Decision Making / 3 / 3.8

3.8 MAJOR RISK KEY PERFORMANCE INDICATORS

In the cases studied in this and the previous chapter a number of cues were identified ‘after-the-fact’. Coroner Shane Madden makes the argument that a reasonable person, presented with what was reasonably known (or could have been reasonably found out with a little investigation), that is, a reasonable person presented with these cues, should have been concerned about problems that continued to develop unabated. Madden’s argument is a compelling one. The cues mentioned were indicators of the health of the system. They signified that problems were growing, and that a reasonable person should have been worried about what they saw.

To make use of this as a management tool requires ‘before-the-fact’ identification of the cues and recognition of potential consequences, then routinely managing the problems these cues suggest might be growing. This, of course, is the intent of risk management, noting that in these cases risk management failed because the cues were either not recognised or were ignored. Key performance indicators, indicators of risk-management issues, which might have been established for routine management of Black Hawk helicopter training operations, are summarised in Table 3-1.

Whilst the actual consequences, in the right-hand column, could not have been known, routine risk assessments should have resulted in compilation of educated assessments and forecasts of likelihood and consequence. Risk-management processes are described in detail in Australian /New Zealand Standard (AS/NZS 4360: 1999). See Chapter 7. This should have been part of routine risk management. That routine risk management failed (failed in its implementation, or failed for organisational, political, or other reasons) is profoundly important. In this book, an attempt has been made to identify ways of correcting such failures through appropriate use of relatively simple and accessible qualitative analytical techniques. These can be backed up with complementary quantitative analytical techniques should they be needed.

I have little doubt that many managers would claim to be able to create a table of Major Risk Key Performance Indicators, such as Table 3-1, without the tedium of investigating and mapping of systemic causality advocated in this book. I do not challenge the capacity of highly experienced managers to do so. However, what I would ask is: at what cost have they gained their experience? I would also argue that an intelligent non-expert could use the techniques explained here to routinely and very effectively manage risks. Diligence might be an essential pre-requisite, but little prior experience is needed.