1. International Civil Aviation Organization European and North Atlantic Office CHALLENGES AND BENEFITS IN SAFETY MANAGEMENT Baku, Azerbaijan, 5-7 April 2006 George Firican and Victor Kourenkov ICAO Regional Officers European and North Atlantic Office

2. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 2 Overview  Safety Culture – a definition (again ?!)  Safety Culture – Series ONE of five challenges!  Reporting Culture – Series TWO of five challenges!  Implementation – Series THREE of five challenges!  Global and Local Components – other Series of five challenges!  Safety vs. Benefits – Why bother?  Conclusion

3. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 3 Safety Culture – a definition  What defines a safety culture?  Safety culture = the product of organizational traits  Safety culture = a product of actions and policies  Safety culture = generated by the beliefs and values of the organization.

4. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 4 Safety Culture – Series ONE of Five Challenges! 1.Wary - "We believe in Murphy's Law“ 2.Informed - “Management is aware how things work – how they really work“ 3.Just - "We don't shoot the messenger” (except for the messengers who really, really deserve it!) 4.Learning - "What we learned from the past will help us keep learning in the future“ 5.Flexible - "Everyone is empowered to steer the ship away from an iceberg“

5. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 5 Key Feature One - Wary 1. "We believe in Murphy's Law“  The organization recognizes that people and equipment can and will fail, and plans accordingly.  Management and workers also are mindful of when and where errors might occur and prepare contingencies for those possible failures.

6. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 6 Key Feature Two - Informed 2. “Management is aware how things work – how they really work“  Accurate information about performance, errors, and dangers is sought out, encouraged and analyzed.  Information flows both up and down the organization.  The organization knows where the “edge” is without going over it.  The information gives the organization a memory

7. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 7 Key Feature Three - Just 3. "We don't shoot the messenger. (Except for the messengers who really, really deserve it.)“  The organization makes a distinction between blame- free and culpable acts.  Some errors are just the fault of one person (in those cases discipline is warranted), but  Those cases are far outnumbered by situations where the system is truly at fault. “Trust is developed by being just and informed, when even bad news can be told and accepted as information to be acted upon rather than as a reason to punish.”

8. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 8 Key Features Four - Learning 4. "What we learned from the past will help us keep learning in the future“  The organization makes continuous systemic improvements, both in response to errors and to regular monitoring of the system.  Ideally, the organization also challenges its own assumptions.  It tolerates short-term difficulties and differing opinions about hazards.

9. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 9 Key Feature Five - Flexible 5. "Everyone is empowered to steer the ship away from an iceberg“  The organization has a hierarchy (works well under routine operation!) but  In times of crises, skill becomes more important than status!

10. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 10 Just/Reporting Culture  Just culture and the reporting culture = the bedrock of the safety culture.  Employees must not be afraid to report errors, and their reports must be:  encouraged and  quickly chanelled,  analyzed, and  acted upon.

11. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 11 Just/Reporting Culture (cont’d)  A just culture is a matter of management and organizational values;  A reporting culture has a significant technological and process component.

12. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 12 Reporting Culture – Series TWO of Five Challenges!  Reporting requires to effectively to: 1.gather the information, 2.transmit that information to the proper managers, 3.disseminate that information throughout the hierarchy, 4.store the information in a flexible database, and 5.analyze it from different perspectives to find underlying patterns and hazards. In aviation elaborate but efficient reporting systems are critical to the safety culture!

13. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 13 Implementation – Series THREE of Five Challenges! 1.Competing priorities for scarce resources; lack of resources: inadequate staffing and work overloads; 2.Resistance to change (the assumption that providers are already providing safe services); 3.Culture of blame (current safety culture is punitive in nature); 4.Lack of senior leadership understanding and involvement with safety issues; 5.Culture of safety workforce perceptions, attitudes and behaviors of error “cover up.”

14. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 14 Other 5 Challenges – Global and Local Components The Operating System of Civil Aviation

15. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 15 WHY BOTHER ? Safety versus Benefits

16. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 16 Cost of Safety  Difficult to quantify;  SMS implementation cost-benefit analysis – complicated but should be done;  Requires senior management involvement. If you think safety is expensive, try an accident!

17. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 17 Cost of Safety (cont’d) Total Costs Risk Reduction Losses Protection Costs

18. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 18 Thinking Safety …  There are two ways of thinking safety:  Traditionally – safety has been avoiding costs!  Modern – safety and efficiency are positively interlinked! Safety management system approach reduces losses and improve productivity!

19. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 19 Safety vs Benefits – Why Bother? Yearly Incident Costs PROFIT MARGIN 1%2%3% $1,000$100,000$50,000$33,000 $10,000$1,000,000$500,000$333,000 $50,000$5,000,000$2,500,000$1,667,000 $100,000$10,000,000$5,000,000$3,333,000 SALES REQUIRED TO COVER LOSSES

20. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 20 Benefits – Reducing Costs of Accidents  Direct costs (related to physical damage)  Indirect costs:  Loss of business;  Loss of use of equipment  Loss of staff productivity;  Investigation and clean-up;  Insurance deductibles;  Legal actions and damage claims;  Industry and social costs

21. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 21  Flight delays and cancellations;  Alternate passenger transportation, accommodation, complains;  Crew change and positioning;  Loss of revenue and reputation;  Aircraft recovery, repair etc. and  Incident investigation. Benefits – Reducing Costs of Incidents

22. ICAO EUR/NAT Office Overview Safety Culture Just Culture Implementation Global & local Conclusion Why bother Baku, Azerbaijan, 5-7 April 2006 - 22 Conclusion  Safety – a challenge not easy to achieve;  Safety – can be achieved;  Safety – makes economic sense;  Loss of confidence in the ability to operate – cannot be quantified;  Safety and efficiency are positively interlinked.

23. International Civil Aviation Organization European and North Atlantic Office CHALLENGES AND BENEFITS IN SAFETY MANAGEMENT Baku, Azerbaijan, 5-7 April 2006 END THANK YOU!