Risk-based thinking is a process we all take part in every day without actually thinking about it. Imagine going to cross the road, we automatically look left and right for any oncoming vehicles before crossing, effectively assessing the risk in stepping out into the road. Identifying the risk comes first, with a plan of action following. The newer revisions of ISO standards, particularly ISO 9001:2015 and ISO 14001:2015 incorporates this form of thinking across their entire standard. Risk is no longer an afterthought, but a consideration when planning.
The concept of risk has always been a part of ISO standards, but whereas previously it was part of the preventive action and a separate clause, it will now be a prominent aspect.
So what is risk-based thinking?
Consider the scenario above regarding crossing a road. The risk is considered first when we look left or right – is it safe or do we cross and risk being hit by a vehicle. We consider the available options, looking at the opportunity to cross at that point to where we want to be or move to a safer location such as a pedestrian crossing where safety is more guaranteed. Where a road does not have a pedestrian crossing we may even consider the benefit of there being one and the improvement to the safety of pedestrians. We then decide not to cross when we see a vehicle approaching, and avoid being hit and seriously hurt – taking preventive action to avoid the risk.
This is the type of thinking processes that ISO 9001:2015 and ISO 14001:2015 will require from leaders when strategically planning. Risk-based thinking is identifying the risk at the beginning, identifying opportunities and improvements to manage that risk, and creating an automatic preventive plan before an incident has occurred.
This approach to evaluating risk when establishing processes, controls, and improvements to a quality management system can further streamline an organization. By improving those steps that incur the identified risks, an organization can reduce the number of waste steps within their process, improve efficiency and reduce the overall organization waste – including waste products and waste time.
There are several available tools to assist in a risk-based thinking approach and to identify the risks that are not so clear. A popular risk assessment tool is a matrix or decision tree. These are used to identify what could happen if a selection of decisions where made – identifying risks at each step of the planning process. Risks can be legal implications of producing a particular product, a safety risk of using equipment at maximum capacity, the use of substandard materials, or setting an unskilled worker to fill the gap in a skilled work line – even temporarily. Incorporating this type of approach to planning makes risk-based thinking a natural part of the process, and not an additional activity completed separately.
Risk-based thinking is not necessarily a negative consideration, it can help identify areas for improvement, and opportunities, all while protecting against the worst. It is a process we all partake in every day, the trick is to now apply that to your planning processes at work and naturally reduce the risks before they happen.