Managing Organizational Risk

By Tim Hyden

At a time when public safety personnel must be vigilant in making sure that our actions match our highly regarded reputation and intent, there seems to be a surplus of new challenges that could negatively affect the very attributes that define our professions. That’s not to say that the need to ensure our continued positive perception in the eyes of the public has ever been a question, but events of the past few years have given concern to a gradual shift in the vision of our meaning and purpose. Consider a white paper released in early 2010 by the Cumberland Valley (PA) Volunteer Firemen’s Association, which gives great clarity to the ways in which we are sometimes our own worst enemy when it comes to a damaged reputation. Although the paper, entitled “Fire Service Reputation Management,” is geared heavily toward the fire service, it is certainly applicable to any publicly funded organization and is well-worth a look.

Negative or questioning internal perspectives by our own personnel and sometimes-critical external views of our public can be detrimental–perhaps even dangerous–to the future of the public safety profession. Taking appropriate action today through checks and balances meant to achieve at least an awareness level of understanding of these concerns, especially for our newer and future personnel, may serve to lay a foundation for avoiding the negative occurrences of tomorrow. Moreover, doing so will likely contribute to a more favored relationship with our public and improved morale within our organizations.

RISK DEFINED

The specific circumstances surrounding a harmful event can be wide and varied. You may believe that these occurrences are limited to injury to our personnel or damage to facilities or equipment, but there are many other areas within an organization where loss can occur. Nearly every time this type of events occurs, the organization’s reputation feels the pain. By managing the levels of risk we are taking within our organizations we can control and even possibly avoid these situations. Managing organizational risk involves defining what risk is, identifying where risks exist, and developing programs, policies, and procedures to help reduce the chances of exposure. This process, in turn, reduces the probability of occurrence.

Figure 1 provides a list of those areas that can cause trouble if allowed to go unchecked. Take a moment to review this list while considering whether or not you are doing all that you can to ensure complete compliance within your organization when it comes to required inspections, tests, record-keeping, etc. If you are less than 100-percent compliant in any area, complete a risk assessment of your agency. All of these areas, as well as the many others that apply to most organizations today, can be embraced and controlled by a proactive risk-management plan.

Fire Department Leadership and Management: Managing Organizational Risk

Figure 1

When viewed from this perspective, it is obvious that full participation up, down, and across the organizational ladder will be required to develop an initial view of where to begin.

THE PROCESS

The benefits of the risk management process become quite clear once you understand the objectives of the plan. Although a written policy should be in place, the acceptance of the concept by all personnel and the resulting actions taken because of the policy have the most direct effect on the success or failure of the risk-management program.

There are generally five steps (Figure 2) involved in the development and execution of a risk-management plan, beginning with an honest and uninhibited review or risk assessment of an organization’s internal operations. This step involves all relevant personnel providing input into what, for example, they feel are the critical areas (those that can affect the well-being of the organization and its membership, including physical safety and organizational liability), the more moderate issues (those that may erode an organization’s reputation), and matters that may cause budgetary concerns because of unexpected costs.

Fire Department Leadership and Management: Managing Organizational Risk

Figure 2

Once the raw data is obtained, begin a prioritization process to further categorize and prioritize the identified concerns. The evaluation process should consider the probability of occurrence, the severity of the consequence if an incident does occur, and a determination of the level of exposure. This information will allow you to draw a conclusion as to whether or not the present or potential level of exposure is acceptable. If acceptable, then provide appropriate documentation to ensure that all personnel are aware of any related policies or procedures to keep the risk within limits. If not acceptable, put into play a mitigation process to reduce the level of risk and bring it back within established limits. Either of these determinations is generally within the control of the organization, with the level of control usually based on current or past experience and operating procedures.

After a particular risk has been identified and prioritized, the mitigation process begins. This involves committee-level input to determine the formulation of alternatives or solutions followed by a selection of the alternatives that best serve the organization. A full understanding of the implications of selecting a particular alternative would include, for instance, the assurance that it aligns with organizational goals. Again, it is important that the entire process involve knowledge-sharing and commitment on the part of all participating members. As a key side-benefit, this process establishes a baseline for future reference and review.

Implementation of the mitigation process begins with planning and preparation. The implementation step should include issues such as timelines, anticipated problems or issues, and a determination of the affected individuals or groups. Once identified, fully educate those individuals who will be part of the implementation process and those who will be affected by the change to ensure a complete understanding of the background and expected results. Success or failure of the process will often be dependent on the effort put into the education and training stage.

The final step in the process is the integration of a monitoring phase, meant to ensure that you realize the successes determined to be achievable in the evaluation and planning processes. Constantly reevaluating mitigating actions can help you make adjustments to the overall process.

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As with any program, the level of effort and dedication that is put forth by department administration and the personnel involved will determine your level of success. There is little doubt that any effort to reduce the level of risk within an organization will have at least some constructive effect; a continued adherence to the intent and purpose of the plan will determined the depth and longevity of its effect. Some level of positive return on that effort is virtually guaranteed, as it contributes to a sense of organizational consistency, purpose, and pride.

REFERENCE

Cumberland Valley Volunteer Firemen’s Association. Fire Service Reputation Management. (2010). http://www.firefighterbehavior.com/sitecontent/index/page/White%20Paper

Tim HydenTim Hyden is the training and safety officer for East Manatee (FL) Fire Rescue and a 19-year veteran of the Florida fire service. He has an associate degree in fire science and an advanced technical certificate in fire science administration, and is a graduate of the Florida Fire Chiefs’ Association Emergency Services Leadership Institute. He holds several state certifications through the Florida Bureau of Fire Standards and Training; is a contributing writer to Florida Fire Service and Fire Engineering magazines; and speaks on leadership, motivation, officer development, risk management, and marketing.

 

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