A clear look at how Operational Risk Management identifies hazards and assesses risks.

What process is used to systematically identify hazards and assess associated risks?

• A. Risk Analysis Framework
• B. Operational Risk Management (ORM)
• C. Safety Assessment Method
• D. Hazard Identification Procedure

Answer: (B)

The process that systematically identifies hazards and assesses associated risks is known as Operational Risk Management (ORM). ORM is a comprehensive and ongoing process used by organizations to help identify potential risks in activities and operations, analyze the likelihood and consequences of those risks, and implement measures to mitigate or manage those risks effectively. ORM encompasses a range of systematic practices, including risk assessment techniques that help prioritize risks, allowing organizations to allocate resources efficiently and implement controls to reduce the likelihood of negative outcomes. This holistic approach ensures that risk management is integrated into all aspects of decision-making and operations, fostering a culture of safety and continuous improvement. Other processes or terms may relate to specific aspects of risk identification or assessment but do not encapsulate the broader, systematic approach to risk management that ORM does. For instance, while a Risk Analysis Framework might provide guidelines on conducting risk analysis, it lacks the comprehensive, integrated methodology that ORM encompasses. Similarly, Safety Assessment Method and Hazard Identification Procedure are specific tools or steps within the broader ORM context but do not represent the overarching process itself.

Operational Risk Management (ORM) isn’t some mysterious framework tucked away in a policy binder. It’s a practical, everyday approach organizations use to spot hazards, weigh what could go wrong, and put controls in place before trouble hits. If you’ve ever wondered how teams decide what to fix first—and how they keep watching for new risks as things change—ORM is the backbone that makes that possible. So let’s unpack what this process looks like in real life and why it matters beyond any single project or department.

What ORM really is, in plain terms

Think of ORM as a continuous loop that threads risk thinking into decisions at every level. It’s not just about a single risk assessment or a checklist; it’s about a culture and a method that keeps risk front and center as plans evolve. The goal is simple on the surface, but powerful in practice: identify hazards, understand the likelihood and consequence of each risk, and apply controls to reduce the chance of bad outcomes or soften their impact.

Now, a quick reality check: there are other terms you’ll hear that touch risk, but they aren’t the same thing as ORM. A Risk Analysis Framework might offer guidelines for how to analyze risks. A Safety Assessment Method could be a specific tool used at a given stage. A Hazard Identification Procedure is a step within risk work. ORM, by contrast, is overarching and integrated—an ongoing practice that stitches risk thinking into strategy, operations, and decision-making across the organization. It’s the umbrella, not just a single fabric.

The seven-step rhythm that keeps risk in plain sight

In many organizations, ORM follows a familiar cadence. You’ll hear about stages, but the magic comes from how they connect and repeat. Here’s a practical version you can picture.

1. Identify hazards

This is the “scan the horizon” moment. It’s not only about obvious dangers but about less-visible things—complacency in procedures, gaps in training, equipment quirks, or process quirks that could bite later. You gather input from workers on the floor, engineers in the lab, and operators in the control room. The aim is breadth, not perfection in one go.

2. Assess risks

Once hazards are on the table, teams estimate two things: how likely the hazard is to cause harm, and how severe the harm could be. That’s where risk matrices or similar tools come into play. Think of it like plotting a few key scenarios on a map and asking, “If this happens, how bad could it be, and how often might we see it?”

3. Prioritize risks

Not all risks deserve the same level of attention. Some will be glaring and likely, others quiet but potentially catastrophic. ORM helps you rank these so you can decide where to invest time and resources first. It’s a practical triage that avoids chasing every shiny risk and misses the real holes.

4. Decide on controls

Controls are the levers you pull to reduce risk. They can be design changes, process tweaks, additional training, changes to maintenance schedules, or enhanced monitoring. The aim is to choose measures that are effective, feasible, and sustainable.

5. Implement controls

This is where the plan meets the shop floor. It’s not enough to jot down a new rule; you need systems that support the change. That could mean updating procedures, wiring in a new safety interlock, or adding alerting in the software that flags a deviation.

6. Monitor and review

Risk isn’t static. The business environment shifts, crews rotate, and equipment ages. ORM calls for ongoing watching—checking whether controls do what they’re supposed to do and whether new risks emerge. That means data, feedback loops, and a willingness to adjust course.

7. Learn and improve

Every cycle feeds the next. You capture what worked, what didn’t, and why, then apply those lessons to the next round of hazard hunting. It’s a feedback loop that gradually sharpens your risk sense.

A toolbox of techniques that fit into ORM

You don’t need a giant toolkit to practice ORM well, but a few reliable techniques help.

• Risk matrix: a simple two-axis chart (probability vs. impact) to visualize which risks deserve attention.

• Scenario thinking: small conversations about “what if” to stress-test how plans hold up under pressure.

• Root-cause analysis: when an incident appears, tracing it back to the underlying reasons rather than just the surface symptoms.

• Bow-tie analysis: mapping pathways from hazards to outcomes, with controls on each side to prevent or mitigate harm.

• Checklists and audits: practical aids that keep people honest about what’s in place and what’s missing.

These tools aren’t end goals; they’re signals that ORM is working. The real win is a shared habit: people think about risk as a normal part of daily work, not a separate afterthought.

ORM in practice vs. other risk terms

Let’s be clear about how ORM sits alongside other risk concepts.

• It’s holistic. ORM stitches hazard thinking into planning, execution, and review across the organization. It’s not a one-off safety exercise; it’s a living framework.

• It’s ongoing. Risks evolve with technology, market conditions, and personnel. ORM is designed to adapt and re-prioritize as conditions change.

• It’s people-centered. Success rests on frontline insights, teams owning controls, and leaders sustaining a risk-aware culture.

• It’s pragmatic. You’re balancing the ideal with the real—what would be great to have versus what you can reasonably implement today.

Compare that with a stand-alone Risk Analysis Framework, for example: a framework might tell you how to analyze risks, but ORM tells you how to act on those analyses and keep acting as things shift. A Safety Assessment Method might be a strong tool within ORM, but ORM covers more ground—the entire approach to risk from identification to learning. A Hazard Identification Procedure is essential, yet it’s a piece of the broader ORM picture, not the whole story.

A real-world lens: cultures, decisions, and everyday choices

Picture a manufacturing site or a digital service platform. In both, ORM makes a difference by making risk talk normal. It’s that casual check-in where a supervisor asks, “What could go wrong with this change?” rather than waiting for a problem to blow up. It’s the practice of documenting near misses and using them as learning fuel, not as events to punish.

A well-running ORM habit also helps with resource allocation. If you know which risks sit in the red zone, you can focus maintenance crews, safety reps, and supervisors where they’ll do the most good. It’s not about policing people; it’s about giving teams the information they need to make smarter calls, faster.

A few quick analogies to keep it relatable

• It’s like planning a road trip with backups. You map hazards (construction zones, weather), weigh the likelihood of delays, and pick routes that keep you moving even if one shortcut isn’t available.

• It’s like cooking with a pantry audit. You note the ingredients you have, estimate how a missing item might alter the dish, and decide whether to substitute or adjust the recipe. The result is safer, more predictable meals—and fewer last-minute scrambles.

Common myths, busted with a practical twist

• ORM is just about compliance. Not true. ORM is a decision-support approach that helps leaders and teams prevent issues, not just tick boxes.

• ORM slows everything down. In reality, ORM saves time by reducing surprises and rework. It’s a way to build confidence in decisions.

• ORM is only for big companies. Risk shows up in every size and sector; a simple ORM rhythm can start with a small cross-functional team and scale as you learn.

Getting started without losing momentum

If you’re curious how to begin weaving ORM into your day-to-day work, a few practical steps can create momentum without overwhelming people.

• Start with a small cross-functional crew. Bring together people who actually do the work, plus a safety-minded sponsor.

• Pick a manageable scope. Choose a project or process with clear hazards and measurable outcomes.

• Map hazards and quick wins. Use a simple risk matrix to identify top risks and a couple of controls you can implement in weeks, not months.

• Build a lightweight monitoring plan. Decide what indicators will tell you if controls are doing their job and who will review them.

• Schedule short, regular touchpoints. A 15-minute weekly check-in can keep the momentum alive and prevent drift.

The takeaway: ORM is a practical, enduring approach to risk

Operational Risk Management isn’t a flashy moment in time; it’s a steady practice that helps organizations see hazards clearly, weigh their impact, and act with confidence. It blends thoughtful analysis with concrete actions, underpinned by a culture that treats safety and resilience as ongoing responsibilities shared across teams.

If you’re stepping into environments where risk lives in the details—where decisions ripple through operations, maintenance, and customer outcomes—ORM offers a clear map. It invites you to think ahead, talk openly about what could go wrong, and commit to fixes that keep systems stable and people safe.

So next time someone mentions a risk, you’ll know there’s a well-worn path for handling it. ORM is that path: practical, repeatable, and built to adapt as conditions change. And that makes a real difference, not just in theory but in everyday performance and peace of mind.