Raytheon Improves Risk Visibility and Responsiveness by
Embedding a Proactive Risk Culture with ARM
Solution: Implement understanding ERM software of risk, inability and make risk to identify and management prevent risks a priority
Results: Risk-aware organizational culture with proactive risk management The Challenge
Raytheon launched an ambitious
program designed to change its risk culture from reactive to proactive, and to accurately forecast and mitigate the impact of risk on key programs. With a history of innovation spanning 90 years, Raytheon provides state-of-theart electronics, mission systems integration and other capabilities in the areas of sensing, effects, command, control, communications and intelligence systems, as well as a broad range of mission support services.
Prior to implementing an Enterprise Risk Management (ERM) program, Raytheon had insufficient understanding of how risk affected its projects. The culture at
Raytheon was reactive and not truly risk-aware. The focus was on fixing problems and putting out fires, rather than a proactive approach of identifying and preventing problems before they occurred. Raytheon’s brightest thinkers were engaged almost exclusively with their daily tasks of technical scope, rarely able to raise their heads to look at the big picture or gain visibility of the risk landscape.
Without access to comprehensive risk data, Raytheon found it difficult to identify its outstanding risks and their probability of occurrence, causing forecasts to be less accurate. There was also a disconnect between the information used by employees on the ground and executive decision makers.
Raytheon can now produce monthly risk reports in a quarter of the time, improving responsiveness to customers. In 2011, Raytheon launched an ambitious Enterprise Risk Management program designed to change its risk culture from reactive to proactive, and to accurately forecast and mitigate the impact of risk on key programs. Raytheon’s ERM program is underpinned by Active Risk’s ARM (Active Risk Manager) software. In addition to identifying risks and showing their interconnectivity, ARM is also a critical tool in
Raytheon’s metrics reporting – the means by which the Company measures behaviors and reports each month to its management team.
When Raytheon introduced its risk program, it began by addressing ERM at an organizational level. Rather than viewing ERM as an administrative function, senior management decided to make the risk management program more visible throughout the entire company. In addition to holding regularly scheduled risk workshops with employees, Raytheon also implemented a risk board, which reviews consistent scorecards and checklists to gain full visibility of risks and to maintain accountability.
Using ARM to identify risks,
successfully completed its part of NASA’s nextgeneration satellite program launch, on-time and onbudget.
Raytheon’s implementation of an ERM program supported by Active Risk Manager has driven benefits across the company, including