What Is Risk in SMS Programs
Risk in aviation SMS programs is a tricky subject. Not only is it treated differently in different organizations, but safety professionals tend to get up in arms in front of differing opinions. The truth is that “risk” is a terribly nebulous word and concept, with multiple ways to use it. What’s important is NOT that you “know what risk is” so much as you “define what risk means to your organization.”
Here are multiple ways that “risk” is used in the risk management industry, in descending order of common use:
- The likelihood and severity of safety mishap occurring;
- Negative safety outcomes, such as damages to equipment or aircraft, injuries, deaths, etc.; and
- Loss of safety control (i.e., “dangerous condition” or “risk event”).
Risk analysis is an activity whereby safety management attempts to quantify or quality a risk. Generally, this quantification/qualification is an assessment used to identify:
- Amount of exposure;
- Quality of current risk controls; and
- Needed risk controls.
All of these elements factor into what a risk is. The one common factor in nearly all risk management activities is the use of the risk matrix, as it's the most efficient tool to document severity and probability. Here are 5 ways to analyze risk in SMS programs.
Historical Analysis (Reactive Risk Management)
Historical Analysis is a risk analysis activity used to safety incidents that have already occurred. It is probably the most common of all ways to analyze risk in SMS programs. Some example activities of historical analysis are:
- Issue management;
- Issue review/validation;
- System policy review (i.e., have policies/procedures been classified with issues?);
- Trend analysis; and
- Data analysis and data mining.
Some sources online will say that historical analysis is useful for predictive analysis, however this is a dangerous assumption because, “Past successes are not future guarantees.” The primary goal of historical analysis is to understand:
- Where the safety management system is performing;
- Where the SMS program does not maintain an Acceptable Level of Safety; and
- Where the safety program needs further risk controls.
Historical analysis is probably the most common way to analyze risk, and should be the first type of risk analysis activity that SMS programs implement.
Exposure Analysis (Proactive Risk Management)
Exposure analysis is a risk analysis activity with the goal of proactively identifying exposure to resources located in identified hazardous areas. It is one of the best ways to analyze risk in SMS programs, and evaluate resources. These resources can be:
- Aircraft; and
- Other assets.
Exposure analysis will uncover how these resources are vulnerable in the given “system.” The system is the collection of:
- Risk control measures;
- Safety policy;
- Safety procedures;
- Existing Norms (Human Factors);
- Facilities and other structures; and
- Other infrastructure.
Exposure analysis is proactive risk management because it actively seeks out areas of the SMS program that can be improved before safety mishaps occur because of the inadequacies. Risk analysis activities that fulfill Exposure Analysis are:
- Leading indicator development;
- Safety policy review;
- Emergency Drills;
- Safety procedure analysis;
- Safety inspections; and
- Internal Safety audits.
All of these activities are designed to seek out exposure before accidents occur.
Scenario Analysis (Predictive Risk Management)
Scenario analysis is a predictive risk management activity. It is used when safety management needs to consider how the safety management system will perform in hypothetical situations (that have not occurred yet).
The two most common uses for this are for:
- Management of Change; and
- Safety Cases.
Scenario Analysis can be used with many common risk analysis tools, so long as the analysis is being performed on a hypothetical scenario:
Goals of Scenario Analysis are to “stress test” the SMS program to see how it handles novel situations.
SMS Shortfall Analysis (Qualitative Risk Analysis)
- Reactive risk management is designed to understand how and why safety incidents occur; but
- These tools don’t actively identify how the SMS program failed.
SMS Shortfall Analysis is designed to clarify two different things. First, where did the SMS program fail in terms of:
- Risk control measures;
- Human action; and
- Safety policies and procedures.
Second, was the failure the result of:
- SMS bureaucracy; or
- Safety culture.
The outcome of performing this analysis is a chart which visually identifies the extent and makeup of the failure, as well as a table that specifically identifies the different failures.
It is called SMS Shortfall Analysis because this it is a discovery tool for understanding the shortcomings (i.e., shortfalls) of your SMS program in safety incidents.
Event Trees (Quantitative Analysis)
Event trees are a simple quantitative risk analysis tool establish probabilities for various risk occurring after a hazard – hence, “quantitative.” Event trees involve establishing:
- Establishing a hazard (dangerous condition);
- A list of all various outcomes; and
- The interceding events between the hazard and each outcome.
Depending on how many interceding events can lead to certain outcomes, you can establish which outcomes are most likely in terms of probability.
For more information on Shortfall Analysis, see this ebook:
Published June 2017. Last updated April 2019.