A New Way to Manage an Agency

In this month's Government Executive magazine, Nextgov's Tech Insider blogger Robert Charette, a risk management expert who consults with federal agencies, argues that agencies would meet their missions better if they adopted risk management techniques as part of their strategic management plans.

It's a radical departure from how the government manages its affairs now. But it's an obvious choice agencies should make, which would greatly improve outcomes, Charette contends. All agencies, he says, are in the business of reducing the people's risks, and if agencies followed risk-based approaches to their business, they would have better outcomes such as fewer plane crashes, fewer food illnesses, and fewer financial scandals -- even better run national parks. Using risk management techniques many lead managers to rely on information technology more, Charette has pointed out in the past. For example, the Food and Drug Administration would have long ago developed a system to track adverse effects from new drugs it had approved, instead of relying on reports form doctors and pharmaceutical sales reps. The agency is still working on the system, which will allow it to more quickly determine if a new drug is creating serious problems.

How do you manage with more of a risk-based approach? A sidebar to the article presents eight questions a top executive should ask. The list is copied here:

Developing a management strategy to reduce the public's risk means asking the right questions. The answers will inform what management processes you will have to create to mitigate risks and what you will have to fund. It's a big job, but these will get you started:

1. What risks are defined in your agency's mission statement?

2. Of these risks, which are the highest priority to mitigate?

3. How are you defining these risks?

4. How are you measuring the levels of risk?

5. For each risk, what is the highest probability you're willing to accept?

6. Is each of your agency's programs designed to reduce the risks?

7. What are the benefits and costs in each program to reduce risk to an acceptable level of probability?

8. How will you measure how well a program reduces the risks?