Innovation in terms of radically new products has always been difficult as it is nearly impossible to implement a product development process that encourages radical innovation. In nearly 30 years of product development experience, I have seen a significant number of both successful and failed products. When I prioritize the reasons that product development fails, the major factor is the failure to manage risk. Not managing risk areas of product development leads to increased product cost, poor quality and delayed schedules -- the three deadly sins. Any one of these can cause a product to fail, and unfortunately they usually travel in pairs. You often see schedule delays caused by increased cost, poor quality caused by product cost constraints, and schedule constraints leading to poor quality.
Based upon my experiences, I will discuss some special challenges of managing risk in radically new products. The key attributes that make the product innovative -- such as the incorporation of new technologies, new processes and new business models -- are often intrinsically laden with risk, and these risks are the first that need to be mitigated. It is critical to identify the potential risk areas and develop options to mitigate risk if those scenarios develop. Since there are often no substitutes for these key attributes, managing risk requires a different focus. Especially when working on radically new products, I have found an effective way to manage risk is to spend more time than usual refining the requirements. Since many of the high risk areas are critical to ensure innovation, managers should focus more on the minor details in an effort to eliminate many of the minor risks that develop during the development phase. Another effective tool is to spend more time on the test and quality plans. This allows the team to be fully prepared when the product moves from development to test. There really is no magic to managing innovation -- the key is attention to and focus on the right details!
Richard Westerfer is the founder and President of R&R Consulting, a company specializing in the field of New Product Development, Program Management and transitioning into Manufacturing. The company was launched in December of 2007 and has several major partners in the telecommunications field.
Prior to going out on his own, Rich was COO at WorldGate Communications where he led the development and manufacturing of the Ojo VideoPhone. The Ojo VideoPhone was launched in May of 2006 and won the Best in Show award at the 2007 Consumer Electronics Show. He joined WorldGate in February 2000 as Vice President of Engineering where he helped to launch the company's Interactive TV platform, which was later acquired by Comcast.
Before joining WorldGate, Rich served in various roles at General Instrument (now a part of Motorola, Inc.) from 1979 to February 2000. When he left General Instrument in 2000 he was the Senior Director of Engineering for the Advanced Networks Group and was responsible for all development of the advanced set top platform that sold over 22 million units to the cable industry.