EROM Chapter 4, Part 2: Identification Templates and Risk Roll-Up
Book: Enterprise Risk and Opportunity Management: Concepts and Step-by-Step Examples for Pioneering Scientific and Technical Organizations
Author: Allan S. Benjamin
ISBN: 9781119288428
Sections 4.5 and 4.6 turn the JWST scenario list into working documents. This post covers the identification templates, leading indicator evaluation, and the roll-up machinery that produces cumulative risk and opportunity ratings. If Chapter 3 was the recipe, this is the kitchen.
Template 1: Risk and Opportunity Identification
Table 4.2 collects everything from section 4.4 into one grid. Columns include objective number, description, scenario type (risk, opportunity, or introduced risk), scenario number, scenario statement, leading indicator numbers, and indicator descriptions.
A few patterns stand out:
- Repeated entries in italics show the same scenario or indicator listed under multiple objectives. Scenario 6 (congressional funding pressure) appears under both strategic objectives E(>10) #1 and #2.
- Introduced risks ride alongside the servicing opportunity: loss of crew if astronauts do the retrofit, loss of mission if robotic, and unacceptable mission cost.
- Indicator sharing: complexity of design (indicators 10 and 11) links center facilities risk, launch risk, and strategic operational risk.
The template’s job is completeness and traceability. Every scenario ties to at least one indicator. Every indicator ties to at least one scenario. Nothing floats free.
Template 2: Leading Indicator Evaluation
Table 4.3 is the full indicator workbook. For each indicator you record:
- Watch and response trigger values (with rationale)
- Current value (with source)
- One-year projected value (often a range for uncertainty)
- Level of concern (green/yellow/red for risks; beige/violet/blue for opportunities)
Table 4.4 walks through objective P(1) #11 (deliver the cryocooler subsystem) in detail using GAO and project data:
| Indicator | Current status | Concern |
|---|---|---|
| Schedule reserve for cryo development | 0% of plan (was 5 months, now zero) | Red (intolerable) |
| Allocable cost reserve | 10% of plan | Yellow (marginal) |
| Unresolved technical issues (1-5 scale) | 3 (brazed compressor, valve vacuum test, vibration) | Yellow |
| GAO confidence in cryo progress (1-5) | 3 | Yellow |
The rationale column does real work. JPL’s subcontractor trend analysis projects at most a 7-month delay with integrated testing still starting February 2016. That optimism competes with GAO’s warning that every element slipped during the past year. The template forces both views on the record.
Trigger values come from historical correlation: 50% reserve margin triggers watch, 10% triggers response, for both cost and schedule where applicable.
Template 3: Objectives Interface and Influence
Before roll-up, you need to know which objectives feed which. Table 4.5 maps influencing objectives to influenced objectives with a basis for influence.
Primary chains are straightforward: cryocooler technical support (C) must complete before cryocooler delivery (P), which must complete before launch (P), which must complete before telescope operation (P), which supports strategic discovery (E).
Secondary interfaces (marked with asterisks) capture softer links: program success on JWST promotes public interest and supports workforce objectives; analyst cadre maintenance supports optimal science gain from telescope data.
Without this table, roll-up becomes guesswork about what daughter objective risk should propagate upward.
Rolling up known risk: two methods
Section 4.6.2 offers two roll-up paths:
Alternative 1 (via scenarios): indicators → scenario concern → objective aggregate, incorporating influencing objective risk along the way.
Alternative 2 (direct): indicators → objective aggregate directly, treating indicators as de facto scenario surrogates. Scenario-level concern can be derived afterward.
Benjamin’s JWST example uses alternative 2 for the cryocooler case. Figure 4.12 shows indicators 1-4 plus the aggregate risk from supporting objective C(1) #12 feeding into P(1) #11.
The Known Risk Roll-Up Template (Table 4.6) lists, per objective bottom-up:
- Each feeding indicator or influencing objective
- Composite indicator assignment (if any)
- Concern level per input
- Aggregate risk of the objective
- Roll-up rationale (the most important column)
The cryocooler roll-up result
Despite a red schedule reserve indicator, aggregate risk for delivering the cryocooler is yellow (marginal) because:
- Schedule can be accelerated by diverting budget and personnel from tasks whose reserves are not at risk (divertible cost reserve is yellow, not red).
- JPL trend analysis projects no more than 7 months delay, keeping integrated testing on track for February 2016.
Table 4.7 documents this judgment explicitly. Table 4.8 shows how alternative 1 would look with an intermediate roll-up to scenario level first. Same final color, different audit trail.
This is a lesson in not letting single red indicators auto-escalate without context. The template requires you to write down why yellow is the right call.
Opportunity roll-up
Table 4.9 handles the single strategic opportunity: retrofit an improved IR camera via grapple arm, using SLS/Orion readiness as opportunity indicators and P(LOC), P(LOM), and rendezvous cost as introduced risk indicators.
Table 4.10’s roll-up lands at violet (marginal opportunity) even though rendezvous cost is red today. Rationale: public enthusiasm will likely surge post-launch (Hubble precedent), SLS/Orion maturity will ease feasibility doubts, and economic recovery may loosen funding constraints. The opportunity is real but not yet actionable at full scale.
Composite indicators
Section 4.6.4 addresses indicator interdependence. Schedule margin needed depends on divertible cost margin and unresolved technical issue severity. Rather than explain this only in rationale prose, you can define a composite function.
Benjamin’s example:
CInd(A) = -4 × Ind(1) - 4 × Ind(2) + Ind(3) + 7
where Ind(1) is remaining schedule fraction, Ind(2) is allocable cost fraction, and Ind(3) is technical issue severity (1-5). Watch peg point: 50% schedule, 50% cost, severity 2 → trigger 5.0. Response peg point: 10%, 10%, severity 3 → trigger 9.2.
Current composite value: 9.6 (yellow/marginal). One-year projection: 4.8 to 8.8. Table 4.12 shows the roll-up with composite indicator A replacing three separate reds/yellows with one yellow input. Final objective color unchanged, but the story is cleaner.
UU risk roll-up
Table 4.13 applies the same roll-up steps to UU-specific indicators. For JWST, the two postulated UU indicators are schedule/budget pressure and quality of oversight/communication, each scored 1-5 per objective. These roll up parallel to known risk so leadership sees both tracks.
The next post covers driver identification, mitigation and control templates, enterprise-wide template propagation, and using the same forms for portfolio planning before programs are approved.
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