On a rocket-engine development project, any number of mistakes can lead to an explosive ending, but for Mike McKeon, managing those risks isn't rocket science. “If a rocket is going to fail, it happens in milliseconds, and there is very limited time to manage the problem,” says Mr. McKeon, an extreme engineering program manager at aerospace firm Pratt & Whitney Rocketdyne.
His sole focus—discovering problems and solving them before they lead to failure—isn't only about ensuring project success. It's also about protecting lives, as these projects take place in extreme environments such as deep space or deep sea.
“Risk management has to be integrated into the project management process from the beginning,” he says, “and it has to be a living, breathing thing.”
We incorporate risk management in the proposal phase. Before we sign any contract, we look at all the risks and opportunities in every category—legal, technical, programming, engineering—and we mitigate as many of those risks as possible during the negotiation process.
For example, one key risk we face hinges on intellectual property. When we design a piece of equipment for a client, other organizations could later make a third-party intellectual-property claim if they believe we infringed on their rights. They'd present a legal case that we used their design or knowledge and demand compensation.
This does happen in our industry, and that can be a costly legal battle for our company. To mitigate that risk, we negotiate indemnification into the contract, which transfers the responsibility of such claims to our client.
With that risk essentially off our plate, we can focus more on the physically threatening risks during the project.
How can risk management during the project life cycle help improve the quality of the end deliverable?
One helpful method tracks turnbacks. A “turnback” is when something doesn't happen the way it is supposed to, but the problem is caught before it gets to the customer. If a machinist creates a part and it doesn't turn out correctly, that's a turnback. We collect turnbacks hourly and log that data to help us flag issues and find the root cause that created the problem.
I've seen many projects fail because people follow the same assumptions all the way to the end without ever considering if they are still correct.
How do you help other industries understand risk management strategies?
Because the rocket and offshore-oil industries have integrated systems with added complexity, we've had many offshore-oil customers come to us with problems such as extreme temperature variances.
We make it clear to potential clients that we know we are not domain experts. However, we are experts in understanding why things fail and how to get at the root cause of failure so that you can create a plan to fix problems before disaster happens.
Then, we bring a system-wide risk approach to the organization's process. In that environment, you can't look only at each piece of equipment. You have to look at how all the pieces interact. PM