Frank Hoffman
Risk is an enduring reality in strategic decision making. The rigorous assessment of risk is—or should be—a critical step in strategy development. There is always risk in any strategy thanks to the unrelenting reality of uncertainty in human affairs.1 Yet it is often a weak link in U.S. strategy formulation and decisionmaking. Thus, this article is focused on the role of strategic risk, how we define risk and operationalize it, and how senior leaders employ risk analysis to improve strategic performance.
The thesis for this article is simple: strategic risk is not well understood, and risk analysis should be a routine and continuous part of the strategy-formulation process. The central research question is How well do senior-level national security decision makers incorporate risk as an element in strategic decisions, and, if needed what risk management steps could improve strategic effectiveness?
The article is organized into three parts. The background section covers the literature and joint doctrine, including a discussion about the definition of risk. The second section summarizes a few brief cases from recent experiences in the campaigns in Iraq and Afghanistan. The final section offers recommendations to advance risk-management practices in the national security community. This effort builds on insights by numerous practitioners who considered this topic in pioneering studies.2 One contributor concluded that the understanding of this issue has been too often “ill-defined and misleading” and urges greater effort in understanding the issue of risk at the highest levels to improve effective strategy.
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