Industrial Engineering

Management Risk by Asking: Is it worth it?

Management Risk by Asking: Is it worth it?

ISE Magazine October 2020 Volume: 52 Number: 10

By Douglas R. Handy

https://www.iise.org/iemagazine/2020-10/html/handy/handy.html

 

As you already know or have at least heard, there is risk in everything we do and say throughout every day of our lives.

There is risk in everything we eat, even if it is “healthy.” There is risk in everything we do, even if it is deemed “safe” by someone. There is risk in everything we say, even if we use manners and are polite. So when is risk “too much?”

Who decides when the risk is “OK” or “too high?”

That is the real question that we should be asking ourselves, our families, our co-workers, the companies we work for and with and even our recreation activities, associations and leagues.

In every culture, there are limits, guidelines and standards. Although these are different from culture to culture and society to society, boundaries and limitations have been set. Con-sequences and penalties occur when we go past the accepted limits, and even abolishment or persona non-gratis status may occur.

These risks take place in all aspects of our lives. In the realm of safety, risks can take place on a different level of thinking.

Most companies provide employees with a general level of understanding of the risks that the employees will face or be-come exposed to. This is a general Right to Know/Hazard Communication standard requirement as set by OSHA and most state and company policies. From an ergonomics standpoint, there is sometimes limited education and knowledge of proper body positioning and/or workstation layouts.

However, then there is the question that we all must ask: What is our risk acceptance level, from both a personal and a company perspective?

Of course, first we must be able to recognize the risks, and there are many effective techniques to help us and our employees accomplish that. Second, we then need to evaluate the risks, and again various methods and systems can help us better understand this. Then, regardless of the methods, techniques and systems used to determine or quantify these first two steps, we get to the question of risk acceptance levels.

To illustrate this, I have often used the following brief demonstration for both management and employee training and meetings. I begin by asking, “What is your risk acceptance level?” I then show them a standard mousetrap, in which I have placed a folded $1 bill, and then ask: “By a show of hands, how many of you would you risk breaking your finger(s) to get a $1 from a mousetrap?” explaining that if they are unsuccessful they will likely have one or more fractured finger bones and some pain. I acknowledge the responses and thank them.

I then show them a standard mousetrap, in which I have placed a folded $10 bill and ask: “By a show of hands, how many of you would you risk breaking your finger(s) to get a $10 from a mousetrap?” explaining that again if they are unsuccessful they again will likely have one or more fractured finger bones and some pain. I acknowledge the responses and thank them.

Then I show them a standard (and much larger) rattrap, in which I have place a folded $20 bill and ask: “By a show of hands, how many of you would you risk breaking your hand and fingers to get a $20 from a rattrap?” explaining that again if they are unsuccessful they will likely have several fractured hand and finger bones and significant pain. I then acknowledge the responses and thank them.

This demonstration gets plenty of discussion and conversation with management and employee groups.

Some initial feedback at times from management is that the risks our employees take are different than the mousetrap/rat-trap demonstration. However, after discussion, it comes out that the exact risks might be different, the principles and processes are great analogies, as employees generally know what they want ($1, $10 or $20), they know what the hazards are, they know how the operations and equipment works and they have an idea of the risks.

Risk acceptance then brings up the question of “is it worth it?” Are the benefits of the desired results worth the risk consequences or not? You could relate this to a “should I take this shortcut or not?” mentality.

Once training and procedures are understood, the individual generally makes this decision aside from management input. There could be peer pressure, the perception that it would be faster, that I could gain incentives or many other factors. Yet for the individual, it comes down to their choices and behaviors.

For management, the question and decisions are on a different level. These decisions could be based on any number of management factors, which may include costs of equipment or guards, facility or process layouts, ability to manage operations and people, or various other considerations. Ultimately, management must decide on the initial “risk acceptance” levels, prior to the employees even being involved. The higher level of risk acceptance by management leads to more of the decisions of risks having to be made by employees.

From a moral and personal view, one question I often ask my management over the years is, “Would you allow your child or grandchild to be exposed to this risk?” Although this is a “loaded question,” the bottom line is that every employee is someone’s child, grand-child, parent or grandparent. How do you feel about the risks in your operation if it were truly your child or grandchild?

Although there are scales and some overview processes that can help guide you on risk assessments and levels, I have yet to see a true system or technique that fully quantifies an actual risk acceptance level. Yet this is something that we do on a minute-by-minute, day-by-day and project-by-project basis as management and as individuals. With employee injuries on the rise, along with costs generally skyrocketing, it is critical from a business standpoint to look at this. Often a higher upfront cost of management control of the risk acceptance levels (like guards, different equipment, etc.) will pay dividends many times over the price if the risk acceptance level of the employees is high.

A few ideas on improving the risk acceptance levels within companies, management and employees include

  1. Company level:
  • Education and understanding the risk levels at top levels
  • Determination of budgets, processes and equipment for operations
  1. Local and divisional management, including front-line management:
  • Education and understanding the risk levels at operations level top levels
  • Knowledge of equipment, work processes and workstation layouts
  • Determination of actual risk levels that will be acceptable
  1. Employee level:
  • Education and understanding of actual risks
  • Knowledge of equipment, work process and workstation design and procedures
  • Review and reporting system to management on risk level concerns for any operation

With these initiatives working in tandem, a clearer picture of expectation and risks will allow everyone to work jointly in getting everyone’s children, grandchildren, parents and grand-parents home safely every day.

The bottom line is: What is the risk acceptance level for your management and employees? What are the costs and consequences? And, is it worth it?”

References: IISE Magazine October 2020 (https://www.iise.org/iemagazine/2020-10/html/antony/antony.html)