Transcript of the video "Why Risk-based Decision Making?"
Video length: 00:30:00
[Canadian Heritage signature]
[Canadian Conservation Institute signature]
[Text on screen: Canadian Conservation Institute (CCI)
Presents an excerpt from:
"Risk management and risk-based decision making for museum, gallery, archive and historic house collections"
Speaker: José Luiz Pedersoli Jr., Heritage Scientist, Scientia Pro Cultura
Session: "Why risk-based decision making?"
This advanced professional development workshop was held March 15-18, 2016 at CCI in Ottawa.]
José Luiz Pedersoli Jr. (Heritage Scientist, Scientia Pro Cultura): "Thank you Jane, very good morning everyone, pleasure to be here at CCI, taking part of this workshop with you today.
This first presentation talk a little bit about risk-based decision making and its application in the heritage sector, trying to make a case here.
So why risk-based decision making?
In our lives we make decisions every day, also as heritage managers and caretakers we have to make decisions on a daily basis.
Simplest case is when there are two options to be chosen from, two alternative course of action to reach a particular goal, so it's a "yes" or "no" decision, such as shall I take my umbrella today?
Or as just the question that was posed before to you, should the museum allow a party in the hall, or lend objects to be displayed somewhere else in a non-museum environment?
Such as an airport hall, this kind of binary "yes-or-no" decisions.
Sometimes there are more options, like which clothes should I wear today?
Range of options, also if you think back with collections and management of collections, sometimes there is a range of options to choose from to reach a particular goal.
So, if you're thinking for instance about budgetary planning, so where should we put the money for this two year cycle?
What are the priorities to reach the institutional goal?
There's several alternative course of action to choose from, so we have to work that out to reach our objectives.
Normally in our lives and also with the management of heritage collections, there's a series of decision ongoing simple ones, complex ones.
Several decisions as we as move on, to reach a particular goal and that goal has to do with the institutional mandate, so it's important to have that clear.
A question now is what's the decision making process in the institution?
So which criteria are used to make those decisions?
Who makes those decisions based on what kind of information?
Often in my experience is kind of a "black box". I talked to institutions "yeah, yeah we did that and that", so we've tried to trace it back it's not so clear.
What are the criteria, based on what kind of information did those decisions are made?
I think that's a crucial aspect in the management of our heritage collections.
When we apply risk-based decision making to this process, it's basically we look to this decisions through a lens of risk assessment.
We consider the different alternative course of action and we look at the risk associated to each one of them.
We identify the risks, we analyze them, we prioritize and we use that information to help us make the decision.
I'm not saying risk-based decision, that the risk assessment is automating the decisions.
The risk assessment doesn't make the decision for us, which provides us with criteria and information to inform those decisions and of course there are other aspects that play a role not only that the risks.
But in risk-based decision making a key criteria is the assessment of risks, so that we use that information to help us choose the best course of action to meet our goals.
And again in terms of heritage institutions and organizations, the goal has to do with the institutional mandate.
In general, it's like preservation and public access to collections in long-term; but specifically if you are an archive or library or museum so we have your institutional mandate that clarifies that.
Sometimes find surprising mandates, not so clear, in those cases the risk assessment is not as effective as it could be because it's heading towards that objective.
So it's very important to have the mandate very clear beforehand.
Text appears on screen: "Risk-based decision making can be applied at different levels from single preservation decisions to the management of entire heritage assets."
It can be used at different levels; from very simple case like one "yes/no" decision to comprehensive ongoing management of large heritage assets.
OK, so just go through a couple examples here for instance, this is one about the single risk decision.
Text appears on screen: "Decisions about a single risk"
Images appear on screen of "ordinary cardboard boxes" on the left hand side; "arrow graphic pointing to the right" and "archival quality boxes" on the right.
This is an example: should the archives replace all ordinary cardboard boxes, like acidic wood pulp container, replace with acid-free museum quality boxes?
Which is best practice, we see a lot of archives or institution that have archives doing that.
How big is that risk if you don't replace it?
So there's a serious investment there and when we look at the risk of contamination of the contents of the box; especially when it's wrapped by a sheet of paper so it's not getting touched directly with the inner part of the box.
This risk is very small and yet the museum, archives especially, are investing a lot of money in doing that.
Is it a good decision? Was it well reasoned?
Or they are just adopting it because it's best practice? So we can use risk assessment to help us inform this kind of decision.
Sometimes you have to weigh different risks against each other."
[Text on screen: Decisions that require weighing 2 risks. Cool the air in collection areas? Faster chemical decay of archival collection x biodeterioration of the historic building (in hot and humid climate)]
[Image on screen: A large collection area is being tested by individuals and their findings recorded]
José Luiz Pedersoli Jr.: "This is an example of archives in the Amazon region in Brazil this archives in a historic house and the decision here was whether to cool the air in this storage room?
For the benefit of the collection, but that had potentially high risk problems for the building, because it's high humidity outside so you could get mold on the wooden parts of the building.
So here you have the risk of fast chemical decay of the collection against the risk of bio-deterioration of the building.
So which one is bigger and how could we use that risk analysis, risk assessment to inform that decision?
How big are each risk in comparison to each other and what's the mission?
So here for instance it's an archive so the collection was way more important than the building, so they went for the decision was to prioritize the long-term preservation of the collection and then to see what could be done about the building in the second.
But still this was clear decision based on the analysis of these two risks."
[Text on screen: Decisions about the design of new facilities]
[Image on screen: Facility blueprint along with a model design]
José Luiz Pedersoli Jr.: "Another example, this risk assessment and risk-based decision making could be applied already when you're planning a new facility.
The location, the kind of terrain, the layout of the building where the storage areas will be, where the piping will be, all the machines in the building.
So you can plan that in advance, you can see it and talk to the architects and engineers and say "OK, let's look at the risk here" at the design stage.
What are the risks? How can we reduce risk here and improve the situation?
So I can make decisions about the design of a new facility looking at the risks already at the design stage which saves a lot of money and a lot of time.
If you don't do that you have to do it later on after the buildings is ready and often after the collections moved there, they take much more complex and it costs much more, so that's another example.
Also, in particular situations, for instance renovation work, typical situation where there's a lot of risks emerging."
[Text on screen: Decisions about risks in special situations: construction and renovation works]
[Images on screen: Internal and external photographs during the renovation phase of work being performed upon a heritage building]
José Luiz Pedersoli Jr.: "This an example of a theatre also in Manaus, in the Amazon region in Brazil, where they were renovating the building especially on the roof.
Here is the big metal beam that was installed just under the roof to help hold the weight of the curtains and the lighting and everything else.
So they had to move this piece up and by looking at the risks here, so this is a decorated ceiling and there was no protection here so this is just above the ceiling where the metal bar was going to be installed.
So we assessed the risk there and we decided to do a simulation, what you can see here, just using a piece of the same dimensions but just made with light wood.
We get everybody trained to move the thing up there and to install it using a lower-risk piece instead of going for the heavy metal one, after everybody was consistently trained so they could move on and do the real metallic beam.
People working with the equipment with sparks, generating sparks inside the building, so that's soldering for instance, that was done in situ, just under the roof, there's a large risk of fire there, lots of combustible materials around.
So these colleagues they were asked to do that work outside.
By looking at the risk that emerged because of the renovation work, we could take action and make decisions to reduce those risks and do the work in a safer way to reach the objectives in a more controlled way.
This is the example of the theatre in Manaus.
Again conservation treatment, when you're facing a conservation treatment which one to use and whether to treat or not?"
[Text on screen: Decisions about conservation treatments]
[Image on screen: Equipment used for laser treatment of paper-based heritage material]
José Luiz Pedersoli Jr.: "This is also a decision.
We can also apply risk-based thinking to say if we do nothing what's the risk?
If we adopt this treatment what are the risks? Or there is another alternative one?
This is an example, of laser cleaning for paper artifacts.
A project I worked on to actually to assess, what would be the benefits and the risks of applying laser cleaning to a paper artifacts?
We looked at the immediate effects and also long-term effects and this case for instance the risk was too high, so there's a lot of uncertainty and a lot of potentially negative effects to adopt it.
Even if it was a faster and automated treatment the risks was still too high to make it feasible.
At that time it said no, not acceptable yet.
That's a fit for all kinds of treatment, not only new advanced one, every time you're considering a treatment you can apply also a risk-based approach, to see what are the risks associated to each course of action.
And of course you can do a comprehensive ongoing management risk approach."
[Text on screen: Ongoing decision making about the long-term use and preservation of collections - comprehensive risk management]
[Images on screen: Computer monitor displaying various images of possibly security camera video feeds. A view of the museum and the surrounding area depicting all buildings, roads, trees and water. External photograph of museum. Train engine from a collection that is located outside. Photographs of portions of a collection. A photograph of visitors inside the museum. A graph is located in the middle of all these images. Depicting various items and their corresponding levels of risk. Note: all the text is neither in English or French and is very small in size]
José Luiz Pedersoli Jr.: "This is just one example of a museum, so here we look at all the risks from sudden catastrophic events, such as large fire or flood, to the slow and gradual cumulative deterioration by chemical, physical, biological agents.
So we do a comprehensive identification of risks, we compare the risks to each other, what you see here it's just the list of the risks and their magnitude compared to each other to help us make priorities; specially on planning, budgetary planning.
So in the next few years where should we put the resource?
What are the priorities for the collection?
In its particular context, and by context we mean the physical context, but also the legal context, the political and policy context, etc.
From single decision to ongoing management, this is all suitable to think about risk when we're doing decisions in this situations."
[Text on screen: Are the challenges of managing your collection keeping you awake at night?]
José Luiz Pedersoli Jr.: "This is coming back to a sentence that was in the announcement of the workshop.
I'm sure it caught your attention there, "are the challenges of managing" now bringing it back to your own context so "are they keeping you awake at night?"
And then a few things to reflect upon in general.
Collections are growing in number and diversity, inside institution but also country wise, so there are more museums being opened and protected buildings being nominated and archives being collected.
They're growing in number and in diversity we have new materials, we have digital media so the diversity of the heritage collections is also increasing.
They are exposed to multiple hazards, both natural and man-made.
There's a growing demand for access, sustainability and accountability and at least in my context the resources are shrinking and everywhere I, and maybe in Canada?"
[Laughter from audience]
José Luiz Pedersoli Jr.: "Okay yes.
So, as heritage managers I think that's a key question: what you do first?
How to establish priorities? When we are planning next two years or next year actions.
What are the priorities, in our context?
How to make the most of the best use of the available resources, which are shrinking?
So often they are not enough to cover everything, to make, to maximize the public benefits of the collection over time.
So with heritage we are also talking long-term.
How to make smart decisions to get there.
This is where the risk-based approach and risk management fits in as a tool as methodology, to help us answer those questions.
Being a coordinated set of activities and methods that is used to help and direct the organization and to control the many risks that can affect its ability to reach objectives.
Or, more simply put, the risk-based decision making methodology or approach to help the organization; this could be an individual institution but also national, national-wide heritage authority; to meet their objectives in a more controlled, with lower uncertainty and more successful way.
This is what risk management is about."
[Text on screen: The risk management cycle]
[Image and text on screen: Communicate and consult; appears at the top left. Monitor and review appears at the top right. Five steps appears in the middle region of the image. The steps are: (1) Establish the context (2) Identify (3) Analyze (4) Evaluate (5) Treat. Steps 2, 3 and 4 are also grouped together by way of the word: Assess. Two arrows, one starting at the top, the other at the bottom of the steps illustrates that this process returns to the first step and begins over again after reaching the final step]
José Luiz Pedersoli Jr.: "It's used several fields, like environment, health, finance.
It's a well-established methodology and this is just the risk management cycle, for instance according to the ISO, ISO 31000 standard for risk management.
It's an ongoing process, so you see the cycle there and there are different steps.
So first of all you should understand the context where it's going to be applied, just physical context, organizational context, political, social, cultural, economics, so we got a good idea where are we going to work with this methodology.
We identify the risks, we analyze them, so we understand each risk and then we evaluate, we prioritized them to make decisions and as necessary modify these risks.
The technical word is "treat" but don't confuse that with "conservation treatment", it is "risk treatment" this time by "treating" we mean everything we do to modify the risk to lower, to transfer, sometimes it is acceptable, so we just retain the risk and move on just like taking the airplane.
There's a risk there but often we accept it and fly around.
The three steps: identification; analysis and evaluation.
It's called risk assessment, when we say risk assessment we are referring to those three steps and then as we are clear on the priorities we take actions to treat and modify those risks that we think are not acceptable.
If we are doing an ongoing management, so we just repeat this cycle.
Sometimes we are just facing one-off decision so we identify the risks analyze and prioritize and make our decision.
The cycle will depend on the kind of decision we are facing, either ongoing management, or just a one-off decision, so that will dictate how often we need to repeat that.
Of course communication and consultation with all stakeholders and different actors and monitoring and review to see how the process is working, if we are reaching the objectives in the way we have, in the anticipated, if the measures we took to reduce the risks are working we also monitor and review that.
This is a cycle; it's generic, so this is used for all different sectors, and here, and what we have been doing on the last couple of years together with all this international parties to adopt that for the heritage sector.
This is something we'll be discussing over the day.
Just a few highlights of this approach so it's specific to the context, that's very important to understand what for instance what's the physical context?
Are we in seismic area or tsunami prone area or close to a river, which kind of climate are we working, also, who are neighbors?
Like industrial area, I see higher, high risk of fire coming from outside, so it's very important to understand that physical context.
The legal aspects, protecting the heritage collections in their implications for making decisions that's very important to understand the legal aspect, the political environment.
Financial context, so how much is available for the next planning cycle?
Can we fund elsewhere?
Can we raise funds elsewhere, is that allowed?
How much of the resource can be dedicated to preservation, security, etc.?
It's very important to have the actors and stakeholders clearly identified internal.
Sometimes even inside the organization they are not all taking into account, especially when you have large organization you have security, conservation and facilities.
Sometimes it's lack of communication there and also outside, police, civil defense, fire departments, there are many actors that play a role there and we should identify them and engage them.
All the policy and procedures concerning the organization and sometimes the social culture environment.
Situations of, I don't know, social unrest and armed conflicts that kind of religious conflict, so it's important to take that all into account.
We're looking not only inside the storage room and display area but it's a much broader context that's important to understand when we start to look at the risks in a comprehensive way.
It is objectives-driven, the focus of applying risk management, a risk-based decision making has to do with the objective of the organization.
The objective, the mission statement drives a lot of the decisions through the assessment of risks.
The assessment of risks it's driven by the institutional mission, so it's objectives-driven process.
The values and significance are at the core of the methodology, so we want to preserve and give access to this significance over time."
[Text on screen: Values and significance at the very heart of the process]
[Image on screen: The object is a fusion between an AK-47 used by drug dealers in Colombia and a guitar made by a known Colombian luthier]
José Luiz Pedersoli Jr.: "It's very important to understand, as part of understanding the context, what's the significance of the heritage asset to the different stakeholders?
Because the decisions will also be driven by, for instance the relative importance of different components of that heritage asset.
This is just an example from object that's in the Museum of Antioquia, in Medellin, Colombia, where you know the drug cartels a big thing there.
This is made by an artist where it's merged the AK-47 rifle with the guitar to show that you can get harmony, you can transform violence into harmony and that's a huge symbolic value for that city.
This is one of the highlights of the collection; special showcase, special place in a museum and it's purely context.
When we start thinking about risks and making priorities the significance of the components of the heritage assets, it's key, it's very important to take that into account."
[Text on screen: All risks taken into account. From sudden and catastrophic events to gradual and cumulative deterioration processes]
[Images on screen: Four photographs: flooded region, showing all buildings partially submerged in water. An item of clothing under bright lighting conditions. A building on fire. An object showing deterioration]
José Luiz Pedersoli Jr.: "The risks are taken into account in a comprehensive way.
We look from all types of risks, from sudden catastrophic to gradual and cumulative process; we try not to leave any important risk out.
Because that can have a negative impact when we use our resource, so if we forget to consider like fire risk for instance which is typically high, if it's not taking into account in the planning, maybe it's not was not the best use of the available resources, so we scan and look at all the risks."
[Text on screen: Quantitative indicator to prioritize risks: Magnitude of Risk]
[Images on screen: Same four photographs shown on screen, but this time with accompanying numerical values associated to each image, depicting the amount of risk associated to each condition]
José Luiz Pedersoli Jr.: "And with the methodology we provide a numeric indicator, so something to quantify the size or the magnitude of each risk.
It's not only identify the risk in a comprehensive way, so we give a quantitative indicator, to show what's the potential of each risk to cause loss of value to the heritage asset?
And that becomes a key criteria to compare risks with each other and to make decisions to inform our decisions.
So we use that."
[Graph on screen: Showing the benefit-cost ratio analysis comparing 50 risk treatment options. Inside a red rectangle are the 10 most cost-effective options, which provide about 80% of the risk reduction expected with the implementation of all 50 options. Note: no risk treatment options are provided in this graph, only numbers]
José Luiz Pedersoli Jr.: "Just the last thing, we also look for cost-effectiveness of solutions when we are trying to treat or reduce risks.
Just to recap, so we identified the risks, we see how big they are in relation to each other, we prioritize and then we say okay these are the priority risks.
Then we look for options to reduce them and when looking for these options we see the cost benefit or cost-effectiveness ratio, see with this amount of money how much can we protect from the value of the heritage asset over time.
This is just an example, the bars there showed the benefit cost ratio for different options.
Each number here correspond to an option.
This was done in Ecuador, the large-scale risk management project for all museums and churches and cultural centres in the country.
Here we are talking earthquake, tsunami, theft, fire, across all risks.
The size of each bar here indicates how much we could protect of the value of these large heritage assets for a certain amount of money being invested there for the same amount of money.
The higher the bar here the more effective this measure is.
What's interesting to see, so this all together there were 50 options we were looking at, if you only take the first 10, which are here inside this red rectangle; the first 10 options they would offer 80% of the protection we could gain by implementing all of them.
So only by taking 20% of all the options, we would offer 80% of the total benefit, so it's very interesting to see that relationship and often institutions are working here.
Because it's easy, it feels good and then now we can do that.
Often if you look at the types of decisions, so there's a lot of activity here, the low cost effectiveness and there is not so much here.
When we do that kind of assessment, that surfaces and then that is eye-opening just to help us improve the decision.
That's an interesting aspect."
[Text on screen: Promotes integration of different parts of the organization and beyond]
José Luiz Pedersoli Jr.: "Four puzzle shaped pieces appear on screen: "Labeled as: Conservation department; Facilities management; Education department; and Security."
Then, as I said, as we do risk management, it promotes integration of different parts of the organization and beyond.
The different sectors and actors, inside and outside the organization.
For instance conservation department, facilities management, education, security and then you can go university, fire brigade, etc., as you do that you expand and that's an added benefit.
Because it's touches on different, like hydrological risks, seismic risks, security, so it touched on different areas of expertise, so it encourages and we should get out of our comfort zone and engaged is this other stakeholders."
[Images on screen: The risk management cycle and the 5 steps is shown; along with a figure in a bed who is thinking/dreaming about counting 5 sheep]
José Luiz Pedersoli Jr.: "OK, so the idea is that, if we adopt that, so with risk management we can have a better sleep, can sleep better at night.
Because we will be more certain, not 100% certain, but more certain that the risks will be under control and our decisions were the best we could do taking into account the risk to the collection.
Thank you very much."