Risk management has been widely used in project management and investment analysis. It is based on identifying undesirable events and assessing their probabilities and costs. Yet, in many innovation projects the problem isn't really "what can go wrong," but what is the uncertainty involved, and more importantly, how to understand, measure, and reduce it by the time the project is completed. Currently, there are no methodical techniques to control a project's uncertainty. For example, recent painful delays in large aerospace programs such as Airbus' A380 or Boeing's 787, have demonstrated that even experienced companies may face serious problems with their innovation initiatives.
Based on our research we offer a framework to combine the assessment of risk, uncertainty, and complexity in new initiatives, and control the time it would take to resolve them. Instead of asking, "what can go wrong?", companies should start asking "how long will it take to get it right"? Adopting such a framework may reduce the risks in innovation and improve the rate of project success.
Aaron J. Shenhar
Aaron Shenhar is the Institute Professor of Management and the founder of the project management program at Stevens Institute of Technology. He holds five academic degrees in engineering and management from Stanford University and the Technion in Israel. He was the first recipient of the Project Management Institute Research Achievement Award, as well as the IEEE Engineering Manager of the Year Award.
Dr. Shenhar accumulated over 20 years of technical and management experience at Rafael, a leading organization in the defense industry in Israel. In his academic career, he is focused on teaching, research and consulting in project management, innovation management, and the leadership of professional workers in technology-based organization. He is a consultant to many leading high-technology organizations such as 3M, NASA, Honeywell, Dow Jones, and the US Army. He is co-author of the book, Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation, 2007 Harvard Business School Press. The book was selected among the top five business books of 2007.