b'THE RISK ASSESSMENT CODE (RAC) CHARTKEYEXTREMELY HIGH RISK Height=severity Rare, catastrophic failures (the outcome/degree if an incident did occur)Width=frequency/probability (the likelihood of an incident)HIGH RISKInfrequent, critical failuresMODERATE RISKLess frequent, serious failuresLOW RISKFrequent, minor failuresrisk. For example, a manufacturer could subcontract certain5. MONITOR & REVIEWjobs to mitigate their risk or transfer it to someone else willingAudit the effectiveness of a risk management plan in times to take it on. Ideally, risk tolerance should be based in evidenceof crisis and during sustained periods of normalcy. A process and analytics, and not just a this is how weve always done to monitor the five-steps helps determine if collective it mindset. efficacy is well rooted within the companys hierarchy. This is because process itself influences whether decision-making is 4. MANAGE RISK considered successful. As employees become interdependent Anyone working in high-risk industries needs to account forin completing the job safely and understand their stake, the hazards with resources and planning. A risk management planmore likely favorable outcomes will be achieved. identifies the controls used to mitigate dangers and the whatSet up formal reviews at intervals that make sense for your to do when theres a mishap. The plan should include trainingorganization. Some can meet bi-annually with the same employees, especially front-line workers, to engage in specificbenefit as those who require daily safety meetings. During actions designed to avoid hazards and must protect employeesthese events, exchanges about past mistakes may help reduce during routine activities and emergencies alike. Managerialover-confident decision-making. Dont insulate employees attention to the front-line workers and contractors responsiblefrom failures. Furthermore, talking stimulates knowledge-for conducting tasks should be consistent and measurable.management across the organization and reinforces positive Allocating resources to achieve risk goals while maintainingbehavior-changes.regulatory compliance is consequential to the success ofthe plan.However, leadership must also develop a strong organizational culture. A shared set ofbeliefs creates an employee base thatWhether implementing the five-step virtual cycle of risk knows how to execute the risk management plan correctly.management or an alternative format, a framework must be Furthermore, employees know they will be rewarded whenfirmly in place before a risk-event occurs. To be effective, it upholding company values. Managers endorse culture bymust be activated at every level of the organization, responding holding open discussions surrounding near-misses and seriousto continuous feedback loops, driven by managerial attention, incidents, after theyve occurred. Supportive and correctiveand monitored by formal review. Risk management is a feedback encourages learning and reduces the likelihood ofdynamic process. Thoughtful approach to ever-evolving repeat offenses. hazards will pay dividends when it comes time for action.THREE'