Quality Progress - May 2013 - (Page 42)

InnovatIon ImPeratIve BY Peter Merrill risk and Development Managing risk during new product development I wrote my first Innovation Impera- In this month’s column, I am going to Some of the primary areas in which we tive column for QP in January 2012,1 and move beyond identifying the nature of the need data (which, by the way, likely will my practice has always been to take the risks we must address and look at how we not be crisp) are as follows: issue’s theme and address it from an in- manage those risks. 1. The time needed to develop a working solution. At this stage, we are only at novation perspective. The January 2012 issue’s theme was Fail early concept. risk. I discussed how risk enters the in- My first key point is one you have prob- novation process. I explained how risk is ably heard before—fail early. The innova- internal and external, and how organiza- tion process has two phases: creative and tions have become extremely risk averse execution. The budget for the creative as we have increased our understanding of phase is typically only 20% of the total risk. However, there is evidence that the cost of getting a new offering to market. more radical or innovative our new offer- Clearly, the more we can weed out the ing, the more profitable the outcome. But, weak offerings in the creative phase, the the more radical the offering, the greater better the outcome. the risk attached to it. In short, innovation is a risky business. The creative phase has two steps: 1. Identifying the opportunity. 2. Connecting the conceptual solution. Focusing on the second step, physicist Linus 2. The probability of being able to produce a working solution. 3. The cost to produce a working solution. 4. How radical is the new solution compared to current solution? 5. How easily can this solution be copied by the competition? 6. Do we have in-house competencies to produce the solution? 7. Who are the new suppliers we will need, and what is the risk attached to those suppliers? 8. What are the delivery chain choices and the attendant risk? Pauling said the best way 9. What price will the market bear? to get a good idea is to get 10. The likely return on investment (ROI) lots of ideas. To gener- of the new product or service. ate lots of ideas—and Those of you who live in the R&D especially to generate world will be familiar with the necessary radical ideas—we must al- data for developing a new product. Much low these two steps in the of this data will have wide tolerances at- creative phase to operate tached, but that does not excuse us from in a loose or free mode. collecting the data. It can often be helpful At that stage, in fact, we to provide support for data collection to avoid even thinking about the folks working on the proof of concept risk. if data collection is not their strength. But after we have Another issue to be aware of is the in- generated our potential solutions, we do need to This can happen so easily and is difficult address risk. To do that, to detect. Somebody sees a wild idea and we need data. Unfortu- says to themselves: “Oh, I’ll kill that right nately, creative folks do away,” meaning, the person will use data not always enjoy data to reject the idea. And yet, that wild idea collection, but it is vital to may be the perfect solution to the op- manage risks. 42 QP • www.qualityprogress.com troduction of bias into the data collection. portunity we are addressing. Us engineers http://www.qualityprogress.com

Table of Contents for the Digital Edition of Quality Progress - May 2013

Up Front
LogOn
Expert Answers
Keeping Current
Mr. Pareto Head
Balancing Act
Avoiding an Avalanche
What Makes You Tick?
Mood Righting
Innovation Imperative
Quality in the First Person
Standards Outlook
Statistics Roundtable
Special Section: ASQ Enterprise and Site Members
3.4 per Million
Career Corner
Career Corner
QP Toolbox
QP Toolbox
QP Reviews
QP Reviews
One Good Idea
One Good Idea

Quality Progress - May 2013

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