Managing Project Risk

GUY MERRITT,
Group Program Manager
TELLABS

A risk has several components that are essential to understand if you hope to mitigate the risk effectively. A model of a risk highlights these components and helps you to visualize how they are related. Specifically, the model helps you to assess how serious a risk is and, indeed, if it truly warrants the attention of the product development team. Components of the model are then essential to planning effective mitigation actions. This case study will show how to apply the risk model to a specific project. Learn to:

• Separate the risk event from its consequences
• Identify drivers (root causes) of the risk
• Assign qualitative probabilities objectively
• Agree on the consequences of a risk
• Make the tough choices on which risks to manage with limited resources
• Create effective risk action plans, including contingency plans (if the risk still occurs despite your prevention plans)

David B. Roggenkamp,
Business Planning Specialist,
Product Development Operations,
FORD MOTOR COMPANY

In this session you will hear from Ford Motor Company's Product Development Operations group and/or Lincoln Mercury Quality and Process group about experiences in using System Dynamics modeling to mitigate program execution risk. They will discuss how a system dynamics model has been used on more than 30 different vehicle programs across Jaguar, Ford Europe, Ford North America and Lincoln/Mercury to:

1. identify potential outcomes (quality, cost, staffing, timing and more) from program change decisions
2. identify specific actions a team can take to improve outcome performance and/or reduce the uncertainty of outcomes
3. identify systemic problems and potential solutions that impact multiple programs

Managing Market Risk

Paul Falkenstein,
Worldwide Director
Strategic Business Marketing
BECTON DICKINSON

The ultimate success of the product development efforts can be clearly defined by the ability to match customer needs with the core competencies within an organization balanced with market and regulatory risks. There are pivotal points during the product development life cycle where marketing and R&D must have aligned objectives with customer needs, market readiness, and sales force ability. A gap in any stage of this process will lead to a less than optimal product launch. This is especially important when dealing with government agencies’ demands on the market.

The ability to sense the market environment and maintain competitive advantage is a skill that needs to be equally strong in both the Marketing and R&D organizations. When the seamless integration of these two functions occur, the rapid introduction of value-added products will assure increased profitability and market share. This talk will break down the R&D and Marketing functions and examine how Becton Dickinson has aligned its strategic abilities to exist in a dynamic market environment frequently faced with regulatory demands.

Deirdra Dougherty, Ph.D.
Manager, Market Analysis
DADE BEHRING

In this session, you will find out how Dade Behring reduces risk by methodically identifying and validating customer needs, and by focusing product development teams on building to customer needs. Quantitative information from multiple product development projects will be presented.

Deirdra Dougherty will discuss:

1. Why Dade Behring implemented the Customer Centered Product Development (CCPD) process
2. How Dade Behring incorporated customer needs assessment into its established product development process
3. How to reduce risk by determining the relative importance of customer needs
4. Strategies to maintain customer focus during the product development process
5. How quantitative concept testing helps to reduce risk

Managing the Risks of
New Technology and Innovation

Alex Kawczak
Director of Technology
ASHLAND SPECIALTY CHEMICAL COMPANY

A review of risk management practices will be presented within the context of new product innovation and new business innovation. Alex Kawczak will cover how various factors and decisions during the planning stages of the "front-end of innovation" influence evolving project risk in the final stages of product development and commercialization.

Balancing Big Bang and
Incremental Evolution Projects:
Managing the Risks of Leading-Edge Scientific R&D

Ken Delcol
Director, Product Development
MDS SCIEX

The presentation will look at the practical application of risk management in a new product development environment of advanced analytical equipment. First Ken will discuss the changes in the new product development approach used at MDS SCIEX, i.e. creating a balance between Big Bang projects and Incremental Evolution projects. Then the organizational impact, risk profile and company financial performance will be covered.

The risk management approach used at MDS SCIEX illustrates how leading edge scientific research development is managed when theoretical calculations are not available for decision making. The presentation includes examples from MDS SCIEX development projects, including different risk management strategies such as:

• Transferring risk to vendors
• Parallel development
• Concentrating on core competencies
• Concentrating development risks into small group of subsystems

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Controlling Technical Risk

Keith E. Schleiffer
Product Development Manager
BATTELLE HEALTHCARE PRODUCTS

This session will cover Battelle's experience with technical risk, including risk management steps that can be effective for many organizations -- identify and acknowledge risks and track their status continuously; assure cross-functional inputs influence decisions involving these risks; and make conscious and systematic choices about risk

Specifically Keith Schleiffer will discuss two types of examples and how Battelle handles them:

1. When a technology breakthrough does not take place as planned, leading to a crisis event.
2. When a known technical risk is carried along throughout the project, i.e. a chronic risk item.

He will also discuss tools that can be put in place fairly easily to help manage risk, including tracking tools, tools that help identify risk issues, and (since technologists can easily lose track of financial and business goals), tools to maintain a business context for technical decisions.

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BONUS!

Conference participants receive:

A FREE copy of Proactive Risk Management: Controlling Uncertainty in Product Development, the new book by Preston Smith and Guy Merritt! [Sample Chapter]

- PLUS -

Complimenatry one-year subscription to the MIT Sloan Management Review