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The Impracticality of Defining “Practical” in Risk Reduction

Industries remain flexible in risk reduction strategies.

Risk reduction is critical for organizational safety and includes everything from accident prevention to crisis response. However, defining “practical” in risk reduction measures is challenging because every organization’s structure, resources, culture, and regulatory environment differs.

This article explores the issue of using a single definition for practicality in risk management and discusses how those organizational differences influence the safety precautions a company might take.

What is “Practicality” in Risk Reduction?

“Practicality” in risk management refers to how easily a company can take specific measures to reduce the risks of accidents and incidents and whether those measures make sense. “Practical measures provide the most safety without unreasonable costs or operational disruptions.

However, different organizations define what is practical differently due to variations in scale, risk exposure, financial capabilities, and cultural attitudes toward safety.

What Factors Impact Risk Reduction?

Financial Resources

Financial resources can significantly affect the practicality of risk reduction. Large, wealthy corporations will likely have no problem investing in new safety technology and training programs. However, small and medium-sized enterprises might find the costs prohibitively expensive.

For instance, a global manufacturing company might invest in advanced real-time monitoring systems across its factories without issues. However, a small, local manufacturer with limited funds may find periodic manual inspections more workable.

These disparities affect the level of risk each organization can practically manage and the potential outcomes of risk-related incidents.

Regulations

Regulatory environments can also influence what a company considers practical. Compliance with safety norms is mandatory in highly regulated industries like pharmaceuticals, aviation, or nuclear energy, forcing those organizations to reallocate resources or revise operational practices, potentially at the expense of efficiency or profitability.

However, in less regulated sectors, the term “practicality” might refer to minimal compliance, leading to a wide variance in safety standards.

Company Culture

Company culture can also influence views on practical risk management. Organizations with a strong safety culture are committed to meeting safety standards beyond essential compliance. In these cases, practicality includes any measure that enhances safety, regardless of its direct impact on financial performance.

On the other hand, in organizations where safety culture might be secondary to production goals, only those interventions that do not impede operational efficiency may be considered practical.

Advancing Technology

Technological advancement presents another challenge in defining practicality. New safety technologies can bolster risk management, but adopting them requires organizations to be adaptable and forward-thinking.

This means the practicality of modern technologies might depend on an organization’s ability to integrate and maintain these systems and its workforce’s readiness to adapt to new protocols.

Use Cases in Defining “Practical” Risk Reduction

Examining specific case studies can illuminate how differing definitions of practicality influence risk management strategies:

Aviation, Tech, Construction, and Healthcare

In aviation, where the cost of failure is exceptionally high, adhering to rigorous maintenance schedules and pilot training programs supported by international regulatory standards is practical.
Tech startups might prioritize speed and innovation over stringent risk management practices, especially those that hinder rapid development and deployment cycles. For these companies, practical risk management might focus more on cybersecurity and data integrity than physical safety measures.
Small construction firms often struggle with the practical aspects of implementing comprehensive safety programs due to cost constraints, unlike larger firms, which might find it helpful to invest heavily in safety due to the scale of their projects and workforce.
Practical risk management in the technology sector focuses on cybersecurity measures, data encryption, and frequent software updates to protect against data breaches and hacking incidents, which are more pertinent threats than physical injuries.
Risk reduction strategies in healthcare focus on patient safety and data privacy. These should include strict sanitation processes, personal protective equipment (PPE) use, and adherence to HIPAA regulations.

Financial and Educational Institutions, Manufacturing, and Retail

For financial institutions, practical risk management involves sophisticated cybersecurity measures to prevent fraud and data breaches and financial risk management strategies like liquidity reserves and diversification to handle market fluctuations.
Schools and universities focus on ensuring student safety and data privacy. Practical measures might include campus security personnel, bullying prevention programs, and digital safety measures for student data.
Risk reduction in manufacturing often emphasizes both safety and efficiency, and strategies to boost both include regular machinery maintenance, training to handle hazardous materials, and automation to reduce human error.
For retail businesses, practical risk management might prioritize loss prevention strategies like security cameras, anti-theft systems, fire safety measures, and emergency exits to protect customers and staff.
Practical risk management for maritime operations involves regular vessel inspections, adherence to international naval safety laws, and crew training in handling rough weather conditions and emergencies at sea.
In agriculture, practical risk reduction strategies might focus on safely handling and applying pesticides, weather forecasting for planting and harvesting, and ergonomic tools to prevent injury.

Each industry implements risk reduction strategies to address specific challenges, making what is “practical” highly dependent on the situation. This illustrates the diversity in how safety and risk are managed across sectors.

Don’t Be Inflexible When Defining “Practical”

Defining what is practical in risk management is inherently complex and varies significantly across organizational contexts. What one company considers possible and sensible may seem overly cautious or economically unviable to another.

As such, all companies should consider a flexible approach to risk management that considers financial capabilities, regulatory requirements, organizational culture, and available technologies. The challenge is not finding a universal practicality standard but adapting risk management practices to meet each organization’s unique needs and constraints.

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About the Author:

James A. Junkin, MS, CSP, MSP, SMS, ASP, CSHO is the chief executive officer of Mariner-Gulf Consulting & Services, LLC and the chair of the Veriforce Strategic Advisory Board and Professional Safety Journal’s editorial review board. He is Columbia Southern University’s 2022 Safety Professional of the Year (Runner Up), a 2023 recipient of the National Association of Environmental Management’s (NAEM) 30 over 30 Award for excellence in the practice of occupational safety and health and sustainability, the American Society of Safety Professionals (ASSP) 2024 Safety Professional of the Year for Training and Communications, and the recipient of ASSP’s 2023-2024 Charles V. Culbertson Outstanding Volunteer Service Award. He is a much sought-after master trainer, keynote speaker, podcaster of The Risk Matrix, and author of numerous articles concerning occupational safety and health.