifying and mapping risk exposures throughout the organization, a company can concentrate on mitigating those exposures that can do the most damage. With an understanding of risks, their severity, and their frequency, a company can turn to solutions; be it retaining, transferring, sharing, or avoiding a particular risk. The new approach will keep managers and employees at all levels sensitized to and concerned about risk management. Risk management will be coordinated with senior management oversight and everyone in the organization will view risk management as part of his or her job. The risk management process will be continuous and broadly focused. Risk management will be a driving force in foreseeable business future. (Cowherd & Manson, 2003)

References
Cowherd, Jeffery L., Manson, Daniel P. (2003). Enterprise/Operational Risk Management. Retrieved 20 July, 2009 from the World Wide Web: http://www.csupomona.edu/~jis/2003/Cowherd_Manson.pdf
Mohamed, Abdul L. Risk Analysis in Aviation. Retrieved 17 July, 2009 from the World Wide Web: http://www.angelfire.com/trek/abdullatif/Aviationrisk.htm
The Six Step ORM Process (N.D.). Retrieved 22 July, 2009 from the World Wide Web: http://www.seco.noaa.gov/Safety/ORM/ORMUCBT%201_0/fundamentals/chapter2/chapter.html
Types of Risk Management (N.D.). Retrieved 22 July, 2009 from the World Wide Web: http://finance.mapsofworld.com/risk-management/types
Haussermann, Eric (2006). Retrieved 22 July, 2009 from the World Wide Web: http://findarticles.com/p/articles/mi_qa3744/is_200605/ai_n17182369/pg_2/?tag=content;col1

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