Another consideration that fundamentally shapes the capabilities of a function is whether there are significant risks involved in performing the tasks.
Consider a financial services firm that offers the product broadly known as ‘gold loan’. Let’s say, a customer has kept three separate pieces of ornament with the firm in order to obtain a loan. Let’s say the customer repays a part of the loan and comes to the counter to collect one of the ornaments. Let’s say the Operations Department employee handling the transaction overlooks the differences among the three ornaments in the pouch, and hands over the one the customer asks for. The next month, the customer does not pay the EMI, and is now not traceable. The firm now discovers that the value of the ornaments in the safe is lower than the outstanding amount of the customer.
So, clearly, the lending function in financial services organisations and the associated Operations, can be said to be high-risk. Similarly, the plant operations of companies in many industries – cement, petrochemicals, etc. – entail high risks. In organisations such as hospitals, air traffic control, thermal power plants, oil and gas installations, etc., not to mention even riskier, but rarer organisations, such as aircraft carriers and atomic energy stations, risks pervade tasks of most functions. Such organisations have been given a separate name for the past thirty years or so: High Reliability Organisations, HROs.
Risk Control and Management
Organisations take various measures to control and manage risks. The seemingly obvious one is strict process adherence. In fact, strict actions are typically taken against employees in HROs, who deviate from safety practices even when there are no consequences. Process adherence might also have worked in the case of the gold loan mentioned above. Do you always hold the railing while walking down a flight of stairs? Some of these organisations fix CCTV cameras to ensure you do – officers regardless of rank can often be found paying up the mandatory fines if caught not doing so.
It is more than process adherence. It is about creating a culture where all employees see safety and risk mitigation as their own responsibility. Whenever any task is to be undertaken, the relevant engineer will check for standard work instructions. If not available, they will write out the instructions, get it approved by the appropriate person, explain it to the workmen who will be performing the task, and then monitor the execution. Even if standard work instructions are available, they will still read it, get it approved for the job, and only then proceed with it. Interestingly, in HROs, typically, employees are rewarded for discovering and reporting hazards, with actual prizes for those who report the most number of them!
However, things are even more complicated. If there is an actual emergency in an oil and gas installation, then, apart from safety routines of congregating and leaving the premises, there is also tremendous empowerment of some role holders – everyone obeys them, regardless of rank.
Also, in HROs, typically, employees in crucial functions such as Operations, like aircraft pilots, need long years of experience before they are allowed to take charge of even one shift. Until the person is in a position to handle proper emergencies, they are not allowed to take charge even on a calm, uneventful day. And being able to handle emergencies entails having a fair grasp of all equipment of the plant, all processes, all systems, and understanding accurately and intuitively (there is no time to refer manuals) their interdependence.
Across functions, the process of going up the ladder entails having a fairly detailed understanding of all interdependent functions as well. Specific practices, such as compulsory all-hands daily meetings, ensure all Department Heads know about all processes and initiatives.
Strict actions are typically taken against employees in HROs, who deviate from safety practices even when there are no consequences.
Operating everyday with mind boggling risks of absolute disasters – and operating thus for years without any significant mishaps, this is a gigantic achievement. Banks call it Risk Management, and factories and HROs call it Safety Management.
Related Readings :
ARIAWAN A, SHORT L. True Risk Awareness Means Knowing The Rules-And When To Break Them, IndustryWeek, Leadership ( Jul 2018 )
