Every decision is about risk management. Hiring a new employee can carry the risk that maybe you hired the wrong candidate. Implementing new software could create a risk of production delays if users are slow to use the new system.
Since risk management permeates everything, all of your employees are de facto risk managers. If they don’t approach their roles with a risk mindset, then they’re setting themselves up for failure.
The key question is: How can you improve risk management in your organization?
In this article, you will learn why the best risk management programs include the bowtie method and barrier management, or ‘barrier-based risk management’.
Applies to all industries
One of the advantages of barrier-based risk management is it can apply to practically any industry, whether it’s oil & gas, energy, healthcare, pharmaceuticals, aviation, manufacturing, mining, food & beverage, etc.
The concepts of the bowtie method and barrier management are universally present in any sector. Companies in all industries face risks of unwanted events based on threats, causes, or hazards, which can be visually displayed on a bowtie so that all your employees can understand them.
Used for multiple business processes
Many people instinctively think about workplace safety when they hear ‘risk management’. But risk management is much more than about safety. Risk management is about managing the effects of uncertainty on objectives.
There are many types of unwanted events that can threaten business and operational objectives, such as worker injuries or fatalities, environmental disasters, supply chain issues, IT problems, regulatory non-compliance, etc.
The bowtie method and barrier management can be used for different business processes, including health & safety, process safety, manufacturing, maintenance, procurement, operations, and even cybersecurity. This allows you to manage all kinds of risks through the same methodologies and tools, and to communicate around risk using the same ‘language’ throughout the enterprise.
Connects enterprise risks and operational risks
Most leading companies are good at identifying enterprise risks. They have robust enterprise risk management (ERM). But they fail to take the next crucial step, which consists of connecting ERM to operational risk management.
Bowties and barrier management provide a systematic approach to manage and mitigate operational risks because they cover all aspects of a risk assessment (hazards, top events, threats, consequences, barriers, and escalation factors). Also, management activities assure the performance of barriers. These activities are directly delivered by EHS systems, which therefore connect operational risks to enterprise risk management.
Moreover, with the Enablon Bowtie Suite, you can create a ‘parent’ or ‘corporate’ bowtie and have slight differences on local ‘children’ bowties derived from that global bowtie. This allows you to connect global bowties to local counterparts that take into account local situations. Click here for more information.
Modern methodology
Many risk assessment methodologies originated in the 1960s or 1970s. These include Fault Tree Analysis (FTA), HAZOP, Failure Mode and Effects Analysis (FMEA), and others.
By contrast, the bowtie method started to become widespread in the 1990s, following the 1988 Piper Alpha disaster. It’s more recent and therefore reflects more current risk assessment practices.
The bowtie method is well suited for large, complex organizations and offers flexibility to be customizable to specific industries and scenarios. This makes the bowtie method ideal for today’s business and operational realities.
Also, dynamic bowties give a visual overview of all elements of a risk assessment, making it easier to communicate about hazards and risks. In addition, barrier-based risk management allows you to visualize the Swiss cheese model, which can’t be done with an Excel-based risk register.
Want to learn more about how bowties and barrier management can improve risk management at your company? Visit our webpages on the bowtie method and the BowTieXP Enterprise solution, and reach out to us at [email protected] for any questions.
