The typical management systems used to address the issue of operating
risk centre around technologies that identify, analyse and evaluate the risk
factors. These logical systems such as HAZOPs, Fault Tree Analyses, etc
rely heavily on technical considerations and process flow analysis. However, several research projects, across industries and countries
have clearly shown that up to 80 per cent `operating risk' is determined by
the actions of workers, supervisors and managers. Yet, most of the focus
of risk management is on technical and procedural issues. This suggests
that a significant imbalance exists in our management systems and that
industries are unlikely to show significant improvement on current levels
of safety performance. Effective risk management must include the intangible element of the
organisation psychology towards risk. A practical and theoretically sound
approach had been researched and developed in and for the mining
industry. This paper describes the approach and methodologies applied at
the Cosmo Howley Gold Mine in the Northern Territory, where an
inclusive approach to managing financial and operating risk was
followed. The Cosmo Howley Mine showed a dramatic reduction in lost time
injuries and improvements in financial indices - providing conclusive
evidence of the link between management effectiveness, safety and
productivity. This `triangle' has often been the subject of speculation and
theory. It is demonstrated in this paper how the management team of
Cosmo Howley focused their practices and systems on the improvement
of organisational dynamics, ensured tangible and clear focus on
parameters of costs and safety and how the improvement process was
managed. It is concluded that the improvement process did not require a `major
re-engineering' of the organisation. The organisation culture changes that
occurred were incremental, planned and effective. It entailed the
implementation of sound risk management methodologies, and ensured
that a significant emphasis was placed on an aspect that is defined as
`organisational dynamics'.