Throughout his distinguished career, Michael Harrington has worked to elevate the importance of risk management in the ever-evolving aerospace sector. As vice president of risk management and assistant secretary at Lockheed Martin, the standard for risk excellence was already sky high. He joined the global security and aerospace company in 2017 and was assigned to lead the digitization of its risk management program. More than 114,000 worldwide employees would be impacted by this upgrade, as well as many other end-users--some of whom are expected to one day participate in interstellar travel.
Knowingly or not, his career in risk, law and the U.S. Army had prepared Harrington for such a monumental undertaking. This dynamic work, as well as his community engagement and leadership among peers in related sectors, earned him the honor of 2021 KIMS Risk Manager of the Year.
With a market capitalization of nearly $100 billion and annual revenue exceeding $60 billion (reported in 2019), Lockheed Martin is the world's largest defense contracting business. The company produces a wide array of products ranging from F-35 and F-16 fighter jets and helicopters to the Orion crewed space program, which is designed to take astronauts to Mars. Harrington leads a risk management department of eight from Lockheed Martin's corporate headquarters in Bethesda, Maryland. Their responsibilities include identifying, quantifying and managing all of the company's enterprise-wide risks, evaluating emerging and accelerating risks, and providing support to Lockheed Martin's four business units: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems and Space.
"Lockheed Martin has always had world-class risk management and the technology of its day," Harrington said. "My goal was to bring its former, more manual processes into the 21st century. This is work that ultimately reaches every area of the company and it is very gratifying to know that my team's efforts made such a positive impact. I also feel honored that it highlights the importance of a risk management department in any area of business."
Harrington knew that an overhaul of Lockheed Martin's decades-long program would not happen instantly, and that it would also require his team to redirect their efforts. "To start, we had to get out of the traditional insurance-based mindset," he said. "There's risk in everything but there's a strategic way of refocusing without getting overwhelmed."
Harrington drafted a new risk management blueprint that focused on the areas of people, processes, programs and technologies. Furthermore, each major business area gained its own dedicated, full-time risk manager to provide guidance and liaise with leadership teams.
"Each risk member attends their area's quarterly financial reviews to better engage in emerging or new risks associated with the business," he said. "By transitioning to this approach, the risk management team is now involved with projects on the front end rather than dealing in crisis management at the back end."
The digitization process had to complement this new people-first approach...