A new product development is like a chain, in that any one of the links could cause failure of the whole. It might be the cost, reliability, timing, positioning, channel, user perception, safety, performance, regulatory compliance or any one of a host of requirements. So, if you are developing an innovative new product, how can you manage for success?
Practiced developers of complex or multidisciplinary products focus on managing the gaps, the weak or missing links, recognising that the more routine aspects will look after themselves. One such method is based on project risk management. Anything that could render the project unsuccessful is identified as a risk the most significant are actively managed until the launch and beyond.
By applying a standardised scoring methodology, it is possible to benchmark new developments with previous successful (and unsuccessful) ones, making go/no go decisions more informed. This graph shows the risk signature for several innovative product developments.
Red bars represent the number of potential show-stoppers, which must be mitigated. Yellow bars show the moderate risks that need to be monitored and green risks are generally dealt with automatically by competent teams.
Projects A and D are normal complex development projects with a successful outcome. B1 and B2 represent the same project before and after a risk reduction phase. The project was scrapped after B2, because the risks could not be reduced to manageable levels. C1 and C2 represent a project where the risk reduction work was successful. Project E was stopped immediately.
An understanding of the risk profile of a multidisciplinary product development project facilitates better go/no go decisions and improved resource prioritisation. In turn these lead to improved R&D investment efficiency.