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It is obvious that risk and uncertainty analyses can and will always be challenged by opposing stakeholders not satisfied with probability assessments. They will base the challenge based on their subjective, modeled or even „pseudo statistical“ approaches. Under the excuse of limited or poor available knowledge of the problem at stake some stakeholder may invoke the „unrepresentative“ character of expert analyses. In addition they will try to avoid making sensible decisions based on “mistrust„ in the results. Indeed they will feel their gut feeling is necessarily better than a science based approach.
The advantage of using ORE is that it allows transparent discussions including ranges estimates, variability of parameters and uncertainties. That addressed stakeholders not satisfied with probability assessments, thus leading to healthier debate. In addition, in our experience, it helps finding consensus.
During the implementation of decisions it is common for decision-makers to seek for further protection. They generally add conservatism and use traditional engineering frameworks of “defense-in-depth.” This is typical of deterministic approaches to hazard and risk management. In those approaches engineers add layers of protection, without explicitly evaluating their effectiveness, to bound known uncertainties to, for example, “credible thresholds”. However, these approaches have limited effect in reducing the “unknown unknowns”, i.e. reducing the completeness uncertainty.
In particular, these approaches may lead to censored results such as:
As a matter of fact, accidents in all sorts of industries have shown that the „credible“ scenario established in this way oftentimes represent a strong censure of the possible and actually credible ones. Codes are generally not covering the full breath of situations that should be covered. Thus mitigations result severely under estimated.
The underlying principle has been that if a system is designed to withstand all the individual worst-case credible accidents, then it is “by definition” protected against any credible accident. That does not cover for uncertainties, inter-dependencies and common cause failures which unfortunately do characterize accidents in our world.
ORE Risk-Informed Decision-Making (RIDM) is a deliberative process that uses a set of performance measures (we call them success criteria), and other considerations, to “inform” decision-making. The ORE RIDM process acknowledges that human judgment has a relevant role in decisions, and that technical information cannot be the unique basis for decision-making.
ORE RIDM is applicable for decisions that typically have one or more of the following characteristics, independently from the financial stakes significance:
ORE has been used together with its companion methodology CDA/ESM (a Risk Adjusted cradle to grave project evaluation tool which replaces the NPV to support risk based/risk informed decision making in a number of industries).
Here are some examples:
We highlight below some aspects of Risk Informed Decision Making (RIDM), as recently discussed by NASA and USNRC, and compare them to ORE features to show how ORE deployment is feasible and beneficial.
Modern RIDM requires to acknowledge uncertainties, multiple hazards, multiple stakeholders and compliance needs, integrating stakeholders’ concerns and perceptions.
This leads to greater stakeholder participation in decision-making. In fact, technocratic decision processes, driven purely by rational technical considerations, are modified to integrate the concerns and the perceptions of stakeholders.
Modern RIDM requires the classic engineering/technical approach to risk assessment which includes:
and stochastic analyses such as:
are integrated in the decision making process. That is true even while recognizing that the knowledge of all the aspects of a given system under consideration is imperfect or not ready for analysis simultaneously at different stages of a project/operation development/life..
ORE builds a hazard and risk register that will accompany the project/operation thought its existence. The register is:
It is possible to transparently lay out all the argumentation behind the analysis itself, including the assumptions, hypotheses, parameters and their uncertainties for disclosure points. However ORE register structure and numerical techniques remain proprietary.
Thus ORE is again fulfilling RIDM requirements and provides decision-makers with a clearly informed picture of the problem upon which they can confidently reason and deliberate.
We could make many more considerations, but this is a blogpost, neither a book nor a course. Therefore we will be delighted to answer your questions. Just send them through the contact form or as a comment.
Building trust with Stakeholders not satisfied with probability assessments is possible if one deploys ORE within a Risk Informed Decision Making (RIDM) process. The approach helps achieving success by:
When applied to projects ORE RIDM helps avoiding: