Could iso 31000 Risk Management Guidelines have saved the Titanic

1© Copyright 2014 - E3 Extreme Enterprise Efficiency® LLC – Patent Pending

by David Patrishkoff

www.CascadeEffects.com

Could ISO 31000 Risk Management Guidelines have Saved the Titanic?

The Tit


• Choose you objectives wisely

• The Titanic builder’s objectives were

to create a luxury liner at the lowest

costs, in the least amount of time,

and maybe even break the speed

record for an Atlantic crossing

• These were admirable goals but they

ultimately led to tragedy. The Titanic

followed ISO 31000, Section 5.5.1.b.,

by "taking or increasing the risk in

order to pursue an opportunity"

• They did so because they believed

their risks were not extraordinary and

could be controlled

• This is a common judgment error that

can end with unintended and

cascading consequences

ISO 31000 RISK MANAGEMENT GUIDELINES AND

THE TITANIC

The pursuit of blissful

objectives can end with

unintended negative

cascading consequences


• ISO 31000 (Risk Management) and

its supporting publications

encompass an impressive and useful

"to-do" list of risk management

guidelines to create and protect the

value of an organization.

• However, if an organization

selectively pursues some of the ISO

guidelines and ignore others, highly

undesirable events and tragedies

can occur.

• This is what happened with the

Titanic.

• ISO 31000, section 4.2, suggests we

align risk management efforts to our

objectives.

• White Star Lines, the Titanic

builders, fulfilled this requirement.

COULD ISO 31000 RISK MANAGEMENT

GUIDELINES HAVE SAVED THE TITANIC?

ISO 31000

Titanic Builders


The individual risk opportunities that Titanic pursued were not terribly

unusual, but collectively, they created an unforgiving perfect storm fueled by

three main linked cascading risks:

• Ship design shortcomings influenced by cost cutting efforts

• Rivet material quality flaws

• Vessel operation and evacuation mistakes.

THE PURSUIT OF OPPORTUNITIES SANK THE

TITANIC, NOT AN ICEBERG


ISO 31000 WARNS OF CASCADING AND

CUMULATIVE EFFECTS

• ISO 31000, Section 5.4.2, warns

us that "Risk identification

should include examination of

the knock-on effects of particular

consequences, including

cascade and cumulative

effects".

• Although, ISO lists thirty-one

potential risk assessment tools

to support risk assessment

efforts, their warning about

cascading cumulative risks is

stronger than their suggestions

of how to address these specific

challenges.


THE WORLD ECONOMIC FORUM WARNS OF

CASCADING RISKS

• The World Economic Forum,

in its 2014 Annual Global Risk

Report highlights cascading

and interconnected risks many

times as a serious threat.

• They also stated the need for

better efforts to deal with such

threats by supplementing

traditional risk management

tools with new concepts,

methods and tools.


WHAT ARE CASCADING RISKS?

• Cascades can be either

beneficial, neutral or destructive.

• We define Cascading Risks as a

series of interacting risks that

emanate from Leadership (Aces)

through the work culture (Kings)

and work processes (Queens)

that create bad performances

(Jacks) and negative feedback

loops (Jokers) back to

leadership.

• Leaders then either apply

learning's in creative ways or

ignore the cascade signals,

which can lead to failure and

disasters.

• Detailed Cascading Risk Analysis

can aid in minimizing such risks.


CASCADE #1 THAT THREATENED THE TITANIC -

INADAQAUTE DESIGN

• Titanic’s design was not unsinkable as was

widely publicized at the time.

• It had many so-called “watertight

compartments” but they were open at the

top, like an ice cube tray.

• It had far too few lifeboats, a result of cost

cutting efforts during the design phase. It

had a double bottom but it did not extend

up to the waterline, which would have

provided protection against a side-swiping

iceberg.

• This was a design flaw that was quickly

corrected on Titanic's sister-ship, Britannic,

which was still under construction at the

time of Titanic's sinking.



INADAQAUTE DESIGN – cont’d

• Titanic's builders claimed that it

was constructed considerably in

excess of the Lloyds registry

safety requirements.

• Therefore they never saw the

need to seek Lloyd’s registry

approval.

• However, Lloyds disputed that

claim publically after Titanic

sank and made a statement that

the Titanic did not meet their

safety requirements.



BAD QUALITY RIVETS

• Titanic required 3 million rivets to hold her together.

Archives tell us at that time there was a shortage of

riveters and the necessary materials to create high

quality wrought iron rivets.

• White Star’s competitors converted to 100% steel

rivets, which were much stronger than wrought iron

rivets.

• Titanic used steel rivets in the straight hull section

but not in the front hull sections, the area impacted

by the iceberg.

• Wrought iron rivets were easier to rivet by hand than

steel rivets in those sections.

• Recovery of Titanic's wreck from the sea floor

confirmed the low quality and brittleness of the rivets

in the impact areas.

• Higher quality rivets would have kept Titanic afloat

longer which would have saved more passengers.


THE FINAL CASCADE #3 THAT SANK THE TITANIC –

VESSEL OPERATION AND EVACUATION ERRORS

• Titanic was cruising near top speed, which was

very risky on a moonless night with no waves

through an area with active iceberg warnings.

• Just hours before the disaster, a Lifeboat drill was

cancelled by the Captain for no apparent reason.

• It was suspected that they were attempting to

break a cross-Atlantic speed record. That

recklessness and the collision with an iceberg

sealed Titanic’s fate.

• Her brittle rivets in the impact area popped off

and allowed water to rush in the hull at a very

high rate.

• The Titanic sank in less than 3 hours.

• 1,502 people perished after a disorganized

evacuation event filled the far too few lifeboats to

just 61% of their total capacity.


CONCLUSION

• Although, ISO 31000 attempts to protect us from ourselves

and the outside world, we cannot be selective in what we

implement.

• We need to follow all of the guidelines and even test areas

that we believe are safe. We must also heed ISO's challenge

to examine cascading and cumulative effects.

• Effective Risk Based Thinking must include Cascade Effect

Thinking.

• Over the last 11 years I have developed patent pending

Cascading Risk Management (CRM) techniques and tools that

can further contribute to this effort of identifying and mitigating

cascading and cumulative effect risks. Read more about Risk

Cascades at: www.CascadeEffects.com

http://www.cascadeeffects.com/


AUTHOR BIOGRAPHY

• David Patrishkoff is President of E3 - Extreme Enterprise Efficiency® and

the Founder of The Institute for Cascade Effect Research®.

• He is a Lean Six Sigma Master Black Belt and the inventor of a Cascading

Risk Management Methodology (CRM), which has Patent Pending status.

• CRM can enable an organization to successfully achieve ISO 31000 Risk

Management compliance.

• CRM has many practical, analytical and gamified techniques that solicit

rigorous stakeholder inputs to help an organization build a common vision,

strategy and action plan for successful Enterprise Risk Management

implementations.

• David has helped clients from 60+ different industries, worldwide, to solve

their most serious strategic, profitability and risk issues that their own

experts could not solve.

• Prior to starting his consultancy in 2001, David held various worldwide

senior executive positions in the automotive and trucking industry.

• Author’s Websites: www.eeefficiency.com and www.CascadeEffects.com

• Author email: [email protected]

http://www.eeefficiency.com/

http://www.cascadeeffects.com/

mailto:[email protected]

Business

Could iso 31000 Risk Management Guidelines have saved the Titanic