Managing Risk in a Research and Development Environment

INTRODUCTION The U.S. Government is substantially increasing investments in energy related research and development (R&D) as part of a multi-pronged effort to restructure the nation’s energy infrastructure. This broad-based effort will include R&D on many new energy technologies as well as conventional nuclear power and coal technologies. The Government’s approach involves strategic engagement of industrial partners, who will actually deliver the developed innovations to the market place. R&D organizations can help ensure maximum returns on the Government’s investments by effectively managing the technical and operational risks associated with these R&D programs. The Pacific Northwest National Laboratory (PNNL), which is operated for the U.S. Department of Energy (DOE) by Battelle Memorial Institute, conducts contract R&D for government and industrial customers, supporting their missions and business objectives. In response to its contract with DOE, PNNL developed and implemented a comprehensive approach for managing the technical and operational risks associated with its diverse R&D portfolio. In this approach, we characterized the nature of risks to our customers, institution, staff, and public, and then defined a multi-element approach for mitigating the risks as an integral part of our R&D environment. The R&D environment has been characterized has having a great deal of complexity andmore » uncertainty requiring a strong managerial focus [1]. At PNNL, we consider the R&D project as our primary unit of business, where our success is closely linked to our ability to efficiently and effectively manage projects and deliver science- and technology-based solutions to our customers. From this broad topic of R&D risk management, we have focused this paper on the methods, organizational and management system framework, and tools that we use to effectively manage the operational, contractual and quality risks associated with our R&D portfolio.« less