When the only certainty is uncertainty, what is the most effective operational risk management strategy? The 2020 worldwide pandemic created unparalleled change and uncertainty for nations and organisations worldwide. What has come to the fore as a result is the ability at all levels to anticipate the potential risks early and also quickly learn and adapt to unexpected scenarios. Those who have done this well have been better able to manage the unpredictability of the risks and to innovate effectively. This has held true at all levels from individuals to work teams up to organisations and entire nations.
I am writing this paper from my point of view as health and
safety risk management practitioner and based on my experience from the last 10
years working with organisations using a variety of risk management and
innovation strategies and capabilities. It follows on from my previous article
about the potential value of team psychological safety at the start of the 2020
pandemic.
In the New Zealand health and safety industry for the past
few years there has been a strong orrientation to critical risk
management. Looking ahead, in the coming
months and years organisations are going to managing a new degree of unpredictable
risks. Because of this need to develop
an adaptive risk management capability to compliment critical risk management.
I am interested in exploring what adaptive capacity is, as
an essential risk management strategy for the coming years. The fundamental question behind this though
is what is our risk management strategy for different types of risks and
operational situations. To put this
another way; in what situtions is it important to consider shifting your operational
risk management streategy from predominantly procedures, rules, centrally led
analysis to one which gives more freedom and capacity for local operational
teams to anticipate, learn and adapt (Resilience) as needed?
We have all been affected in some way by the worldwide
pandemic response. To recap on the
reason for the response, as recently described in a Stuff.co.nz news article by
Dr Paul Young, an intensive care specialist in the New Zealand Capital and
coast District Health Board. He
explained that Covid-19 is an unprecedented threat to the health of
New Zealanders and to our ability to properly staff our essential health
services. He further explained the
problem “that, because Covid-19 is so contagious and with no vaccine, it has
caused a fast moving and uncontrolled epidemic with lots of people getting the
illness at the same time.
The key health system issue is that left uncontrolled,
there could be more than ten times more patients needing intensive care than
there are beds available – on an ongoing basis for weeks or months.” This volume of patients would overwhelm the
nations health system and Young further argued, “If we don't follow the advice
of our government and our public health officials, tens of thousands of people
will die. It's that simple.” Young then proposed
that “if New Zealand pulls together as a community we will save thousands of
lives and then will be able to get the economy back up and running.”
Within each and every organisation in New Zealand teams have
also been having to pull toegther to repeatedly adapt to new demands and opportunities
that have arisen as they found out the timelines and requirements of lockdown levels
four then three then two. This will
continue through the year into level one as organistions work to manage all
their operational and business risks so they can keep their people safe and
keep themselves afloat.
The WorkSafe NZ website
states that “Healthy and safe work starts with identifying and
understanding what your work-related health and safety risks are. It then
involves doing what is reasonable and practicable to eliminate those risks. A critical risk management approach typically
interprets this as having a risk led approach where risks are identified and
managed in a methodical and planned way
around a cycle that goes over one to two years.
But the pandemic has set a series of global events into
action that have dramatically increase the amount and speed of change happening
within our global society (which seems like an unbelievably large scale just
writing it!) . This speed and magnitude
of change has increased the complexity of risk management to the point where
organizational level critical risk management and a methodical commitment to
plan-do-check-act is not enough. For
example a senior leadership team can identify the risks of infectious disease
from the Pandemic and establish face masks as required PPE but if there is a
national shortage of the kit or people don't have time to be trained on how or
when to use it then it is an ineffective control.
There is a strong argument based on 20 years of
research from disciplines that in complex risk management situations local work
teams need a greater capacity and support to be able to go beyond critical risk
management practices to:
·
Anticipate new risks at all operational
levels at the same time – team, business unit, organization, industry
·
Find ways to quickly learn from their people
and teams on the front line as they find problems with their initial plans and
·
Adapt to their changing situation based on
what they think is best in their unique situation
Some examples of operational
models and workplace disciplines that are designed for adaptability and agility
in changing situations or high risk industries and bring these capacities to life include:
-
Resilience engineering
-
High Reliability Organizational theory
-
Agile Project Managemeng
-
Human Centred Design
-
Lean Manufacturing
-
Alliance Contracting
All these ways of working are built on principles that
encourage adaptability in uncertain times and incorporate or promote work
practices that enable these abilities to anticipate unexpected risks and
opportunities, and then regularly learn about chaning needs and adapt.
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