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Using "Marginal Gains" to Improve Risk

British Cycling's world dominating performance at the Rio Olympics brought the concept of "Marginal Gain" to life in spectacular fashion and this was a performance that has been building since 2008. So as a new year begins and we look at objectives for the year ahead, could the same "Marginal Gains" strategy be used to improve Risk?

Marginal gains is the process of seeking the 1% improvements that over time aggregate to significant and sustainable performance advantage as illustrated below, (inspired by Slight Edge by Jeff Olson). Whilst initially improvements are not discernible, over time the effect of these compounds. There will be a number of key elements to this, commitment, desire, belief, funding, ability, availability of resources, but a critical element of this will be the availability and analysis of performance data.

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In a business context this approach sits at the heart of the Kaizen methodology of Continual Improvement driving improved efficiency and performance in process and ultimately financial return to the business.

So would the same apply in a Risk Management environment? Let’s use the example of Health and Safety because this is an area of “Cost” to the Business for which many Business Owners/Boards feel there is no opportunity for Return, let alone Performance gains. This is illustrated by the Cost of Risk Diagram below.

Cost of Risk

But when it comes to Safety, perhaps there is not the same motivation in terms of excellence and winning that you get in Sport, and that other drivers such as compliance, protection, defensibility and governance will be play a bigger part. There is certainly "funding" (perhaps seen as a Cost) but where is the Performance return.

So drawing from the sporting comparison, what would a Marginal Gains Safety Environment look like?

An absolute critical component will unquestionably be Performance Data. You cannot sustainably improve your performance without it, so where would this come from?

Performance Data can be an instant bi-product of the H&S Management System, particularly if this is an IT platform, but where would it come from? Here’s some examples

  • Pro-active monitoring of Risk Assessments - regularly structured pro-active monitoring and quantifiable reporting on the operation of Risk Assessment Control Measures – the things that actually deliver a safe environment. Why shouldn’t a business owner be able to quantify H&S performance alongside any other business metric
  • Training – particularly e learning – this is producing competency metric and if you’re e learning also captures risk exposures in the individuals working environment then you are also getting discrete risk sampling
  • Safety Sampling – again any checklist will produce a performance score and is identifying failings or otherwise is underlying systems
  • Maintenance Checks – again capable of providing a performance score

All of the above will drive better performance if the data is subject to management analysis and as well as providing data and performance, they will by their operation, be driving behaviour (see how quickly someone becomes focused on their daily activity simply by wearing a “Fitbit” or similar device).

So what else would deliver marginal gains?

  • Improved accident investigation and reporting – drives learning from “failure”
  • Improved control and management of PPE – both in terms of issue, maintenance and inventory control
  • Toolbox talks – builds understanding and awareness
  • Safety Briefings – creates team awareness
  • Improved housekeeping – environmental factors have a significant impact on performance, whether sporting or social (New York – Broken Windows)
  • Business Unit performance KPI’s – motivating and recognising performance and aligning management with business objectives

All of the above can be layered in over time with a implementation plan to build incrementally on the other improvements, thus driving the Marginal Gains performance improvement.

So what other wider Performance Improvements could be realised than just the Safety Environment? Talk to Businesses who have already achieved this and realised these gains and they will also list many of the following come?

  • Improved Operational Performance
  • Improved Employee Engagement
  • Reduced Risk Transfer Costs
  • Reduced Costs of managing Risk
  • Strengthened Existing Commercial Relationships
  • Competitive Advantage in New Contracts/Tenders
  • Stronger Due Diligence performance– for Business Sale or funding

If you'd like to explore "Marginal Gains" in your RM Process and how that might be achieved, feel free to get in touch.

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