Podcast 1.3 - Operational risks

For a long time, the very notion of operational risks only existed in manufacturing. Of course, failsafing a service is as important as failsafing a product.  For instance, a pilot error can be as fatal as a turbine defect during a flight. Disastrous failures had to happen for many service industry to open their eyes to these risks and realize that these could actually be managed. The Basel committee on banking supervision, for instance, defined operational risks as: the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

In this podcast, I will start with the anatomy of a service failure using a recent very public example. I will then present the highlights of a powerful technique in the operational risk management toolkit, before concluding.

Stuff happens, that’s life. But when it could easily have been prevented with a little planning, care, and attention to details, that’s a shame. As straightforward as the countermeasures may seem (say a travel checklist or a photo of all the stuff you need, spread out on a table) they will only take place if you believe in process improvement and have the discipline to follow through.

Keywords: Operational risk, defect, FMEA, severity, occurrence, detection, criticality, Poka Yoke.