[music playing]
Risk-- what does it mean?
If I tell you that driving a car with your eyes closed is risky,
you'll have a fairly clear sense of what I'm getting at.
It means that something bad might occur.
And there are two key things in that statement-- "something
bad" and "might occur."
In other words, there are potential consequences,
and there is some degree of likelihood associated
with those consequences.
And that is how we commonly define risk.
Risks apply to potentially hazardous events,
like driving a car with your eyes closed
or even driving with your eyes open.
We characterise risks in terms of their potential
consequences, as well as the likelihood or probability
of any particular consequences occurring.
A potential hazardous event which
has high consequences and high likelihood
is, by definition, a high risk.
Driving with your eyes closed would be characterised
as a high risk, since the consequences of an accident
would be very severe, and the likelihood
of having such an accident would be high.
A hazardous event with low consequences and low likelihood
is a low risk.
We could also think about risks with low consequences
and high likelihood, things that happen regularly but don't
do very much harm when they do.
Often the more challenging risks to manage
are those associated with hazardous events which
are of low likelihood, but potentially very high
consequences--
perhaps a 15-metre tsunami disabling a power supply
of a nuclear reactor.
We can talk about consequences in qualitative terms,
using words like "insignificant," "minor,"
"moderate," "major," and "catastrophic."
And we can also describe likelihood
using qualitative terms, such as "rare," "unlikely,"
"possible," "likely," and "almost certain."
That's enough to enable us to establish a risk
matrix like this one.
Doing so enables us to incorporate
qualitative descriptors of the level of risk associated
with various combinations of likelihood and consequences.
Risk ratings such as low, moderate, high, and very high
can be applied.
The rules aren't set in stone here.
And risk matrices are developed and modified
to suit particular types and groups of hazardous events
being assessed.
Here's a scenario for you to think about.
You've just been offered a job interview
for the job of your dreams at a major construction firm
based in North Sydney.
It's scheduled at 9:00 AM tomorrow morning.
Think about your plan to get there
and to prepare for the interview.
What could go wrong which might cause you
to arrive late or unprepared?
I want you to write down three hazardous events that
could occur.
For each of these, provide a qualitative descriptor
of both the likelihood and the consequences.
Jot down a few notes to explain why you chose
the descriptors that you did.
Then use a risk matrix like the one shown in this video
to rate each risk.
There are no right or wrong answers in this task.
It's simply a matter of working through the steps
to compare the risks in a systematic and logical way.
As usual, I'll ask for a few examples
to be presented at the start of the class.
[music playing]