Summary

Broadleaf was engaged by a water and wastewater utility to assist in the development of a risk management strategy for a large wastewater treatment plant. There was a particular focus on the operational reliability of the plant, and a requirement to integrate the strategy with day-to-day business processes.

Our work was based on the international standard ISO 31000, Risk management – Principles and guidance. This case study focuses on the analysis of stakeholders, part of the initial step of establishing the context.

In many circumstances, stakeholders are given only a small amount of attention, as just one of the headings to be noted as a risk management process is implemented. However, the treatment plant was close to a suburban community and there were many individuals and organisations with an interest in its operation, so stakeholder analysis was an essential part of our risk management activity. The case illustrates the approach used to the develop criteria for analysing the consequences of risks.

Background

The wastewater plant services a large metropolitan population. It is an ocean outfall plant, located on the coast. Wastewater is screened to remove grit and solid objects, and then processed through high-rate primary sedimentation tanks. Chemicals are added to reduce odour and promote sedimentation. Processed wastewater is discharged to the ocean after primary treatment.

For some categories of plant failure, untreated wastewater is discharged directly to the ocean, in what is known as a bypass event. Partial or full bypasses are of great concern to the plant owners, plant managers and the community.

A risk-based reliability improvement programme had been established shortly before we became involved, designed to address specific local issues under the direct control of the plant management team. However, it was recognised that there were also more general and organisation-wide issues that could only be addressed by the plant owners, particularly those that would require substantial external resources.

Approach and outcomes

Overview

The way in which stakeholder analysis was conducted is illustrated in Figure 1.

• Brainstorming was used to generate a detailed list of stakeholders
• Objectives for the main stakeholders were discussed
• Stakeholders were grouped, based on similar objectives, and objectives were refined iteratively
• The objectives were used to create a set of criteria, to which priorities were assigned
• The criteria were used later, in the risk analysis process (not discussed here), to rate the impacts of identified risks.

Stakeholder workshops

As part of our work, we had proposed that stakeholders and interested parties would be identified and consulted, with three half-day workshops involving external stakeholders (including local and community representatives), plant personnel and senior managers from the plant owner. In practice, it was decided that two workshops would be conducted instead of three and involve only internal personnel. Staff involved closely in community and media liaison would represent the views of external stakeholders.

The two workshops were held at the plant. Their purpose was to list the stakeholders and their objectives, and specify criteria for analysing the consequences of risks.

They were facilitated brainstorming workshops, covering:

• An introduction to the risk management task and the processes to be followed during the workshops
• Stakeholder analysis, including stakeholder identification and objectives
• Development of criteria and associated priorities.

Participants in the first workshop were 17 senior managers from the plant owner organisation and the plant itself. 16 plant operations personnel participated in the second workshop.

Stakeholder identification and consolidation

Each workshop developed an extensive list of stakeholders, those individuals and organisations with the potential to influence operations at the plant or those that might be affected by plant operations. More than 90 distinct stakeholders were identified across the two workshops.

This number of stakeholders was too large for them to be addressed individually. However, analysis of their objectives allowed them to be categorised conveniently into four main groups (Table 1). The objectives of the stakeholders in each group were not identical, but they were broadly aligned.

Objectives, criteria and priorities

The detailed stakeholder lists were used to develop ideas about the objectives of the many parties with an interest in the plant and to form the stakeholder groups noted above.

The objectives were summarised in a shorter set of criteria, used to assess the consequences of risk events in later stages of the risk assessment. Criteria from the two workshops combined are shown in Table 2, summarised under eight key words.

Participants were asked to ‘vote’ for the criteria, to generate in initial rating of their relative importance:

• Criteria were listed on a large sheet of paper on the wall
• Participants were each provided with a strip of ten adhesive dots, to allocate to criteria in any proportion they chose to reflect their views about the importance of each one.

There was significant commonality among the criteria generated in the two workshops, in that all participants rated bypasses, compliance with legislative and licence conditions, community issues and safety as important. However, the senior managers also raised other ‘external’ matters, including customer satisfaction, while the plant personnel focussed more on ‘internal’ matters like productivity and plant efficiency. Figure 2 shows the indicative priorities.

Risk assessment workshops

The criteria developed from the stakeholder analysis (Table 2) were used to rate the consequences of risks in the risk assessment workshops that followed.

Lessons

Stakeholder identification and participation

With a focused group of participants, it is possible to identify many stakeholders relatively quickly. The community and media liaison personnel were able to list many community stakeholders and groups, and discuss their priorities in detail, including those priorities that may have been unpalatable to the plant owners and managers.

We have found in other situations, as we did here, that community liaison teams can be good surrogates for community stakeholders. Their job is to understand community concerns and they interact closely with opinion leaders, individuals and groups. Because they are somewhat detached from the community, but in close contact with it, they are able to present community perspectives without becoming emotional, a major advantage when sensitive matters are being considered. In the environment of a risk assessment workshop, this allows the community and its concerns to be regarded as part of the context and often part of the solution, rather than just another ‘problem’ to be dealt with.

Grouping by objectives

Grouping stakeholders by their objectives was useful in this case, particularly as the purpose was to extract criteria based on those objectives. The iterative approach worked well, with an initial analysis generating an initial grouping, and that grouping facilitating further codification of objectives.

Setting priorities for criteria

The voting process for allocating priorities to criteria was simple and well accepted. It was a practical process that was far easier than asking each participant to generate a notional numerical weight. Nevertheless, it forced the workshop participants to think carefully as they placed their markers.

Criteria for risk analysis

Using stakeholder objectives to generate criteria for risk analysis is important where the outcomes from the process must receive broad approval if they are to be accepted. In this case, the criteria were used directly in the analysis and the linkages were clear.

In other circumstances an additional step may be needed. Many organisations have enterprise risk management (ERM) processes that contain criteria related to their corporate objectives, and those objectives usually include stakeholder matters to some extent. If the enterprise criteria are mandated in the organisation, to be used in all risk assessments, then the outcomes from an analysis like the one described here must be mapped onto or reconciled with those enterprise criteria.

It is our experience that this mapping process is relatively simple if the ERM process has been developed carefully and the corporate objectives it reflects are based on a sound strategic plan. For example, the set of criteria in this case, listed in Table 2, would not look out of place in the risk analysis tables used in the ERM processes for many community-facing organisations.

Only the bypass criterion is specific to this particular situation. If the organisation did not have a bypass criterion, then two approaches could be used:

• The implications of bypass events could be considered in terms of their effects on compliance, community, environment and reputation criteria without losing significant detail
• A rating scale for bypass impacts could be created, worded so it was compatible with existing rating scales for compliance, community, environment and reputation, and used alongside those scales for risk analysis.

Identifying stakeholders, considering their objectives, deriving criteria for the risk analysis and comparing those criteria with the criteria embedded in the organisation’s ERM process is part of establishing the context. The outcomes of these context-related activities should be included in briefing material issued to participants in risk assessment workshops. When developed in this way, the criteria form a clear base for ratings generated in the risk analysis process.