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NASA’s Use of CRM and Its Possible Deficiencies
NASA has been using the principles of Continuous Risk Management (CRM) extensively due to the flexibility that they offer. Particularly, the opportunities for extending the project life cycle need to be mentioned as the primary reason for the organization to deploy the identified approach: “Since their introduction and until recently, NASA RM processes have been based on CRM, which stresses the management of risk during the Implementation phase of the NASA Program/Project Life Cycle” (NASA, 2011, p. xv). The incorporation of the CRM into the organizational framework allows coordinating the essential procedures, with a close supervision of the factors that have the greatest effect on the core processes.
The company has created a set of performance commitments that helps it improve the quality of the staff’s performance and make sure that the essential tasks are completed in a timely and efficient manner. Furthermore, the organization has introduced the concept of risk tolerance into its operational design so that the crucial processes could be carried out on a risk-normalized basis: “In this way, stakeholders and decision-makers can deliberate the performance differences between alternatives at common levels of risk, instead of having to choose between complex combinations of performance and risk” (NASA, 2011, p. 12). Thus, a solid foundation for the decision-making process is created.
Four Areas of Risk Management: NASA’s Perspective
In order to address the identified risks successfully, one must map their areas carefully so that the path to continuous RM could be created. Furthermore, quantifying the threats that the project is facing should be viewed as a necessary step toward facilitating safety: “We prefer to use quantitative scales because they are straightforward in generating numbers, especially if you have been successful in calculating or translating all of your impacts to a single quantity” (Smith & Merritt, 2002, p. 89). Therefore, locating the areas of potential risk management strategies is a crucial step toward mitigating the dangers. At NASA, four areas are typically defined. According to the organization’s statement, these four aspects include “time to completion, project cost, data volume, and planetary contamination” (NASA, 2011, p. 77). Although the idea of narrowing the number of areas to be included in the design of a risk management strategy may affect the success of the process, it helps organize the procedure. As a result, the outcomes of the RM turn out to be quite positive. Meeting the goals that were set sat the beginning of the project, the tools used by the organization create prerequisites for a detailed analysis of the key factors and the further mitigation of the threats.
RM/RIDM and CRM: Definitions and Relations
It should be borne in mind, though, that the approach designed by NASA allows not only creating a unique framework for risk management but also sets prerequisites for the further enhancement of the staff members’ performance. For these purposes, the concepts of RM/RIDM and CRM were coined. By definition, RM/RIDM (Risk Management and Risk-Informed Decision-Making) implies that the processes of addressing the existing threats to the wellbeing of the project should serve as the foundation for making choices regarding the further course of its development. It would be wrong to claim that the identified concepts restrict the participants to a set of options that must be selected in order to maintain the viability of the project. Instead, the factors that the decision-making process at NASA hinges on should be interpreted as the means of controlling the quality of the staff’s performance. CRM, in its turn, can be viewed as Continuous Risk Management, and it implies that addressing the threats that emerge on a regular basis must be carried out as a consistent and unceasing process. Therefore, in a certain way, CRM can be considered the tool for measuring the performance of the staff since it helps define the extent to which the risk management strategies are followed in the organization.
Cost-Efficient Risk Management: Definition
The process of addressing the existing risks implies using all resources available to prevent the major threats. However, to design the strategy that will help manage every factor possible, one is likely to need a large number of resources, including the financial ones. As a result, the sustainability of the project that needs to be protected from the risks will become questionable.
To remove the threats to the project’s existence and at the same time make sure that the rest of the issues could be handled in an adequate manner, one will have to check that the resources at hand should be distributed in a sensible fashion. In other words, the principles of sustainability must be introduced into the project. At this point, cost-efficient management needs to be brought up.
By definition, cost-efficient management implies that the expenses for the project should be reduced to a minimum. Therefore, by stating that there must be a cost efficient strategy deployed when instituting risk management, one means that the RM tools should consume a reasonable number of resources. Furthermore, the amount of waste produced in the process of the project implementation should also be cut significantly so that the project could remain sustainable.
NASA. (2011). NASA risk management handbook. Web.
Smith, P. G., & Merritt, G. M. (2002). Proactive risk management. New York, NY: Productivity Press.