Beyond Risk

www.projectmanagement-academy.com Copyright © The Strategic Project Leadership® Group, 2011
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BEYOND RISK:
The Innovation Challenge
Prof. Ajay B Parasrampuria
Copyright Warning:
Please note this presentation is a copyright
of i2m and it contains key conceptual
approaches used by i2m for its client
engagements. Please do not copy and or
reproduce any of the slides without written
permissions of Ajay B Parasrampuria.

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Acknowledgements
Diamond Model and Strategic Project Leadership ® (SPL) framework and
methodologies has been developed and is copyright of
Dr. Aaron J Shenhar
Professor of Project and Program Management - Rutgers Business School
Founder and Global CEO – The SPL Group
Until 2008 he was Institute Professor of Management and the founder of the
project management program at Stevens Institute of Technology. He holds five
academic degrees in engineering and management from Stanford University and
the Technion in Israel.
He was the first recipient of the PMI® Research Achievement Award, and
the IEEE Engineering Manager of the Year Award.
Prior to his academic career, Dr. Shenhar accumulated 18 years of technical and
management experience
SPL Global Customer Companies include:
Intel | Dow Jones &Co.| NASA | NSA |ISO | Merck, Johnson & Johnson| Microsoft |BG
Group|3M | Honeywell | AT&T | BMG Entertainment | Becton Dickinson| Compaq Computer |
Trane | US Army
PM Academy is the strategic partner of SPL Group and is authorized to provide
SPL education, certification and services in India and Asia Pacific.

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Major Innovation Programs continue
to Fail?
 Risk Management is not working
 Failure is always in assessing the difficulty
involved in the new, “innovative” part of the
project
 We need a new framework to analyze and control
the innovative part – the difficulty
But literature says – “a project is a project is a
project”

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PM : The 3 Processes
When are you
shooting what?
Mr. Analyst | Mr. Manager | Mr. Designer
• Requirement Process
• Managerial Process
• Design Process

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Reducing Requirements and
Design Uncertainty
Project Start
Levels Determined by
Novelty, Technology,
And Other Uncertainties
Uncertainty of
Technical Specs and Design
Ideal World
Real World
Requirements
Freeze
Specifications and Design
Freeze
Uncertainty of Requirements
Project Completion

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The Questions
 How to build plans based on uncertainties?
 How to manage different project types
differently?
 How to distinguish among projects –
dimensions?
 How to classify projects on each dimension?

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Project Types
Pace
Array System Assembly Component
Complexit
y
Novelty
Technology
Derivative Platform New to Market New to World
Super-High
Tech
High-Tech
Medium-Tech
Low-Tech
Regular
Fast/
Competitive
Time-Critical
Blitz
Later design freeze
More design
cycles
Less market data
Later requirement
freeze
Autonomy
Time
control
Complex
organization
Formality

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Array System Assembly Com
Complexit
y
Novelty
Technology
Pace
Derivative Platform NTM NTW
Super-High Tech
High-Tech
Medium-Tech
Low-Tech
Regular
Fast/
Competitive
Time-Critical
Blitz
Required style
Actual style
The Segway Project

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Risk Assessment

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Novelty Impact on PM
Product
Novelty Level
Derivative (Dr)
An extension or
improvement of an
existing product
Platform (Pl)
A new generation in
an existing product
family
New-to-the-
Market (NTM)
New-to-the-
World (NTW)
Data on Market Accurate market data
exists.
Need extensive market
research.
Careful analysis of previous
generations, competitors,
and market trends.
Data from previous
market may be
inappropriate
Non-reliable market
data.
Market needs not clear.
No experience with
similar products.
Customer-base not
defined.
Product Definition Clear understanding of
required cost, features,
functionality, etc. One
cycle.
Invest extensively in
product definition.
Involve potential customers
in process. Two cycles
Define product to fit
new market; high
uncertainty; three or
more cycles.
Product definition
based on intuition, trial
& error.
Fast prototyping is
necessary to obtain
market feedback.
Many cycles in product
definition.
Timing of Product
Requirements
Freeze
Early freeze of product
requirements, usually
before or immediately after
project launch.
Freeze requirements later,
usually at mid project.
Need initial try in
market before freeze;
be ready to change.
Very late freeze of
requirements; often
after completion of
prototype market
feedback.
Marketing Emphasize product
advantage in comparison to
previous model.
Focus on existing, as well
as gaining new customers,
based on added product
features and varieties.
Create product image.
Emphasize product
advantages.
Differentiate from
competitors.
Use examples from
previous market, with
emphasis on new
opportunities in new
market. Extensive
effort often needed to
create the industry
standard.
Creating customer
attention through new
innovative marketing.
Educating customers
about potential
product. Sometimes
give away for free or
under cost.
Articulate hidden
customer needs. Work
on standard.

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“New to the World” Products
 Markets that don’t exist cannot be analyzed
 Business plans are typically wrong
 Define a range of outcomes and keep updating
 Flexible product development
 Fast prototyping, obtain market feedback ASAP
 Accept many changes, Freeze requirements late
 Strive for market share, not financial goals
 Invest aggressively in marketing
 If no market share after 4-6 years, pull out

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A: 1
B: 1-2
C: 2-3
D: N+3
D
C
B
A
Project Scheduled
Completion
Project
Initiation
Resources
Time
Planned
Resources
Possible time
Ranges for
design freeze
Risk AreasPossible time ranges for design freeze, number of design cycles,
and risk areas for project outcomes
Legend:
A- Low-Tech
B- Medium-Tech
C- High-Tech
D- Super High-Tech
B: 1-2 – Number of
Design Cycles
N – No. of cycles
required to choose
the final
technologies
The Impact of Technology on
Risk and Design

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Potential riskExpected benefitDimension
Having difficulty predicting exact
market needs; missing sales targets;
attracting competitors to copy your
ideas
Exploiting new market
opportunities; leapfrogging
competition; gaining first
mover advantage
Novelty
Experiencing technology failure;
lacking needed skills
Improving performance and
functionalityTechnology
Having difficulty in coordinating and
integrating
Bigger programs, bigger
payoffsComplexity
Missing deadlines; making
haphazard mistakes
Gaining early market
introduction, mounting
quick responsePace
Benefits and Risks of High NTCP Levels

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So We
Change the Question
Instead of asking,
“What Can Go Wrong?”
We should ask,
“How Long Will it Take to Get it Right?”
“What is the Challenge?”

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Instead of Risk Management
“Challenge Management”

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Challenge Management Technique
Dimension Level New Challenge What to Do
Novelty
Technology
Complexity
Pace
Other

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Managing Project Dynamics
 Plans Built According to Uncertainty
 Revise Your Plans and Use Cycles
 Freezing Points and Number of Cycles
Depend on Uncertainty
Adapt your PM Style

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ajay@pmacademy.in
Thank You
Hope I have made you THINK!!

Beyond Risk

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