This case study supports and illustrates the theoretic factsheet "Risk management for safe water enterprises" with practical insights.
Technology and Action for rural Advancement (TARA) is a social enterprise, part of the Development Alternatives Group, set up in 1982 in New Delhi. TARA consists of multiple sub-businesses that aim at fostering employment, entrepreneurship, sustainable technologies, as well as meeting basic needs in India. TARA began early on to observe the lack of access to clean drinking water. To react on this need the social business began producing and selling Aqua+, a 50 ml bottle of sodium hypochlorite solution (liquid chlorine) (see picture below).
During the development of the social enterprise different incidents occurred (accidents, need of certification etc.) that were hampering the development of the enterprise. To be able to cope with future reoccurrence of such risks, TARA developed a thorough risk management plan for its chlorine flask production unit.
A document was developed by project managers in collaboration with staff involved in commercial and production activities to receive broad information and diversified perception on potential risks. This process also served creating awareness for potential risks among employees. For risk identification methods as brainstorming, interviews and SWOT analysis were utilised.
Qualitative risk analysis chart
To analyse identified risks, TARA implemented the following simple, but very useful qualitative risk analysis chart facilitating the manager’s work. Based on probability and impact of occurrence each identified risk was assessed by the project manager, with input from the project team applying the method shown in the figure below:
- High (H)– Greater than 70% probability of occurrence
- Medium (M) – Between 30% and 70% probability of occurrence
- Low (L) – Below 30% probability of occurrence
- High (H) – Risk that has the potential to greatly impact project cost, project schedule or performance.
- Medium (M) – Risk that has the potential to slightly impact project cost, project schedule or performance.
- Low (L) – Risk that has relatively little impact on cost, schedule or performance
Impact/probability combinations of H-H/H-M/M-H are considered highly risky and are color-coded RED. Combinations of H-L/M-M/L-H are considered mediocre risks and color-coded YELLOW. Combinations of M-L/L-L/L-M are considered low risk and color-coded GREEN, as shown in the figure above.
For each of the major risks identified, falling in RED and YELLOW zones one of the following approaches was selected to address and plan for:
|Results||Action to take|
|Avoid||Eliminate the threat or condition or protect the project objectives from its impact by eliminating the cause|
Identify ways to reduce the probability or the impact of the risk
|Accept||Nothing will be done and the risk with its low probability of occurrence accepted|
|Contingency||Define actions to be taken in response to risks|
Shift the consequence of a risk to a third party/person together with ownership of the response by making another party/person responsible for the risk (buy insurance, outsourcing, etc.)
According to these classifications different actions will be taken when risks are occurring. All occurring risks are also reported to the management to imply potential strategic changes if needed. On a weekly bases the responsible project manager is reassessing the identified risks and reports changes in place.
Examples of identified internal risks of the company
- Health risk
Health risk during chlorine production and first aid measures for emergency (“contingency”)
Eyes: In case of contact with eyes, rinse immediately with plenty of water and seek medical advice.
Skin: After contact with skin, take off immediately all contaminated clothing, and wash immediately with plenty of water.
Ingestion: If swallowed, do not induce vomiting: seek medical advice immediately and show container or label. If swallowed, rinse mouth with water (only if the person is conscious).
Inhalation: In case of accident by inhalation: remove casualty to fresh air and keep at rest.
- Risk of fire in company premises
Firefighting Procedures Flash Point (Method Used): Non-Combustible.
Extinguisher Media: Water Sprays placed on each floor.
Special Firefighting Procedures: Firefighters should wear full protective equipment and NIOSH approved self-contained breathing apparatus.
Lessons learnt from TARA’s risk management development
- A consistent risk management plan is just the beginning to really mitigate occurring risks a company and its employees are exposed to.
- To make a risk management plan work in practice it is important that the assigned manager takes time for implementing and assessing potentially occurring risks on an ongoing basis.
- To react on identified internal risks, it is important organising a risk reduction workshop in order to brief and train all staff as early as possible.
- Identifying internal risks can lead to more efficient procedures, as risk identification asks for clear analysis of processes and procedures.
Recommendations for replicating TARA’s risk management process
- Is your company’s staff exposed to potential risks? If yes, it is key to address those thoroughly in order to avoid injuries of staff members that might lead to handicaps and the inability to work anymore.
- Identify potential internal risks already from the beginning of setting up your safe water business. It will allow your staff having an elevated risk affinity and make them more cautious to potential incidents.
This paper discusses how social enterprises can overcome barriers to scale in serving the BoP market – Focus on Spring Health in India.WELLSTEIN, M. (2016): Delivering safe water to BoP consumers - The art of not losing money. St.Gallen: University of St.Gallen URL [Accessed: 20.04.2018]