Aviation Safety Software Blog by SMS Pro

Going From Reactive to Predictive Risk Management in Aviation SMS

Written by Christopher Howell | Oct 7, 2018 2:00:00 PM

Extending Risk Management Education to Upper Management

Safety managers are tasked with "safety management" which can be considered "risk management." As they practice risk management activities, safety managers are expected to actively "react" to reported safety issues or audit findings.

This activity of "putting out fires" is part of the reactive risk management process that your company is probably pretty good at performing. Otherwise, your company would not still be in business.

But what is involved "under the hood" in reactive risk management and how does an operator truly benefit from this collected safety data and move their risk management strategies to the predictive phase?

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In their daily duties, safety managers are juggling a lot of moving parts that the average operational department head or accountable executive may be totally unaware of. Furthermore, there will be considerable data that comes from modern safety systems that can assist upper management in their "operational" decision-making processes.

How do you collect this "safety data" and package it for other managers to easily use? How do you maximize the utility of data collected in reactive risk management activities to prepare for predictive risk management?

SMS Risk Management Processes Are Not Traditional Safety Program

An aviation safety management system (SMS) is a system and not the traditional "safety program" that many aviation service providers have had in the pre-SMS era. This "SMS" thing we've been seeing for the past dozen years is:

  • structured;
  • formal;
  • participatory (applicable from line employees to upper management)
  • driven from top management; and
  • business focused (integrated into operations).

Today, safety managers have more responsibilities with an SMS than with traditional safety programs. Traditional safety programs were not seen as "critical" to organizational success. Yet today, an operating certificate is in jeopardy when upper management is unable to demonstrate a properly implemented and functioning SMS. The stakes are higher.

Due to the higher stakes, and regulatory requirements, there will be active involvement from upper management as regular monitoring of SMS performance is required. So while safety managers must be comfortable with aviation risk management principles by default, it is a best practice that the accountable executive and upper management have some rudimentary understanding of modern aviation risk management practices.

Hazards, Risks, and Risk Controls Are Managed Simultaneously

As we focus on aviation risk management, safety managers and operational department heads are constantly managing:

  • hazards;
  • risks; and
  • risk controls (also simply known as controls or control measures).

Risk management strategies revolve around monitoring and controlling risk in your "system." As your "systems" are being monitored, safety data enters the risk management system from:

  • Reported safety issues from employees, vendors, customers, and other stakeholders; and
  • Audit findings and concerns.

These "safety issues" that enter the risk management process are:

  • Analyzed (safety risk analysis);
  • Risk assessed to determine risk priority;
  • Hopefully classified (for later reports and for predictive risk management); and
  • Treated using corrective actions and preventive actions (when necessary).

Risk related to these reported safety issues can be controlled by:

  • Mitigation (trying to prevent them from happening or reducing severity should the event occur);
  • Recovery (the issue happened, now let's keep the situation contained);
  • Avoidance (keep away from the hazards); or
  • Transference, when possible (insurance company, contractor).

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Reactive, Proactive, and Predictive Risk Management

Most safety managers will recognize:

  • Reactive risk management (immediate treatment of reported issues);
  • Proactive risk management (not in response to immediate risk); and
  • Predictive risk management (looking into the future based on past performance).

Reactive risk management is where all new safety programs begin, including aviation SMS. This is where traditional safety programs operated and seldom did they mature to be able to predict future events based on past behaviors. There are reasons that traditional safety programs did not mature to practice predictive risk management, including:

  • lack of top management support and participation;
  • no expectation (requirement) of continuous improvement; and
  • lack of effective mentoring and oversight activity.

Consequently, traditional safety programs never matured beyond reactive risk management. Traditional safety programs were one of those "feel good" programs that demonstrate management's concern over employee welfare. There were

  • no standards,
  • no regulatory requirements and
  • little expectation from management to get a return on their investment.

Just because you now have an SMS doesn't mean you will automatically mature to the predictive phase. Unless your company has an adequate safety budget and upper management is committed to safety, then this is where you will stay, i.e., in the reactive phase. Moving from reactive to predictive requires a more mature vision of how aviation SMS adds real financial value to the organization.

Management must change their mindset from not expecting a return on their SMS investment to one where they expect an ROI. In order to achieve these financial benefits, there must be adequate investment in:

  • SMS training;
  • Qualified safety personnel; and
  • Access to industry-accepted SMS tools to collect, store, and present SMS data.

Have You Read

Every Operator Engages in Reactive Risk Management

There is no way any aviation service provider can conduct daily operations without adopting some form of reactive risk management processes or strategies. You don't need a traditional safety program or an SMS to practice reactive risk management.

Reactive risk management is easy to understand. Put out fires as they come up. The more fires, the more visible the safety team is. If you don't put out the fires, you won't be operating for long.

When you have an SMS, you need safety reports and audit findings to analyze and develop ways to improve processes. The more safety reports that enter the reactive risk management pipeline, the more practice your safety team receives as they become experts at dealing with minor safety concerns.

Take a look at the image below that demonstrates the relationship between an SMS' safety risk management (SRM) processes to the processes in safety assurance (SA). Reactive safety reports and audit findings enter SA under the "Data Acquisition" block. As safety teams analyze safety reports, they will be reviewing the system design (SRM) with a focus on:

  • Identified hazards;
  • Risks; and
  • Risk controls.

As the safety team practices reactive risk management, your organizational processes improve as you shore up "weak" or "unprotected" operational areas by implementing additional controls or reinforcing weak risk controls. Your "system" will incrementally become better, safer, and more reliable. There will also be less budget required to repair the damage that had historically been an "accepted way of doing business."

In order to benefit fully from predictive risk management, you will need to develop

  • a safety reporting culture that supports strong hazard identification capabilities among employees; and
  • a willingness to participate in the SMS and report identified safety concerns.

During the reactive risk management phase (which you will never leave), you want employees to report everything, regardless of how minor. You need ALL minor incidents and close calls reported because these minor events are not only improving your "system" by strengthening risk controls but are also paving the way to more reliable and useful predictive risk management activities. Safety culture is very important. You may not have a healthy safety reporting culture now, but you will need one if you wish to get to the predictive phase.

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Healthy Safety Cultures Practice Proactive Risk Management

Proactive risk management is where a more mature aviation SMS needs to be, but this should never be considered the final solution. Nor should you believe that you will abandon reactive risk management activities. You will always be reacting to the operating environment because the aviation industry operates within an open, largely uncontrolled "system" that continues to evolve. We will never be able to remove all risks because we don't know what new hazards may evolve in the future.

During reactive risk management activities, your company has been documenting all identified hazards and you are keeping most of the fires from starting.

Instead of running around putting out fires, the safety team will continuously promote the aviation SMS. The focus is to keep safety hazards at the forefront of all employees' minds as they perform their daily duties. Safety teams may be seen:

  • Developing checklists for employees;
  • Reviewing and revising operational procedures;
  • Managing documentation and risks associated with planned changes (management of change);
  • Monitoring SMS performance with the accountable executive and top leadership;
  • Developing safety-related reports for upper management (safety assurance); and
  • Communicating safety initiatives with employees (safety promotion).

In short, reactive risk management is putting out fires. Proactive risk management focuses on maintaining an environment where fires are less likely to start. And if a fire does start, your proactive strategies should be structured in a way that the fire can be contained more easily.

Predicting Future Events Based on Your Safety Record

Finally, there is predictive risk management. Imagine that the safety team has a crystal ball and is able to tell management that they will have at least one serious event within two years. How is this possible?

In order to predict events, the safety team will need to perform considerable work upfront in the reactive risk management phase.

Let's first dispel the notion that if your SMS has matured to the predictive risk management phase, you will never suffer consequences from an event. This is pure poppycock and wishful thinking. There will always be fires to put out.

If you don't have fires, somebody is not doing their job. Safety management is akin to quality management with the philosophy that there is always room for improvement.

Your operating environment is constantly changing. Hazards, their associated risks, and risk controls must be continuously monitored. Furthermore, risk management strategies must be revised to accommodate change.

Safety performance monitoring is required in order to comply with the SMS' "Safety Assurance" component: "Continuous improvement of the SMS." Furthermore, the accountable executive is responsible for regularly reviewing organizational safety performance and directing actions necessary to address substandard safety performance.

When the safety team has tools to easily and effectively classify past fires, then they will be armed with potentially valuable data to detect trends and predict future events. These tools don't have to have elaborate statistical formulas that confuse everybody.

If your SMS and risk management strategies are too complicated, people won't understand the processes and eventually quit participating. Keep it simple. Otherwise, you are needlessly introducing significant risk into your aviation SMS. In addition, you will never remain in the predictive risk management phase for any prolonged period of time. The benefits of predicting future events will evade your company; therefore, management will not maximize their return on investment.

Besides the lack of top management support, the second most common reason for the failure of SMS is the departure of a safety manager who holds all the information on the intricate details of the SMS. If only one safety manager knows how to detect trends at your airline or airport, you should understand this trend:

Your SMS program will immediately return to reactive risk management strategies and suffer a severe setback.

The moral of the story: train in depth. Have a backup safety manager, even if it is an assistant.

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Final Thoughts on Playing in the Predictive Phase

All aviation service providers conduct reactive risk management strategies whether they know it or not. This is true regardless of whether they are implementing an SMS. No business can remain afloat without managing risk and reducing loss.

Your organization may take two to three years before maturing enough to concentrate on proactively managing risk. This two-three year estimate is the time necessary to improve your safety reporting culture which drives the accumulation of safety report data. This safety report data is critical to identify trends based on historical safety performance. Without an easy, sustainable process to store and retrieve safety data, there can be no predictive data analysis to detect trends.

Only stable safety departments will reach the predictive phase. This is the ideal place to be. Mature, fully functioning SMS will be practicing all three risk management styles. You never leave reactive and proactive phases. You merely grow into them.

In order to achieve the predictive risk management phase, you will never succeed without a modern aviation risk management software program. The predictive reports are too onerous to create each year without an automated SMS database solution.

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Last updated November 2024.