Risk Management Assignment 4

Risk Workshop and Risk Register

DR. Steven

Name: Sheku Konneh

Institution: Strayer University

May 22, 2019

Risk Workshop and Risk Register

The Required Pre-workshop Activities

When it comes to the pre-workshop activities, it is imperative that one gets a list of all the stakeholders who will be attending the workshop. This is important as it will make the team leader ensure that the stakeholders have been communicated to in time and asked to avail themselves and if not so send representatives. In the case of BP, there are stakeholders who will be expected, such as; management team, senior technical staff, senior plant operators, site surveyors, line managers, quality assurance teams, and sponsors among other teams. It was earlier noted that risk management should be a collective undertaking explaining why the workshop will involve a collective team.

After getting the list, it will be sent to all the stakeholders in order to make them understand where they fit when it comes to the overall big picture. This will be accompanied by an outline of the agendas that will be tackled in the two-day workshop. By informing them about the agendas, they will be psychologically prepared for the various activities that will be undertaken during the workshop. Further, they will be informed about the goals and objectives of the workshop in relation to the heightened risk at BP. This will also contribute to making them gain an in-depth understanding of the overall aims of the workshop practice. Finally, all the identified stakeholders will be informed that in the event that they will not be available for the practice, they should send representatives who will transfer the knowledge and skills to the various establishments at BP.

A Workshop Agenda based on figure B-8

Day One Agendas

1. Introductions and greetings- 9-10 am

2. Outline and confirm the project’s objectives- 10-11 am

3. Break- 11-11:30 am

4. Risk Management and Planning briefing- 11:30- 1:00 pm

5. Outline expected results and outcomes -1:00-1:30 pm

6. Identify the specific major risks-1:30-3:00 pm

7. Describe and Record the identified risks: 3:00-5:00 pm

Day Two agendas

1. Assess the probability and impacts of the risk- 9:00-10:00 pm

2. Categorize the risk based on the impact- 10:00- 10:30 pm

3. Nominate the owners of the risks- 10:30 -12: 00 pm

4. Break-12:00-12:30 pm

5. Develop ways of identifying and addressing the risks- 12:30-3:00 pm

6. Describe and detail the initial responses to the risks- 3:00-4:00 pm

7. Learn and develop ways of collective performance- 4:00-5:00 pm

8. Close the workshop- 5:00-5:15 pm

When one closely looks at the identified the agendas, it can be seen the first day will be about making sure that every party has familiarized with the risks and have also learnt about how the risks impacts the performance of the organization. For instance, an agenda, such as risk management and briefing agenda will be an interactive process where the leader and the stockholder will be involved in a manner that makes them share any relevant information relating to the risks seen or experienced at the BP. After identifying them, the team will collectively be oriented to the risk management and planning practices that could help identify and address them in a timely manner.

When it comes to day two, it can be seen that the real work will be undertaken where teams will be made to own risks in their various establishments. The teams will also be made to learn about the various ways of collectively identifying and addressing the risks. Moreover, the teams will learn about the various ways of responding to the risks as well as reporting while utilizing official mediums and forums. Any questions here will be listened to and responded with the aim of ensuring that all parties have gained uniform information and skills.

As for the allocation of time, it is deemed best practice if every agenda is considered important. It will not be healthy for the participants if the leader focuses on a single item for a longer time (Kerzner, 2013). Distributing time uniformly is an effective way of addressing boredom which may impact the overall outcomes of the workshop. On the other hand, it is deemed a good practice if the stakeholders can be offered a break for refreshing and reflecting on what has been learnt. Additionally, breaks are good for making the stakeholders bond, and develop a collective sense of responsibility.

The Top Five Threats in a Risk Register

Description	Cause	Risk	Effect
1. Poor collective performance	There is no a culture of team performance when it comes to identification and resolving risks	Failure of the systems is not detected early enough	Damage to property and human resources
2. Allocation of resources	The company focuses more on growth and less on servicing and maintenance	Tools and equipment likely to fail and cause loss or damage	Production will halt in case of machine or equipment failure
3. Site evaluation and assessment	The company does not have a team that intensively assess the sites	Possible for the company to set a plant or a drill on a high risk ground	Loss of funds and resources will accrue after a site has been closed.
4. Management and planning	There is no a risk management team that is mandated with assessing and reporting on risk	Risks go undetected for a longer time	The harm caused is greater and production may be halted.
5. Risk reporting	The management has no a robust medium for reporting identified risks	Responding to risk identified take unusually longer	Also, the harm caused tend to be greater.

Poor Collective performance- At BP, it is clear that there is no a collective culture for identifying and responding to risks. It was earlier noted that risk management and planning is a collective undertaking as risks come from nearly all establishments especially when performance is driven by machines (Rausand, 2011). For instance, plan operators and quality assurance should work together in evaluating and assessing the risks.

Allocation of resources- At BP, it is clear that the company stopped focusing on service and maintenance to focus on growth and expansion. Cutting down costs that go to maintenance had a negative impact on risk management. Despite the strategic needs, the company should still invest in service and maintenance as failure to do so leads to much bigger risks which are much costly as was realized when the accident happened.

Site evaluation and assessment- When drilling for oil, it is recommended that site assessment is carried out before the equipment can be moved to the site. At BP, it is clear that the company does not have a team for doing so explaining why the company set the drill at a site that had excess amount of gases which impacted performance. Going forward, it is imperative that site assessment and evaluation is carried out to minimize risks.

Management and planning- The case study has indicated that the company does not have a goal-oriented team when it comes to risk management and planning. There should be a team whose only responsibility is to assess and report on any identified risks in a timely manner (Rausand, 2011). When there is such a team, risks are normally identified earlier before much harm can be caused. Also, the team works with other teams hence creating a wider pool of resources.

Risk reporting-It is a behavior at BP that has seen failure of parties reporting any risks that are identified during performance. For instance, before the accident happened, there were leaks that had not been communicated to all parties. This limits information sharing which is key to management of risk. There ought to be a mechanism for reporting where every piece of information relating to risks is shared among all the stakeholders.

Justification of Assignment of Probability and Impacts

The above factors have looked into the current problems that are being experienced at BP. Risk management and planning at the organization has failed because of three major factors which are: insufficient allocation of resources, poor site assessment, and operational failure. With regard to allocation of resources, it was earlier noted that the company cut down costs for service and maintenance so as to focus on growth and expansion. Drilling of oil requires a company to invest optimally in machine and equipment maintenance where failure leads to increment of risks. BP disregarded this and failed to put in place effective measures for ensuring that all the machines and equipment are working efficiently.

Due to lack of a goal-oriented risk management team, the company failed at assessing sites it moved the equipment to. The accident that occurred could have been avoided if the company had carried out a proper assessment. It could have learnt that the area had excessive natural gases which could have been detrimental to operations. In this regard, the company’s operations were open to greater risk in the event that the site was not feasible. Going forward, it is important that the company fully assesses a site before it can move the equipment.

Further, operational failure can be seen as a major reason why the company experienced higher risks. For instance, there was no a culture of collective risk assessment and management. The upper management had not instilled a culture that focuses on making sure that every worker is part of the risk management team. When operating machines and equipment, there are numerous establishments where each has its own risks. The workers in those establishments understand the performance and functions in a much better way hence they should be involved in assessing the risks (Morecroft, 2015). In this light, BP should have put in place an operational strategy that could have helped address all the problems. The above three aspects justify the risks identified. If addressed, the company will be at a better standing when it comes to resolution of risks.

Top Three Opportunities in the Risk Register

Number	Cause	Risk	Effect
1.	Establish a risk management team	Many risks will be identified	It may be detrimental to performance
2.	Allocate more resources to service and maintenance	Other business operations may be impacted	Slow growth and expansion
3.	Establish a site assessment team	Difficult to find sites that meet all the desired aspects	Will slow operations and activities

Establishing a risk management team- It is an opportunity that is mainly about mandating a team with the responsibility of meeting goals and objectives that relate to risks. Currently, BP does not have such a team hence no workers feel responsible for reporting and also putting in place measures for addressing the issues associated with risks. However, there is a risk associated with the creation of the team. It will identify more risks making the company hesitant which may slow performance.

Allocating enough resources- This is about investing in servicing and maintenance of the equipment and machines. This will have a direct impact on the performance of the drilling machines and equipment. However, it is worth noting that there is a risk associated with his opportunity. As noted in the case study, BP is facing financial performance difficulties hence its operations in other areas such as growth and expansion will be impacted.

Establishing a site assessment team- BP must avoid any other conceivable failures that might result from the infeasibility of a site. To do this, it must hire a team that assesses all sites before drilling equipment can be moved there. It is an opportunity that will provide risks as the operations may be delayed which cumulatively will have an impact on the overall performance of the company.

Justification of Assignment of the Probability and the Impacts

The case study has indicated that BP is facing major challenges due to the fact that it has not put in place resources and operational strategies applicable in addressing the risks. In this regard, it can be said that the opportunities for the organization lie in putting in place operational strategies and allocating resources effectively. The company has adopted new strategies that cut down costs in functions and operations that are not seen as more important. It is a misguided view as it only exposes the organization to greater risks. In response, the management needs to strike a balance between sustainable growth and optimal performance. This needs to be supported by implementation of strategies that will create a collective sense of responsibility. Each worker and each team should feel responsible for the healthy well-being of operations. On the other hand, it is deemed best practice if site assessment can be assigned a specific team. The accident that has been noted in the case study came as a result of failed site assessment. This can be avoided if a team for such responsibilities can be put in place and be given the required resources.

In conclusion, BP as one of the world’s largest oil producers should adopt best practices so as to reduce the risks and their impact. After the accident had happened, the company’s public image was damaged leading to outcomes such as declining value of shares. Though it needs to grow and diversify, it must strike a balance between promoting best performance practices and realizing sustainable growth. In so doing, the company will address the risks that have been detrimental to performance. Further, it will improve its public image and regain its position as a world leader when it comes oil drilling and exploration.

References

Kerzner, H. (2013). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. New York, NY: Wiley & Sons.

Morecroft, J. (2015). Strategic modeling and business dynamics: a feedback systems approach. . New York, NY: John Wiley & Sons.

Rausand, M. (2011). Risk Assessment: Theory, Methods, and Applications. New York, NY: Wiley.