Why Risk? Why Culture? Why Risk Culture?

3 Reasons Why You Should Explore the Risk Culture In Your Organisation

Why Risk?

Because MANAGING SAFETY = MANAGING RISK. “Safety is increasingly viewed as the management of risk.” (ICAO Doc. 9422)

As the commercial air transport industry improved its safety performance and reached – as some argue – an ‘ultra-safe’ level, measuring and managing safety cannot be based on looking backwards. Predicting future based on ONLY past events (accidents/occurrences) is a flawed argument. Unfortunately, the majority of current decisions rely on data / evidence what happened rather than what can potentially happen.

By their definition, hazards are at present but risks are in the future. In addition to SEVERITY and PROBABILITY, RISK also means UNCERTAINTY but OPPORTUNITY as well.

THEREFORE, MANAGING SAFETY AND RISK REQUIRES MUCH MORE THAN DECISION MAKING BASED ON DATA INDICATING / DESCRIBING WHAT HAPPENED IN THE PAST.

Why Culture?

“Culture eats strategy for breakfast” (Peter Drucker) Achieving results heavily depends on the organisational culture however good your strategy is.

“Culture is definitionally illusive. You know it when you see it.” (Herb Kelleher) There is no universally agreed definition of culture. Furthermore, there are over 50 definitions of ‘Safety Culture’.

“Culture: the unwritten rules of the social game”. “Culture: Software of the Mind.” (Geert Hofstede)

The relationship between culture and safety is a complex one but many would argue and accept that culture is an important enabler for managing safety and risk. ICAO stated in the past that three distinct cultures (National, Organisational and Professional) have relevance to safety management. (ICAO SMM 2nd Edition)

Why Risk Culture?

Risk is a social and a subjective construct.

One can argue that risk culture is an oxymoron as it would be impossible to achieve shared values, beliefs and behaviours in relation to risk. However, a common understanding of risk and communication of risk across different levels in organisations is vital for its effective management.

The concept of RISK CULTURE explores how risk is identified, analysed, assessed, mitigated and more importantly communicated across the entire organisation. More importantly, it aims to understand how risk decisions are made at different levels and if the risks tolerated at the coalface are also acceptable to the senior management as well.

Some questions for the RISK OWNERS & KEY RISK DECISION MAKERS

How do you know the risks accepted / tolerated by the frontline staff are also acceptable to the ‘Safety Review Board’ in your organisation? Have you ever asked them what risks they accept or find acceptable and what risks they reject or find unacceptable? In stead of asking them tens of questions in your next safety culture survey, please consider asking these simple questions. The responses may provide some real insight about how risk decisions are made at the coalface.

Do you know the factors driving / encouraging your frontline operators and their line managers to tolerate certain risks that may not be acceptable to senior management? Wouldn’t you like to know these factors, further analyse them and make sensible, cost effective risk mitigation decisions to reduce your exposure?

How do you know your organisation isn’t ‘Risk Ignorant’ or hasn’t become ‘Risk Cavalier’ or ‘Risk Averse’? What do you need to do to develop a ‘Risk Sensible’ organisational culture?

3 Reasons why you should explore the ‘Risk Culture’ in your organisation.

1. Want to be proactive? You should talk more about risks rather than hazards.

The term risk unfortunately has a negative connotation as it implies a bad outcome, but it also means uncertainty and opportunity. So, we should encourage people to talk about it more openly so that we have a better and common understanding of the risks faced. Tolerating / Accepting Risks doesn’t always mean noncomplying with SOP’s, rules and regulations. One can be compliant but less safe and in certain cases safer even though non-compliant. Nevertheless, of course, I am not encouraging any non-compliant practices, and the operational environment is much more dynamic and complex than rules and regulations can define or address. Every day, frontline operators (particularly pilots and engineers) make risk decisions based on their judgement. They are the operational risk managers in the entire system.

Exploring Risk Culture in your organisation can potentially identify some hazards and risks which may not be reported through the usual reporting processes such as ‘occurrence and/or hazard reporting’. In some cases, it may potentially identify excessive risk-taking behaviour / practices. Also asking frontline operators to focus on risks rather than occurrences and hazards will drive them to think differently about safety.

2. Proactive Implementation of Just Culture. Don’t wait until you have to take disciplinary action!

IATA defines ‘Just Culture’ as “An environment of trust in which people are encouraged to provide essential information, but also in which people are clear about where the line is drawn between acceptable and unacceptable behavior. Just Culture involves:

• Managing behavioural choices in line with organisational values and beliefs, and

• Balancing both system and individual accountability.”

In principle, the above definition is clear but in reality it is never possible to clearly define what’s acceptable and what’s unacceptable. We can never develop a taxonomy or list of acceptable and unacceptable behaviours / risks. In a very complex and dynamic operational environment, context makes all the difference particularly in relation to decision making and tolerating certain risks.

If you identify what front line operators find acceptable and unacceptable before an event occurs, you can do something about those risks which are not acceptable to the management. If an event occurs due to an unacceptable behaviour and subsequently a disciplinary action is taken as part of just culture policy, this will inevitably have an adverse impact on ‘reporting culture’ and it may take a long time to regain the trust of frontline operators. Identifying the risks tolerated by frontline operators before an occurrence, incident or accident will give management the opportunity to clarify what should and shouldn’t be tolerated. It can also enable the organisation to understand the factors driving risk-taking behaviour and mitigate those factors to reduce the exposure.

3. You should aim to develop a ‘Risk Sensible’ organisation culture.

Understanding risk is vital for its effective management. It enables the organisation to make different choices in terms of risk protection and risk exposure. Based on the concept of ‘Four States of Man’ (Risk Ignorant, Risk Cavalier, Risk Averse and Risk Sensible) coined by Sir Charles Haddon-Cave, I have developed a risk culture framework for commercial air transport organisations. It is also influenced by many other culture models and frameworks developed over the decades as well as the ISO 31000 and the Risk Culture Model developed by Institute of Risk Management.

The framework and the proposed method for the assessment of risk culture aim to provide the organisation the opportunity to identify areas for improvement and develop a ‘Risk Sensible’ organisational culture. Please get in touch if you wish to provide feedback about this contemporary approach and more importantly if you wish to collaborate to conduct an assessment in your organisation.

You can find the framework, assessment model and a proposed project plan at http://riskculture.org/risk-culture-framework/