Eliminate Operational Risk
The Opportunity
In Waging War on Complexity Costs, we discuss how complexity costs grow geometrically. However the same can be said of operational risk. In fact, in today’s complex world it is no longer sufficient to simply manage risk. Instead, you must relentlessly eliminate risk, wherever it is found. The idea of risk management itself—that there are acceptable levels of risk that you can manage—is somewhat of a misnomer, creating the illusion of but not the reality of reliability.True high-reliability organizations (HROs) understand this. They see risk lurking around every corner and build the structures and practices to relentlessly root it out.
While this notion is clearly applicable to process industries such as energy and chemicals, companies from all industries need to establish high reliability in their operations—or suffer from the lack of it. From retailers to financial services, companies must master elimination of risk to ensure business sustainability.
Wilson Perumal & Company is uniquely qualified to help you seek out and eliminate risk in your operations. Our expertise in this area is rooted in part in our deep experience with the US Navy’s Nuclear Power Program, cited by many as the pre-eminent HRO. We can help you develop and implement the principles, operational practices, and mechanisms to transform your organization into a true high-reliability organization—to achieve the substance and not just the trappings of an HRO.
Top-down Risk Assessment
"Failure does not strike like a bolt from the blue; it develops gradually according to its own logic."
— Deitrich Dörner, The Logic of Failure
The big risks are those that are infrequent but catastrophic—commonly called major hazards. But since these are so infrequent, companies are often unaware or of what their level of risk really is—and it’s too late to wait until something happens. Read more
In absence of this clarity, many companies focus on more frequent but less catastrophic risks, and remain blind to major hazards. If this is your situation, we can help you assess the level of risk in your operation and the adequacy of your risk elimination program. We can help you answer questions such as:
- What are the major operational hazards to my business?
- How exposed is my business to these risks?
- How helpful are my current risk management activities? Are they sufficient?
- What are the key elements of an effective risk elimination program in my business? What am I missing?
In a complex system, piecemeal risk management activities are not sufficient to deal with major hazards. We take a top-down approach to address the combined impact of your risk elimination practicies.
Create a High-Reliability Organization (HRO)
True HROs are able to operate with extraordinary reliability and a remarkably low number of incidents. Such organizations are few, and even fewer are those that successfully transform themselves from a non-HRO state into a true HRO. Read more
More commonly, organizations aspire to HRO status and launch well intentioned initiatives that create the aura but not the substance of an HRO. These companies often lead with educational initiatives that seek to change values and culture, but not the organizational structures, systems, and practices that truly define culture. We understand what it really takes to achieve this select status and can help you transform your organization into a true HRO. We can help you answer:
- What should be the key principles on your HRO program? How do you best affect these principles in your organization?
- What are the set of operational practices and mechanisms that will truly change your culture and transform you into an HRO?
- How do you implement these within your organization?
- What is the value to your organization of becoming an HRO?
Case Studies
Read about our client experience in this area:
- Operational and risk improvement for a leading integrated energy company. Read more
