Transcript Slide 1

Managing the Corporate Beast
Elevating the Management of Safety to the Corporate Level
Through Enterprise Risk Management
David T.Deveau, P.Eng., M.B.A., B.E.D.S.
2013 International Aviation Safety Summit
Washington, DC - October 29-31, 2013
• The presentation will
– Examine gaps that continue to limit organizational
integration of safety
– Emphasize the importance of elevating safety to
the highest levels of the organization
– Offer a framework to help safety take its rightful
place alongside other company priorities
• Content
– Problem Statement
– The Evolution of Safety Management
– Safety in the Risk Pantheon
– Cautions, Challenges & Conclusions
Safety Management Consulting
P
r
e
s
e
n
t
a
t
i
o
n
2
Jazz
• Fleet of 127 aircraft
• Bombardier DHC8 100/300, Q400, and CRJ705
• 78 USA and Canadian destinations with
800 flights and 30,000 pax a day
• Bases in YHZ (HQ)/YUL/YYZ/YYC/YVR
• 5,000 employees
• Contract flying for Air Canada, Jazz Charters, Jazz Safety
Solutions & Other Services (Ground Handling, etc.)
• Previously operated 757 a/c for Thomas Cook Canada
David Deveau
• VP, Safety Quality & Environment
• Professional Engineer/MBA
• Chair Safety Subcommittee of National Airlines
Council of Canada (NACC) and Member of
Safety Council of Regional Airline Association (RAA)
• Principle: Jazz Safety Solutions
Safety Management Consulting
J
a
z
z
P
r
e
s
e
& n
t
e
r
3
Safety Management Consulting
4
There is a lot of good news for safety
• The profile of safety in aviation has grown over time
• Safety management is more sophisticated than ever
due to safety management systems (SMS)
• There is increasing recognition that safety issues can
be organizational in nature, and that safety itself
needs to be managed at the organization level
• This provides a much better basis for advancing
safety governance than existed when safety was
considered a purely operational consideration
Safety Management Consulting
G
o
o
d
N
e
w
s
5
If good news…So what is the problem?
• Safety still struggles to compete for status, attention
and resources along side other corporate priorities
(financial performance, commercial, etc.)
• This is not because safety isn’t seen as important
• For many at the top of organizations (outside the
safety role), safety remains an operational enigma
– Safety related risks just are not understood
– Safety and business functions often don’t
speak the same language
– Top decision makers can find it a
challenge to compare safety priorities
with other business needs
Safety Management Consulting
T
h
e
P
r
o
b
l
e
m
6
What the Problem Looks Like
Financial
Business Case
Safety
Business Case
Safety Management Consulting
T
h
e
P
r
o
b
l
e
m
7
Safety Management Consulting
8
• Safety has evolved from reacting to accidents to
proactively identifying and mitigating risks
Maximum
Improvements Proactive Approach
Like Safety
and Whole
Increased
Reporting (ASAP)
Organization
Investigative Sophistication
FOQA, etc.
Safety Culture
in Trending
Techniques
and Training and Analysis
(Heinrich
Incorporate
Accident Understanding
Ratio)
Investigation of Human
Improves
Factors
Machine
Design
TIME AND MATURITY
Safety Management Consulting
E
v
o
l
u
t
i
o
n
9
• Like other management systems, safety has evolved
from being random to more predictive in nature
(recently, SMS has helped with this evolution)
Predictive
Proactive
Reactive
Random
Safety Management Consulting
P
r
o
a
c
t
i
v
i
t
y
10
• At the same time, safety silos are being replaced
by integrated, cross-functional systems
Safety Management Consulting
I
n
t
e
g
r
a
t
i
o
n
11
Safety Management Consulting
Embedded
Systemic
Unified
•Inter-related processes
interact in
sophisticated ways
•Highly functional,
coordinated processes
work across multiple
business unit
•Highly evolved system
that permeates all
aspects of the
organization
Common
•Process consistency
is evident with
common goals
Disconnected
•Isolated
business
processes in
place
Safety
Management
Financial
Management
S
y
s
t
e
m
E
v
o
l
u
t
i
o
n
• Although safety is more organizationally integrated
than ever, it still hasn’t been integrated into
organizational culture and governance as much as
other management systems (finance, HR, etc.)
12
• A sure sign of how fundamental something is to an
organizations success – and how valued it is in the
organization’s culture – is how deeply it penetrates
every aspect of how business is conducted
• How would we recognize if safety “…penetrates
every aspect of how business is conducted”??
– Safety can be found at EVERY level of an organization
– Safety is treated the same way by senior leaders than
other company priorities are
– Safety has status in the organizational structure, in the
business plan and on every agenda
– Safety exists throughout the hierarchy of the organization
Safety Management Consulting
H
i
e
r
a
r
c
h
y
13
How far in the organization’s hierarchy does safety go?
Shareholders
Board
Gap?
Executive Management
Senior Management
Safety Management Consulting
H
i
e
r
a
r
c
h
y
Non-Management
14
Safety Management Consulting
15
• Is safety leadership buried too deeply in the
organizational structure for significant influence?
• Are safety objectives and targets overshadowed by
other business priorities in company strategic plans?
• Is it a struggle to secure financial or other resources
for safety improvements as soon as senior decisionmakers become involved?
• Is there over-reliance on regulatory non-compliance
fear, bad press, scare tactics or other “safety cards”
to get support for safety?
• Do executives and the Board struggle to understand
and compare the relative importance of safety
investments compared to other business cases?
Safety Management Consulting
C
h
a
l
l
e
n
g
e
s
16
How do we address these challenges?
• Put safety leadership at the executive level
• Make safety a formal strategic priority, which ensures
it gets its own objectives, targets, etc.
• Create a common framework based on risk so that
safety can be compared to other business issues on
a relative basis (apples to apples)
Safety Management Consulting
S
t
r
a
t
e
g
y
17
Safety Management Consulting
18
Safety Management Consulting
• Organizations must consider many varieties of risk
• Financial and business risks are generally high on the
executive and Board agenda and well understood
• Safety is normally on the agenda, but not always at
the same level as other topics
– Buried or invisible (subcategory of other topics)
– Only escalated to high levels when there are very serious
issues, regulatory concerns, audits, etc.
– Not understood outside safety and operational functions
What can we do to fix this?
C
o
r
p
o
r
a
t
e
R
i
s
k
19
• Enterprise Risk Management (ERM) can be used to
translate safety into a language that is understood by
the exec/Board…so that they can compare risk topics
• What is ERM?
– A common framework to define, categorize and manage
risks…regardless what type of risk
– Provides a common risk language that can be understood
by the exec/Board…regardless what type of risk
– Creates a bridge between safety and business leaders
Safety Management Consulting
E
R
M
• What does ERM include?
– Risk taxonomy (structure describing risk areas)
– Methodology to assess, and classify risks
– A consistent way to report on the organizations risk profile
20
What does a risk hierarchy look like?
GeoPolitical
Safety Management Consulting
E
R
M
Financial
Business
Safety
Human
Resource
Security
Flight
Safety
Ground
Safety
21
ERM Components
• Risk definitions
• Risk assessment tools
• Risk tolerance policies
• Risk Reporting Templates
• Risk classifications
Severe
High
Moderate
Safety Management Consulting
E C
R o
M m
p
o
n
e
n
t
s
Low
22
• Safety can then take its place alongside other
priorities at the highest levels of the organization
HIGH
LOW
Financial
Safety
• Risk a
• Risk b
• Risk c
• Risk a
• Risk b
• Risk c
Moderate
SEVERE
Moderate
Human
Resource
Business
GeoPolitical
• Risk a
• Risk b
• Risk c
• Risk a
• Risk b
• Risk c
• Risk a
• Risk b
• Risk c
Safety Management Consulting
P
a
r
t
A
g
e
n
d
o a
f
23
Safety Management Consulting
24
Be Prepared
• Many (most?) executives and Boards are not familiar
with enterprise risk management – if they do not “buy
in”, there is no value in implementing ERM (educate)
• ERM systems will take expertise and work to design
for your organization (get help if you need it)
• With more profile at the executive and Board comes
more interest and more expectations!
• Be prepared for the truth – sometimes safety
priorities are not going to be the most important (and
that is OK)
Safety Management Consulting
C
a
u
t
i
o
n
s
25
• Safety management is in better shape than ever!
• However, there is still more to do for safety to be
– properly understood at executive/Board levels
– treated the same as other corporate priorities
• One way to help push safety up the organizational
hierarchy is to create a common risk management
system for all risks (including safety)
• Be prepared for the journey to the top!
Safety Management Consulting
C
o
n
c
l
u
s
i
o
n
s
26
Safety Management Consulting
Thank You
Questions?
[email protected]
http://ca.linkedin.com/in/daviddeveaupeng/
27