The devil in the details: managing the unimaginable
Catastrophic risk is difficult to define, but in general, the term refers to events with multiple fatalities and a significantly negative cultural, mental, environmental, social, or financial impact.
Due of the rarity of these events, catastrophic outcomes are difficult to conceptualize or plan for. But by gaining an understanding of how to effectively evaluate and manage catastrophic risk, we can empower employees, speed up the decision-making process, and learn how to mitigate these risks and largely avert disasters.
What is catastrophic risk management? How and why is it used?
The most important thing to consider when thinking about catastrophic events is that just because something hasn’t happened yet doesn’t mean it won’t. In almost all cases, the event we are trying to prevent has never occurred within our individual histories, but it has happened somewhere to someone who likely thought the same way. By definition, these are extremely high consequence and very low likelihood events.
The only way to effectively mitigate a disaster is with a science-driven, bias-free approach that examines every probable outcome and cause from as diverse of a view as possible. When it comes to this level of risk management, we cannot rely on luck or probability, or even historical performance. We need to answer the tough questions: “Do I know how an event like this could occur? Do I have effective and active controls or barriers in place to prevent every potential outcome?”
The importance of diversity
When interrogating the risk assessment, it is important to consider the value of selecting a team with diverse backgrounds, skills, and experiences.
When creating controls, the further we can stay away from groupthink, the better. If everyone agrees, there is no one to play devil’s advocate, and no one to question the solution and take it one step further. In risk mitigation, everyone needs to play a different role: the more varied the team’s professional, cultural, or academic background can be, the better. Even within a tight-knit team, every individual has a role to play.
A bias-free approach
As humans, we rely heavily on personal, lived experience to define what we are afraid of. But when we talk about catastrophic risk, we are referring to an event that might only occur two or three times per year globally. With this in mind, it’s not reasonable to expect an individual on your team to have direct experience and intimate knowledge of such an event.
As the likelihood of occurrence becomes more remote, people worry about it less, when in fact the opposite should be true. Complacency leads to hubris, careless mistakes, unreported errors, and ultimately, catastrophic disasters.
This is why we must eliminate biases and false positives in any evaluation and trust the known scientific fundamentals. We cannot allow anomalous thought patterns (if this event has never occurred here before, what are the chances it will happen in my career here?) to create a sense of passive protection. This is not an educated, controlled barrier; it is a belief system based on a lack of knowledge and preparedness. Passive protection is no better than relying on the roll of a dice.
Take a science-based approach
Math, physics, and chemistry do not lie. By relying on scientific methods and taking an engineering-based approach, we can begin to form an answer to what can happen, how will it happen, and how can we prevent it from occurring. By systematically applying rigorous and detailed risk evaluation techniques against all failure modes and diligently evaluating control effectiveness a team, we can build the right preventive and mitigating barriers to ensure a lower risk environment for everyone.
How to approach the mitigation of catastrophic events
I started off by noting that astronauts never skip steps in space because the consequences are immediate. As engineers, we need to be treating our critical controls with the same diligence; we cannot skip steps or neglect erosion simply because we think the event is not likely to occur or to have a catastrophic outcome.
As an example, I strongly believe that one of the most misunderstood catastrophic risks is confined space. Leaders often see it as well-controlled and common place, and therefore not potentially catastrophic, but that’s not always the case.
Large, confined spaces need to be considered particularly carefully. The evacuation of a confined space like this is different than a space that holds one or two people. To start, it needs to be evacuated in the same amount of time determined by the prevalence of the hazardous gas. And more than likely, the atmosphere is not homogenous; one area can be safe while another area is in uninhabitable.
That is why it is important to have a well thought out, executable rescue plan that everyone understands. The roles and procedures need to be rehearsed and second nature so that when the time comes, lives can be saved.
Hatch brings a cross discipline of scientists, designers, and specialized engineers to all aspects of risk management. With our rich project history and global team of industry leaders, we are not afraid to ask the difficult questions, and with safety at the forefront of everything we do, we do not skip steps. We do our homework and we are unconditionally honest about risks and how to manage them.
Contact Camilo Romanha and Matthew Cramer for more on how to develop, install, verify, and improve your risk controls.
Global Director, Advisory
Matthew has spent the last 15 years working in pyrometallurgical and other heavy industry environments as an operational leader and consultant. He is passionate about implementable risk reduction programs and strategies and a staunch supporter of safety initiatives and their benefits. By working hand in hand with Clients Matthew is focused on creating a better world through the development and execution of fundamental changes to their operating models. Matthew has worked with Clients across North and South America, Europe, China and Africa.
Camilo has over 20 years of experience fostering innovation and shareholder return within leadership positions in global natural resources, energy, and infrastructure firms. He is currently devoted to driving major clients from risk management to strategic resilience, and to helping senior leaders in their move from defensive risk management to a forward-looking stance. In his work supporting program design and implementation, Camilo has worked with clients across all continents.