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TRAINEE GUIDE

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FOR TRAINING USE ONLY 1

INFORMATION SHEET 1-1

ACTIVITY

A. INTRODUCTION

In this lesson, you will learn about Operational Risk Management (ORM). This activity is

designed to stimulate prior knowledge and interest in the topics covered in this lesson.

B. REFERENCES

None

C. INFORMATION

Below is a K-W-L Chart. Write down what you know about ORM in the “K” area, and what you

would like to learn about ORM in the “W” area. At the end of the lesson, you will write what you

learned about ORM in the “L” area. Be ready to share your answers.

K-W-L CHART

K

What I Know

W

What I Want to Know

L

What I Learned

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OUTLINE SHEET 1-2

OPERATIONAL RISK MANAGEMENT (ORM)

A. INTRODUCTION

In this section, you will interpret the Operational Risk Management (ORM) process. You will

learn the definition of ORM and its use, attributes, and principles.

B. OBJECTIVE

Upon successful completion of this section, you will be able to:

GIVEN APPLICABLE TECHNICAL DOCUMENTATION AND DIRECTIVES INTERPRET

OPERATIONAL RISK MANAGEMENT (ORM) BASICS IAW ESTABLISHED SAFETY

REQUIREMENTS, APPLICABLE TECHNICAL DOCUMENTATION AND DIRECTIVES

C. SECTION OUTLINE

1. Section Introduction

2. ORM

3. Key Attributes

4. ORM Principles

5. ORM Examples

6. Practice

7. Section Review

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OPERATIONAL RISK MANAGEMENT (ORM) BASICS

A. INTRODUCTION

Risk is inherent in all tasks, training, missions, operations, and personal activities, no matter how

routine. Human error is the most common cause of task degradation or mission failure. As Navy

personnel, you are responsible for managing risk in every task.

B. REFERENCES

1. Operational Risk Management, OPNAVINST 3500.39C (Series)

C. INFORMATION

ORM reduces or offsets risks by systematically:

Identifying hazards

Assessing and controlling the associated risks

Allowing decisions to be made that weigh risks against mission or task benefits

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OPERATIONAL RISK MANAGEMENT (ORM) KEY ATTRIBUTES

A. INTRODUCTION

ORM is the systematic, cyclical process used to identify hazards and assess and control the

associated risks. ORM can be applied to almost any situation from tactical maneuvers to grocery

shopping.

B. REFERENCES


C. INFORMATION

ORM key attributes:

Enhance mission or task accomplishment by increasing the probability of success.

Minimize risks to acceptable levels proportionate to the benefit or value of mission or task

accomplishment while providing a method to effectively manage resources.

Enhance decision-making skills based on a systematic, reasoned, and repeatable process.

Provide a systematic structure to perform risk assessments.

Provide improved confidence for individuals to make informed risk decisions. Adequate

risk analysis provides a clear picture of the hazards and unit capabilities.

Preserve personnel and materiel by avoiding unnecessary risks, thus reducing mishaps and

the associated costs.

Provide an adaptive process for continuous feedback through the planning, preparation,

and execution phases of any evolution.

Identify feasible and effective control measures, particularly where specific standards do

not exist.

ORM does not:

Inhibit flexibility, initiative, or accountability.

Remove risk altogether or support a zero-defect mindset

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Remove the necessity for practice, drills, rehearsals, tactics, techniques, or procedures.

Sanction or justify violating the law or Department of Defense or Navy standards or

criteria.

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OPERATIONAL RISK MANAGEMENT (ORM) PRINCIPLES

A. INTRODUCTION

There are four basic principles that provide the foundation for risk management and the

framework for implementing the ORM process.

B. REFERENCES


C. INFORMATION

ORM principles:

Accept risk when benefits outweigh the cost.

The process of weighing risks against the benefits and cost of the mission or task helps to

maximize success. Personnel with knowledge and experience of the mission or task should

be involved in making risk decisions.

Accept no unnecessary risk.

If all detectable hazards have not been identified, then unnecessary risks are being

accepted. An unnecessary risk is any risk that:

o Will not contribute meaningfully to mission or task accomplishment.

o Will needlessly jeopardize personnel or materiel.

Anticipate and manage risk by planning.

Integrating risk management into planning, at all levels and as early as possible, provides

the greatest opportunity to make well-informed risk decisions, implement effective risk

controls, and reduce costs.

Make decisions at the right level.

Anyone can make a risk decision. However, the appropriate level for risk decisions is the

person that can:

o Make decisions to eliminate or minimize the hazard.

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o Implement controls to reduce the risk.

o Accept the risk.

Ensuring risk decisions are made at the appropriate level establishes clear accountability. Those

accountable for the mission must be included in the risk management process. Leaders at all levels

must ensure that personnel know:

How much risk they can accept.

When to elevate the decision to a higher level.

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PROBLEM SHEET 1-6

OPERATIONAL RISK MANAGEMENT (ORM) PRACTICE

A. INTRODUCTION

This activity allows you to practice applying the ORM process to a given scenario.

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

Form groups of two or three. Read the scenario below and brainstorm examples of how you can

apply ORM to the scenario. Answer each question and be prepared to share your answers in class.

E. PROBLEM

You are tasked with participating in an underway replenishment of fuel tanks. Your job is to

inspect all the fueling equipment prior to the replenishment. How can you use ORM to reduce the

risk of an accident?

Answer the following questions:

1. How could this task go wrong?

2. What can you control to keep these things from going wrong?

3. If you can’t keep this from going wrong, who do you tell?

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JOB SHEET 1-7

OPERATIONAL RISK MANAGEMENT (ORM) ASSESSMENT

A. INTRODUCTION

ORM is a decision-making methodology used to increase operational effectiveness by anticipating

hazards and reducing potential for loss, thereby increasing the probability of a successful mission.

Use the following assessment to apply ORM to the given scenario.

B. EQUIPMENT

None

C. REFERENCES


D. SAFETY PRECAUTIONS

None

E. SELF-TEST QUESTIONS

F. JOB STEPS

Scenario: You just bought a new car and are taking extra care to keep it in good condition. How

can you use ORM to reduce your risk of getting into an accident on the way to work?

Answer the following questions:

1. How could this task go wrong?

2. What can you control to keep these things from going wrong?

3. If you can’t keep this from going wrong, who do you tell?

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OUTLINE SHEET 2-1

THE FIVE-STEP OPERATIONAL RISK MANAGEMENT (ORM) PROCESS

A. INTRODUCTION

In this section, you will learn the five-step Operational Risk Management (ORM) process. You

will learn how to apply the five steps of the process and how to interpret the ORM process

diagram.

B. OBJECTIVE



THE FIVE-STEP ORM PROCESS IAW ESTABLISHED SAFETY REQUIREMENTS,

APPLICABLE TECHNICAL DOCUMENTATION, AND DIRECTIVES

C. SECTION OUTLINE


2. The Five-Step ORM Process

3. Identifying the Hazards

4. Accessing the Hazards

5. Making Risk Decisions

6. Implementing Controls

7. Supervising

8. The ORM Process Diagram

9. Practice

10. Section Review

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PROBLEM SHEET 2-2


A. INTRODUCTION

The ORM process must be applied in sequence, as each step is a building block for the next step.

The first two steps provide risk assessment of the situation and enhanced awareness. The

remaining three steps provide follow-through actions to either eliminate the hazard or reduce the

risks.

It is important to use the following steps to reduce the potential for loss and increase the

probability of a successful mission:

1. Identify hazards

2. Assess hazards

3. Make risk decisions

4. Implement controls

5. Supervise

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

You participated in a class discussion describing examples of a mission or task and conditions that

could negatively impact successful mission or task completion. Use one of the examples to

determine how to proceed for each step in the ORM process. Complete each step as the instructor

presents the information.

E. PROBLEM

1. Identify hazards.

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2. Assess hazards.

3. Make risk decisions.

4. Implement controls.

5. Supervise.

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SEVERITY AND PROBABILITY CATEGORIES

A. INTRODUCTION

Severity and probability are assigned categories based on their likelihood to occur. Severity is

assigned Roman numerals and probability is assigned a letter according to the description criteria

listed below. Use this sheet to determine the degree of risk for each hazard. Then assign each

hazard a category.

B. REFERENCES


C. INFORMATION

Severity Categories

Category Description

I Loss of the ability to accomplish the mission

Death or permanent total disability

Loss of a mission-critical system or equipment

Major facility damage

Severe environmental damage

Mission-critical security failure

Unacceptable collateral damage

II Significantly degraded mission capability or unit readiness

Permanent partial disability or severe injury or illness

Extensive damage to equipment or systems

Significant damage to property or the environment

Security failure

Significant collateral damage

III Degraded mission capability or unit readiness

Minor damage to equipment, systems, property, or the environment

Minor injury or illness

IV Little or no adverse impact on mission capability or unit readiness

Minimal threat to personnel, safety, or health

Slight equipment or systems damage, but fully functional and

serviceable

Little or no property or environment damage

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Probability Categories

Category Description

A Likely to occur immediately or within a short period of time

Expected to occur frequently to an individual item or a person or

continuously over a service life for an inventory of items or a group

B Probably will occur in time

Expected to occur several times to an individual item or a person or

frequently over a service life for an inventory of items or a group

C May occur in time

Can reasonably be expected to occur sometime to an individual item

or a person or several times over a service life for an inventory of

items or a group

D Unlikely to occur, but not impossible.

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DIAGRAM SHEET 2-4


The ORM process should be applied as a cycle; when additional hazards are identified, the process

should be repeated and appropriate adjustments made.

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PROBLEM SHEET 2-5

THE FIVE-STEP OPERATIONAL RISK MANAGEMENT (ORM) PROCESS PRACTICE

A. INTRODUCTION

The five steps of ORM can be applied to just about any decision-making process to increase

operational effectiveness by anticipating hazards and reducing potential for loss. Use this activity

to practice applying ORM to the scenario below.

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

Form groups of three or four. Read the scenario below and practice applying the five steps of the

ORM process to the scenario.

E. PROBLEM

You have been asked to serve on your command’s Morale, Welfare, and Recreation (MWR)

committee. Your first task it to develop a plan for the command picnic scheduled next month.

How can you use ORM to reduce the risk of an accident at the picnic?

1. Identify hazards.

2. Assess hazards.

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5. Supervise.

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JOB SHEET 2-6

FIVE-STEPS OPERATIONAL RISK MANAGEMENT (ORM) PROCESS ASSESSMENT

A. INTRODUCTION

This assessment allows you to apply the five-step ORM process to a given scenario. Use the five-

step ORM process to reduce the potential for loss and increase the probability of a successful

mission.

B. EQUIPMENT

None

C. REFERENCES



None


F. JOB STEPS

Scenario: You’re driving on the interstate and get a flat tire. You decide to change your tire

alongside the interstate. How can you use the five-step ORM process to increase your probability

of changing your tire successfully?

Answer the following statements for the scenario.

1. Identify the hazards.

2. Access the hazards.

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5. Supervise.

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OUTLINE SHEET 3-1

THE ABCD OPERATIONAL RISK MANAGEMENT (ORM) MODEL

A. INTRODUCTION

In this section, you will interpret the ABCD ORM Model. You will learn Time-Critical Risk

Management (TCRM) and the ABCD ORM Model and its usage.

B. OBJECTIVE



THE ABCD ORM MODEL IAW ESTABLISHED SAFETY REQUIREMENTS, APPLICABLE

TECHNICAL DOCUMENTATION, AND DIRECTIVES

C. SECTION OUTLINE


2. TCRM

3. ABCD ORM Model Diagram

4. Assess the Situation

5. Balance Resources

6. Communicate to Others

7. Do and Debrief

8. Practice

9. Section Review

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TIME-CRITICAL RISK MANAGEMENT (TCRM) AND THE ABCD MNEMONIC

A. INTRODUCTION

The ABCD Operational Risk Management (ORM) Model is the practical application of the five-

step ORM process in a time-critical environment that helps individuals focus, increases Situational

Awareness (SA), and improves performance.

B. REFERENCES


C. INFORMATION

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DIAGRAM SHEET 3-3

THE ABCD OPERATIONAL RISK MANAGEMENT (ORM) MODEL

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PROBLEM SHEET 3-4

THE ABCD OPERATIONAL RISK MANAGEMENT (ORM) MODEL EXAMPLE

A. INTRODUCTION

The ABCD ORM Model should be used during time-sensitive missions or tasks where time

constraints make it impossible to use the in-depth, five-step ORM process. Use this activity to

practice applying the ABCD ORM Model to the scenario below as each portion of the model is

discussed in class.

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

Listen to the scenario described by your instructor. Then, use your problem sheet to practice

applying the ABCD ORM Model to the scenario.

E. PROBLEM

How can you use the ABCD ORM Model to mitigate risks and adjust your actions?

A – Assess the situation.

B – Balance resources.

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C – Communicate to others.

D – Do and Debrief.

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PROBLEM SHEET 3-5

THE ABCD OPERATIONAL RISK MANAGEMENT (ORM) MODEL PRACTICE

A. INTRODUCTION

The ABCD ORM model should be used during time-sensitive missions or tasks where time

constraints make it impossible to use the in-depth, five-step ORM process. Use this activity to

practice applying the ABCD ORM model to the scenario below.

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

Read the scenario below and practice applying the ABCD ORM model to the scenario.

E. PROBLEM

The ship is preparing to get underway. On the top deck, the Leading Petty Officer (LPO) is trying

to organize his line-handling team, but finds out that two of his normal members have been

replaced by two new members with no experience. To add to the LPO’s frustration, one of the new

members seems more concerned with his cell phone than the task at hand.

The mission is to properly handle the lines to facilitate the ship’s departure on time. What would

you do?

1. Coach the new members.

2. Delay operation.

3. Take one member out and watch the other closely.


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D – Do and Debrief.

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JOB SHEET 3-6

THE ABCD OPERATIONAL RISK MANAGEMENT (ORM) MODEL PRACTICE

A. INTRODUCTION

This assessment allows you to apply the ABCD ORM model to a given scenario. Use the ABC D

ORM model to reduce the potential for loss in a time critical scenario.

B. EQUIPMENT

None

C. REFERENCES



None


F. JOB STEPS

Scenario: While walking alone in a passageway onboard ship, you notice a cable has caught fire.

There is a sound-powered telephone in the area. How can you use the ABCD ORM model to

reduce the potential for loss or damage to the ship?

Answer the following statements for the scenario. When you debrief the event, explain why your

solution to extinguishing the fire was or was not the best choice.



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D – Do and Debrief the event.

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OUTLINE SHEET 4-1

OPERATIONAL RISK MANAGEMENT (ORM) PRACTICE AND ASSESSMENT

A. INTRODUCTION

In this section, you will apply the Operational Risk Management (ORM) process to an evolution.

You will view a demonstration and complete the practice and assessment.

B. OBJECTIVE


GIVEN APPLICABLE TECHNICAL DOCUMENTATION AND DIRECTIVES APPLY THE

ORM PROCESS TO AN EVOLUTION IAW ESTABLISHED SAFETY REQUIREMENTS,

APPLICABLE TECHNICAL DOCUMENTATION, AND DIRECTIVES TO 100% LEVEL OF

ACCURACY

C. SECTION OUTLINE


2. The ORM Process

3. Practice

4. Lesson Review

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DIAGRAM SHEET 4-2

THE OPERATIONAL RISK MANAGEMENT (ORM) PROCESS FLOWCHART

The following flowchart will help you use the ORM process to identify risks and make risk

decisions.

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PROBLEM SHEET 4-3

OPERATIONAL RISK MANAGEMENT (ORM) PRACTICE

A. INTRODUCTION

The five-step ORM process should be used when time constraints have not been placed on risk

management planning. The ABCD ORM model should be used during time-sensitive missions or

tasks when it is not feasible to use the in-depth, five-step process. Use this activity to practice

applying both ORM processes to your own scenarios.

B. EQUIPMENT

None

C. REFERENCES


D. DIRECTION

Break into groups of two or three. Together, brainstorm two scenarios: one in which you would

use the five-step ORM process and one in which you would use the ABCD ORM Model. Write

each scenario below and then apply the ORM process to the scenario.

E. PROBLEM

Scenario #1 – The five-step ORM process

Scenario #2 – The ABCD ORM Model process

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