We met with a company a year ago that developed products that were going in the direction of the buggy whip (within a few years the technology that the company was using was going to be obsolete and government regulations would eventually ban the product in the marketplace). The company not only needed to fix their current new product development process, but they were in dire need of expanding their product categories.
The Vice President of New Product Development (NPD) recognized the need for assistance in fixing and developing new product categories. However, he was afraid of the consequences of having a firm improve the current situation. “I’m afraid that if we have a new process and categories, and if they don’t work, I’ll be fired.”
Wow, I was a bit taken back…
My initial thought was, “how about your company? If you don’t expand into other product categories your business will, in essence, close down.” He was being risk averse, and he didn’t want to rock the boat with the President of the company.
Six months later he lost his job.
The lesson here is that being risk averse certainly didn’t help the VP of NPD. Ultimately, he didn’t keep the best interest of the company in mind. Perhaps if he attempted to improve the new product development process and introduce product categories, he would still be an employee today. Now, he is frantically trying to find another position.
I believe these are important steps in assessing risks that may affect your company:
1. Determine what is best for your company. This can be done by doing your homework and strategically assessing important market forces that may affect your organization.
2. Put together a well thought out strategy that you can present to your senior management team and work with them in developing a contingency plan.
3. Take action, and plan appropriately for the future. Draw-up a detailed product and technology roadmap that will ensure that your company products aren’t obsolete in the next five years.
Remember, it is not about you…it is about your company and keeping it financially viable for years to come. Instead of sitting back and doing nothing…Take action and make a difference!