What is your risk appetite?
A feat of modern engineering, buildings around the world are growing notably taller and more impressive as they combine innovation, technology, and functionality to set new standards to the definition of “Skyscraper.” The fourth tallest skyscraper in China, the eighth tallest in the world, the Shanghai World Financial Center (SWFC) stands at 1614.2 feet. Most remarkable is the vast considerations that go into the design and construction of these beasts. Not only do they have to be functional and aesthetically pleasing, they must also be safe and secure, prepared for an array of eventualities that may come at any given moment.
The SWFC is a prime example of the forethought taken in the design of these skyscrapers. With its foundation laid in 1997, the 101-story building wasn’t completed until 2008 after considerable planning (and changes) to mitigate ongoing safety concerns and risks. The building was designed using three interacting, parallel structural systems required to combat the high winds, earthquakes, and typhoons that could occur in the environment. It can accept the simultaneous loss of multiple structural elements without failing. After September 11, 2001, the building was further modified to withstand the impact of a plane.
As humanity “scrapes the sky” with its tall marvels, they must also account for the countless occupants within and around their creations. Holding a great percentage of our waking hours, these dwellings have safety and risk management embedded throughout.
Where to draw the line for safety and risk
There are four categories of risk: 1) high impact – high probability, 2) high impact – low probability, 3) low impact – high probability, and 4) low impact – low probability. Daily, individuals and businesses draw the line somewhere across this quadrant through the choices they make, thus identifying their risk appetite. As such, the fundamental question is always, “What is your risk appetite?”
Evident in the measures taken, the stakeholders of SWFC had a relatively small risk appetite. What are the statistical chances of an earthquake occurring or a plane crashing into a building? These are quite uncommon risks yet, because their impact can be so drastically devastating (high impact – low probability risks), they have been mitigated regardless. Should operations be any different?
The Human Factor in Sustaining Safety and Operations Risk Strategies
As with the SWFC, safety and risk need to be embedded throughout an operation. The reactive, compliance-based strategies from standards and regulations are no longer enough. It remains a fact that we still experience safety and risk situations which could have been, and should be in the future, avoided. And despite today’s technical advances, operations still struggle with mastering the fundamental elements: notably, the workforce.
Why a Worker-Centric Strategy
From a risk perspective, many sources attribute the operational failures today to human error. There was inadequate information, fatigue, inconsistencies or just poor decision-making which ultimately caused the failure or safety incident. This begs the question: if human error still plays a large part in the cause of these safety and risk incidents, should not today’s safety and operations risk strategies address the workforce issue? (Or conversely, if today’s strategies focus on the processes and policies within an operation and not the workers actually executing, then it makes sense that human error would still be attributed as a main cause for safety incidents.)
Industry bodies, research, and practitioners are acknowledging the need to transition from process-driven and policy-centric strategies to worker-centric methodologies to propel risk mitigation and improve safety. There are four core reasons that organizations should transition to worker-centric methodologies.
- Inherent Constraints in Processes, Policies, and Standards: Current safety and operations risk management practices are by nature constrained. Predominantly reactive, they cannot manage all eventualities. To create a sustainable safety and operations risk strategy, organizations must deploy methods to manage the factor that can make an impact on unknown situations – the workforce.
- Embedded Organizational Weaknesses: Policies, processes, procedures, and programs all have latent organizational weaknesses. They are exposed to flawed defenses and error precursors presented by unfavorable conditions. Time pressure, mental and physical fatigue, seniority, distractions, and mental state (lack of confidence/overconfidence) are among a few error precursors that process-driven and policy-centric strategies are exposed to with little defense or management measures.
- Lack of Adaptability and Agility in Dynamic Situations: Process-driven and policy-centric strategies are institutionalized within an organization, often followed by stringent compliance protocols. Similar to its reactive origin, this institutionalization makes these strategies rigid, lacking the flexibility and adaptability required to manage the daily realities of an operation. In some situations, the adherence to the “standard” can even preclude a more appropriate decision that poses an incongruent view, thus causing an incident or failure.
- Human Design Fallibility: Current strategies are created, developed, and implemented by (a few) humans who are by nature fallible. More often, supporting systems are created by subject matter experts for subject matter experts, failing to encompass the larger workforce. Strategies often exist detached from the operational realities and insights of frontline workers.
As SWFC adopted new measures to mitigate new risks, operations need to transition to more sustainable and effective strategies to manage the risks they see daily. Moreover, where policies and procedures will never overcome all inadequacies of a workforce, the workforce can in real terms overcome the inadequacies of policies and procedures. It is time to rethink our approach to safety and operations risk, merging the standards, policies, and processes together with the workers responsible for execution on a day-to-day basis.
Designed to close the loop between process and person, MySafety enables operations to lower their risk appetite, delivering detailed insights which give every business the intelligence they need to best ensure sustainable safety and operations risk management strategies and business outcomes. MySafety, a workforce-centric safety and operations risk management solution, enables organizations to proactively capture those critical real-time actionable operational insights required to reduce failures and improve safety. These insights empower workers across every level of an organization to make more intelligent operational decisions with less risk in the thousands of choices they encounter each day.