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Risk Management in the Development of Radically New Initiatives

Risk Management in the Development of Radically New Initiatives. Rich Westerfer. Background. 29 Years of Product Development experience Low volume, high complexity Cable TV headend products (GI/Motorola) High volume CPE devices (Motorola/WorldGate)

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Risk Management in the Development of Radically New Initiatives

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  1. Risk Management in the Development of Radically New Initiatives Rich Westerfer

  2. Background • 29 Years of Product Development experience • Low volume, high complexity Cable TV headend products (GI/Motorola) • High volume CPE devices (Motorola/WorldGate) • H/W, S/W, PMO, Mechanical, QA, Manufacturing, Customer Service, Service Provider • Education • BSEE - Drexel University • MBA courses - Fox School of Business, Temple University • Executive Master in Engineering Management – Wharton/Moore, University of Pennsylvania

  3. Product Examples • Advanced Analog Set-top (CFT2200) • 25 million units sold over 5 years • First box that was over 50% digital • First interactive set top • Pre-cursor to today's digital boxes

  4. Product Examples • Ojo Personal Video Phone • Won Best in Show at 2005 CES • Awarded Taiwan Technology Gold Metal • First affordable stand alone video phone

  5. What is Risk? • Risk = probability of a problem occurring times the losses per problem R(Φ,δ(x))= ∫L(Φ,δ(x) x ƒ(x|Φ)dx

  6. Radically new Initiatives usually include: • New technologies • Microprocessors/PC • Low power transmitters/cell phones • Flash memory/IPOD • New processes • Surface mount technology/cell phones • Digital transmission/HDTV • New business models • ITunes/IPOD • Service plans/cell phones

  7. Risk management process • Identify task that have high risk • Schedule uncertainty • Cost impact • Specification/quality issues • Determine possible mitigation strategies • Proactive strategies • Event driven strategies • Reactive strategies

  8. Proactive Strategies • Question and verify need for new technology, processes and business models • Test older technology to verify gaps • Prototype processes as well as product • Develop parallel approaches in new areas • Start task early • Started regulatory efforts on prototypes • Eliminate requirement uncertainty

  9. Event Driven Strategies • Identify events that could alter your direction • New regulations (RoHS adoption, FCC/UL) • New technologies (Digital, Wireless) • New competition (Satellite, PC’s) • Have alternate plans ready … • Making decisions under stress can lead to errors • Have team buy-in prior to direction change

  10. Reactive Strategies • Try to eliminate • When an unforeseen issue happens • Do not react quickly, set a time table… • Develop at least two possible solutions • Work to get buy-in before making direction change • Following a proven path

  11. Successful Risk Management • There is no silver bullet • Plan, plan and plan some more • Follow what works for you • Pay attention to the details

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