Preston Smith's Corner

What is the connection between flexible product development and project risk management?

September 2007 Quick Tip

Our new book, Flexible Product Development will appear next week, so it is appropriate to ask: How does it differ from our last book, Proactive Risk Management?

Proactive Risk Management is a mainstream approach for managing the risk in a project. It is appropriate – and the best way of proceeding – when there is little change during a project, as it is a methodical process that identifies risks, understands them, then generates plans to mitigate them.

Unfortunately, product development, especially of more innovative — thus coveted — products, seldom proceeds sequentially without change. When change during development becomes the norm rather than the exception, mainstream risk management approaches are unresponsive and even wasteful.

Consequently, risk management for a flexible project takes on a fundamentally different character. Rather than being an identifiable process within the entire project management process, as it is for a well-run mainstream project, it becomes intrinsic to running the project.

By intrinsic, I mean that everything you do to execute the project is done to control the project’s risk. You proceed with short iterations to control the risk in what you are doing, and you check in with customers often to control customer risk. You run experiments continuously to ensure that you are on the right track and to develop options in case of change. You delay decisions to deal with the risk of locking into a poor choice when things might change.

In short, instead of being an identifiable process, project risk management becomes a way of life.

Quick Tip Index

Is the CEO important to flexible product development?

July 2007

A recent research report “Managing the Future: CEO Attention and Innovation Outcomes” finds that “forward-thinking CEOs are the main drivers of successful innovation” in their companies. So, specifically, how do CEOs figure in flexible development? One key ingredient of adopting flexibility is the significant changes in organizational values and behavior required. Thus, the question becomes: is the CEO a key factor in organizational change?

When writing my forthcoming book, Flexible Product Development, several months ago, I polled 35 product development experts regarding their experiences with organizational change. The one consistent response was that the CEO had to lead the transition for it to be successful. While desirable, this creates two problems. First, the person wishing to initiate change is unlikely to be the CEO, and second, my discussions with CEOs clarify for me that they, working alone, lack the time, connections, credibility, and skills needed to implement change. As Mary Lynn Manns and Linda Rising explain, “It is not top-down or bottom-up, but participative at all levels.”

Consequently, I created a multifaceted approach to organizational change. It includes the top-down approach of John Kotter as a framework, the bottom-up tools of Manns and Rising to execute the details, and the transitions perspective of William Bridges to knit the pieces together effectively. See the bottom of our Resources page for more on their books.

Better yet, order Flexible Product Development and read Chapter 10.

In short, the CEO must be on board (eventually), but don’t depend on this executive to lead the effort.

(c) Copyright 2013 Preston G. Smith. All Rights Reserved.

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