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)– 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

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

Product Examples

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

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

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

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

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

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

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

Successful Risk Management

• There is no silver bullet

• Plan, plan and plan some more

• Follow what works for you

• Pay attention to the details