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Chapter 19 Risk management 583
‘Subjective’ estimates
Failure assessment, even for subjective risks, is increasingly a formal exercise that is carried
out using standard frameworks, often prompted by health and safety, environmental, or
other regulatory reasons. These frameworks are similar to the formal quality inspection
methods associated with quality standards like ISO 9000 that often implicitly assume unbiased
objectivity. However, individual attitudes to risk are complex and subject to a wide variety
of influences. In fact many studies have demonstrated that people are generally very poor
at making risk-related judgements. Consider the success of state and national lotteries. The
chances of winning, in nearly every case, are so low as to make the financial value of the
investment entirely negative. If a player has to drive their car in order to purchase a ticket,
they may be more likely to be killed or seriously injured than they are to win the top prize.
But, although people do not always make rational decisions concerning the chances of failure,
this does not mean abandoning the attempt. But it does mean that one must understand the
limits to overly rational approaches to failure estimation, for example, how people tend to
pay too much attention to dramatic low-probability events and overlook routine events.
Even when ‘objective’ evaluations of risks are used, they may still cause negative consequences.
For example, when the oil giant Royal-Dutch Shell took the decision to employ
deep-water disposal in the North Sea for their Brent Spar oil platform, they felt that they
were making a rational operational decision based upon the best available scientific evidence
concerning environmental risk. Unfortunately Greenpeace disagreed and put forward an
alternative ‘objective analysis’ showing significant risk from deep-water disposal. Eventually
Greenpeace admitted their evidence was flawed but by that time Shell had lost the public
relations battle and had altered their plans.
Critical commentary
The idea that failure can be detected through in-process inspection is increasingly seen
as only partially true. Although inspecting for failures is an obvious first step in detecting
them, it is not even close to being 100 per cent reliable. Accumulated evidence from
research and practical examples consistently indicates that people, even when assisted
by technology, are not good at detecting failure and errors. This applies even when special
attention is being given to inspection. For example, airport security was significantly
strengthened after 11 September 2001, yet one in ten lethal weapons that were entered
into airports’ security systems (in order to test them) were not detected. 8 ‘There is no such
thing as one hundred per cent security, we are all human beings’, says Ian Hutcheson, the
Director of Security at Airport Operator BAA. No one is advocating abandoning inspection
as a failure detection mechanism. Rather it is seen as one of a range of methods of
preventing failure.
Failure mode and effect analysis
One of the best-known approaches to assessing the relative significance of failure is failure
mode and effect analysis (FMEA). Its objective is to identify the factors that are critical to
various types of failure as a means of identifying failures before they happen. It does this by
providing a ‘checklist’ procedure built around three key questions for each possible cause of
failure:
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What is the likelihood that failure will occur?
What would the consequence of the failure be?
How likely is such a failure to be detected before it affects the customer?