The Power of Negative Thinking
How to Turn Murphy’s Law in Your Favor to Manage Risks in Product Development
Say you have been given a major assignment, one where your career hangs in the balance or where the future of your organization is at stake. What if you could predict the significant things that could go wrong[1] with your new assignment? ― and be able to prevent them or, at least, be able to manage them so they do not disrupt your objectives. This would put you in a proactive position rather than reacting to unanticipated trouble.
Many of us are faced with deploying or implementing major initiatives for our organizations. Whether it is developing a new product platform, introducing a major new product, or making a new strategic move, these events can carry sizeable risk to both your career and perhaps the future of your company.
The scientific community has been successfully dealing with the issue of risk reduction and mitigation for some time. Over the years, engineers and scientists have developed tools and methods to help them cope with unanticipated “failures.” They have learned successful ways to anticipate what may go wrong in order to prevent it. From risk analyses to FMEA (Failure Model and Effect Analysis) to Design of Experiments, these methods, when well understood and carefully applied, have proven to work (See appendix “B” for a glossary of risk).
Let’s take an example from science. Launching a new satellite into orbit is a major scientific challenge, to say the least. Engineers and scientists use methods to identify, predict, and mitigate those things that can negate the launch and that are likely to happen. Please note the two criteria: first, things that can negate and second, things that are most likely to happen. This second step is critical because the things that can happen are innumerable, but those that are likely to happen are fewer and thus more manageable.
Let’s apply Risk Management to projects in the business world. For example, merger and acquisitions are occurring with increasing frequency, and say you have been assigned the task of executing an acquisition. If you could predict those things that might ruin the project, prioritize them based on “likelihood,” and take steps to prevent them before they even occur, this would greatly improve your chances of success. Or, say you’ve been assigned to purchase and deploy a new CAD software application. Using the methodology, you could list in priority, before you even get started, those things that might interfere to the point of causing a “failure,” i.e., having to spend considerable money or ending up with no deployment. You would list and prioritize issues such as no acceptance by employees, lack of proper training, disruption of service, etc., and then plan how to address them, well in advance of their occurrence.
Now what if you could apply Risk Management methods to your project in a fraction of the time that scientists take and in a friendly and interactive way and without “all that math”? What if you could actually predict those few significant issues that could become the proverbial “career-limiting” ones and take steps to prevent them? Your rate of success would go up, as would your level of confidence.
Looking at “things that can go wrong” is not a trip into discouraging optimism, but rather a chance to tap into a group’s wisdom so as not to repeat the mistakes of the past and anticipate future ones. A wise person once said, “Experience is the best teacher, but the tuition is lower if you are willing to learn from your mistakes.”
Why do companies fail to manage risk?
Our experience shows that most product development professionals are aware of the issue of risks; furthermore, they are also aware of the need to do it, yet they fail to even start. The causes are many, but more salient are the urgency attached to product development, where teams fail to do risk management because they believe there is not time, not enough “bandwidth”. Another reason is the lack of tenacity or proactive risk management, where there is a single meeting to identify risk and then no more is mentioned for the duration of the project, naturally this latter instance yields little benefit consequently the perception of risk management is a negative one; nothing could be farther from the truth, risk management is a powerful weapon to reduce time-to-market, improve customer satisfaction, and improve the probability of business success.
Engineering organizations tend to do FMEA (Failure Mode and Effects Analysis) which is a proven and valuable risk management tool, except that FMEA is generally only applied to the product, and only within the engineering organization. Risk in product development can happen anywhere, from pricing of the new product, to service and repair, to project risks. Risk management must go well beyond the components of the new product; a holistic approach will save time, and considerably improve the probability of introducing a winning product.
[1] Anything that could go wrong with your project is loosely defined as a “risk” or a potential failure. See appendix “B” for a glossary of risk.
Tags: FMEA, managing risk, product develoopment, product development, risk management
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