Marcel Melo 1.5 Assignment- Preparing for Uncertainty

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1 1.5 Assignment: Preparing for Uncertainty Marcel Melo Embry-Riddle Aeronautical University HROM 510 – Enterprise Risk Management Professor Chris Mandel October 26, 2022
2 Introduction In this paper we will discuss what the US Army does to prepare for uncertainty and how it might differ from LEGO's approach to uncertainty. There are certain aspects of LEGO’s approach that the US Army might implement to improve its risk management process. Finally, we will develop one example of uncertainty that the US Army should be thinking about for 2030 and apply the LEGO process to the development of our explanation.
3 Risk is inherent in everything that we do in the military and plays a big part in corporate strategy. The Army utilizes a risk management matrix for commanders and leaders to accept certain risks and pinpoint other types of risks that might be more hazardous. The Army’s approach to Enterprise Risk Management (ERM) is similar in theory to LEGO’s approach in the fact that they both focus on intelligent risk taking to avoid being to risk adverse and maintain proper discipline on the amount of accepted risk. In this paper we will discuss how the Army prepares for uncertainty, how the Army’s approach is different than LEGO’s approach, and what aspect of LEGO’s approach could be beneficial for the Army to adopt. Finally, we will attempt to theorize one example of uncertainty that the Army should be thinking about for the year 2030. The Army’s approach to uncertainty and risk varies by unit’s mission, objectives, and certain goals. The Army’s should prepare for uncertainty by fostering an open and transparent relationship with soldiers to communicate information or concerns about potential risks without consequences or fear of reprisal from supervisors. Each soldier should be responsible for safeguarding Army assets and leaders should be forward-thinking in order to make proper decisions to alleviate risk and identify opportunities for improvement. In certain instances, commanders and leaders could utilize ERM to take on more risk if they are forward-thinking enough to manage these risks by utilizing effective strategies. LEGGO’s approach to the implementation of business projects is extremely similar to the Army’s. The Army utilizes a risk matrix by first identifying hazards, accessing these hazards, developing controls & making risk decisions, implementing controls, and then supervising & evaluating before returning back to the first step of identifying the hazard. LEGGO created a similar supporting tool where they identify, assess, handle, reassess, follow up, and report. These
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4 two approaches provide a similar framework for both LEGGO and the Army. Because LEGGO is a for profit company they will typically utilize an objective-based ERM model while the Army is a government origination and utilizes a value-based enterprise risk management approach. LEGGO’s objective-based ERM approach help them to achieve an integrates view point for diversifying investment. The Army’s objective-based ERM lack a single dominant metric since there are a multitude of metrics that can effect the Army. The Army could benefit from LEGGO’s strategy to prepare for uncertainty since LEGGO looks at all the trends worldwide and tends to focus one particular strategy. One model that LEGGO utilizes is the PAPA model. This stands for Prepare, Act, Park, and Adapt. Leaders in the military could benefit from this strategy by focusing on the risks that currently matter and putting subsequent risks on the backburner while still maintaining a plan for those inherent risks if need be. This PAPA model would allow Army leaders to become more vigilant to changes in certain environments while managing opportunities which might present risk. This would allow the Army to be more risk adverse while simultaneously preparing for low probability risk which could potentially materialize rapidly. In conclusion, one uncertainty that the Army should be thinking about for the year 2030 is near peer threats and the uncertainty of political tactics. This uncertainty is problematic in preparing for this risk, however training and equipping soldiers should be top priority. This should allow for an emphasis on current and subsequent risk management. Leaders should focus on the tactics of these countries and continually train for secnarios based upon embedded risk management. In my opinion, this is a key task that the Army should prepare for by year 2030.
5 REFERENCES: Better managing the business of defense: Why dod needs to automate enterprise risk management . Federal News Network. (2020, August 18). Retrieved October 26, 2022, from https://federalnewsnetwork.com/federal-insights/2020/08/better-managing-the- business-of-defense-why-dod-needs-to-automate-enterprise-risk-management/ Fraser, J. R. S., Simkins, B., Narvaez, K., & Narvaez, K. L. (2014). Implementing enterprise risk management : Case studies and best practices . John Wiley & Sons, Incorporated. Segal, S. (2011). Corporate value of enterprise risk management : The next step in business management . John Wiley & Sons, Incorporated.

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