I have always assessed risk by weighing the likelihood of the risk against potential consequences. Risk assessment happens at the component and the mission level. Both are important and both need to be considered in a leader’s toolbox, but these are viewed differently depending on where you sit. However, you can’t really evaluate the difference between likelihood and consequences without understanding the larger benefit, or the “why” behind a mission.

For example, consider the bigger picture of human spaceflight. From a risk management perspective, the safest place is on the ground. From a risk leadership perspective, being on the ground is the biggest risk and cedes our leadership in space to other countries.

I believe it takes a new mindset to balance all risk components and make decisions that best serve any mission. This mindset is what I define as “risk leadership.”

Balance details with big picture

For instance, solely focusing on cost control can lead to “penny-wise, pound-foolish” decisions. We don’t always have to spend more to get better results, but we do need to spend money in the right places to get the best results. At the same time, assessing technical risk is constrained when we think, “We’ve always done it this way,” without the recognition of how innovation could provide greater benefits. Similarly, when we manage to an artificial timeline, we can create unintended risks by making decisions based on an unrealistic schedule.

These obvious risks — cost, schedule and technical — are challenging to balance. Add in acquisition insight/oversight models and projects become even complicated, expensive and hard to manage.

This is a vicious cycle and it takes a risk leadership mentality to fight through it.

The impact of mistakes

Think about it. A mistake is made. This leads to internal investigations and corrective actions. New processes are added to mitigate the mistake reoccurring. This is how the Federal Acquisition Regulations (FAR) becomes unwieldy and the rules and regulations for procurement become nearly incomprehensible to everyone.  

Ultimately, this means future efforts become more about protecting against future mistakes than accomplishing the mission. When that happens, decision velocity grinds to a halt as risk aversion sets in. And those important mission benefits? Delayed and sometimes even cancelled.

Don’t get me wrong, these reactions are well earned. Mistakes are costly to taxpayers and, in the most tragic cases, they cost the lives of brave men and women who entrusted us as leaders to do better. But how do we keep the pendulum from swinging so far to risk avoidance that it impedes our ability to efficiently and effectively complete the mission? 

This is where risk leadership becomes important.

Keep your eyes wide open

I often tell new leaders that managers do things right and leaders do the right things.  This applies to risk as well. 

Risk leaders take an “eyes wide open” approach to risk and decision velocity by keeping the overall benefit of the mission in mind, assessing the data before them and encouraging a speak up culture so all risks are on the table. 

British structural engineer A.R. Dykes said, “Engineering is the art of modeling materials we do not wholly understand, into shapes we cannot precisely analyze, so as to withstand forces we cannot properly assess, in such a way that the public has no reason to suspect the extent of our ignorance.”

As a space company, our missions ultimately protect our freedoms, expand our scientific knowledge and discovery, and provide the information needed to make life on Earth better for everyone. Embracing risk leadership is the only way to complete those missions in the most effective and timely way.

Our business will never be without risk. Period. But how one deals with the many risks seen while still accomplishing the larger mission will separate managers from leaders.

My charge to you is to evolve from a risk manager to a risk leader. With that mindset, what can you do to impact your organization?