Additional Information about Program Risk

Define Program Risk:

Risks that are inherent to the program’s structural, programmatic, and management processes.

 

Define MKV Program Risk:

A risk, that if realized, would have a serious adverse affect on MKV program funding, viability, performance, schedule, cost, or design and implementation process efficiency, effectiveness, and credibility.

 

Define Critical MKV Program Risk:

A program risk that if realized, would nullify, seriously degrade, or jeopardize the success of the MKV program.

 

Program risks are the result of instability or sub-optimal processes that have a serious adverse impact on the program.  Historically, unnoticed and thus unmitigated program risk has done much more to damage and undermine the success of DoD acquisition programs than has unnoticed and unmitigated technical risk.  Program risk is mitigated by improving management awareness and management processes.

In Industry, Program risk assessments (though they are not necessarily called that) are common and routinely implemented by independent management consulting firms.  DoD government/corporate culture primarily runs programs by employing the command authority management process pervasive in the military.  Consequently, the assessment of program risk, being antithetical to the command authority management style, is generally ignored leaving programs only aware of their technical risk.  Unmitigated program risk is by far the greatest single cause of the failure of DoD major acquisition programs.

Introduction: The General nature of program risks:

·         Though program risk is often not as obvious, dramatic, or interesting as technical or performance risk, it can be just as critical and produce just as large an impact on the MKV program.  Unmitigated program risks can kill or degrade a program just as surely as technical risk, and it is much more likely to do so. 

·         Most programs that are terminated, fail, or seriously overrun cost and schedule do so because of unmitigated program risk.  Rarely is a program unsuccessful because of a failure to mitigate technical risks. 

·         Program risks are typically more serious and more potentially destructive than they look – damage inflicted is often long term rather than immediate, systemic rather than specific, and insidious rather than obvious or straightforward.

·         Though program risks are exceeding difficult to acknowledge, they are, once acknowledged, often very easy to mitigate or partially mitigate.

·         Program risks are generally not taken as seriously, or worked as thoroughly as technical risk.

·         Think of actualized unmitigated program risk as a heavy weight that the program must drag along with it as it goes about its business designing & building the MKV system, or as internal bleeding that never clots or heals – on the other hand, actualized unmitigated technical risk is more like a well defined barrier that is very difficult get through or around.

·         Many program risks require a certain level of competency and awareness from management before they become visible or appear significant – even after they are directly pointed out.

·         Program risks that could be easily and effectively mitigated are often ignored because of the erroneous belief that nothing can be done about them.  Partial mitigation or just increasing awareness of the issue can be an important contributor to the success of the program.

·         Many risks cannot be mitigated completely, and some cannot be realistically or practically mitigated at all, however, defining and assessing the impact of a program risk that is subsequently accepted rather than mitigated can be tremendously valuable to the program by making the risk better understood, its potential impact formally acknowledged, and by requiring top level management to officially take the responsibility for deciding to accept it rather than mitigate it.

·         Program risks are generally created by sub-optimal management – i.e., by incompetent, inattentive, inexperienced, or overworked management that doesn’t have the time, understanding, or inclination to pay attention to important process quality details or who have political or personal agendas/pressures that are intertwined with the program’s agenda.

·         Most program risks can be quickly, easily, and inexpensively mitigated or partially mitigated simply by improving management awareness, planning, and policy.

·         Although program risks can be generated at any level within the organization, higher levels of management have the capacity to generate greater levels of risk.

·         To wait until “management by crisis” forces one to pay attention to a management issue that is degrading the effectiveness of the entire program is to wait well beyond the time when easily implemented cost-effective solutions were available. 

·         Because management is both the source of the risk and must identify and mitigate the risk, many program risks are never recognized/defined and never mitigated; they simply fester, slowly but steadily sucking time, energy, dollars and positive attitudes from the program – they represent a source of friction in the overall process. Over the course of years, such sources of friction are additive and usually have a debilitating or corrosive effect on the program that appears (to unaware program managers) to be hard to identify, impossible to fix, and entirely unavoidable – when in fact they have all along been quite obvious to many, are easy to mitigate, and entirely avoidable.