Understanding Enterprise Risk across an Aquisition Portfolio: a Grounded Theory Approach

Every acquisition program contains risks. But what impact do these risks have on the entire portfolio of acquisition activities? What does risk at the Enterprise level really mean? For example, risk collectively could portend great danger to the acquisition manager’s overall portfolio which might be otherwise masked by traditional program performance and analysis. Alternatively, these risks also might represent opportunities to achieve greater results when analyzed from a portfolio perspective. Initial review of the literature suggests that most leaders are unable to articulate the risk carried by their portfolio of product development activities or what this means to them. However, the same literature suggests they strongly desire this capability. Beginning with a review of the applicable literature in the areas of risk, product development (acquisition) and product portfolio management, portfolio-level risk applications are found to be sparse and ill-conceived. Initial analysis of interviews with portfolio leaders involving military product development activities in portfolios of large, complex, system development will be presented with a discussion of the implications of enterprise risk for product portfolio management. This research is being directed under the auspices of the Lean Advancement Initiative (LAI) and the Massachusetts Institute of Technology (MIT). The views expressed in this work are those of the author and do not reflect the official policy or position of the United States Air Force, the Department of Defense (DoD), or the U.S. Government. Motivation DoD programs have been having problems because they “do not capture the requisite knowledge when needed to efficiently and effectively manage program risks” according to the US Government Accountability Office (GAO) [1]. Not only has Risk been