Assessing Risks in R&D projects

All R&D projects face uncertainties and it is as well to face them at the start of a project and lay plans for dealing with them. Managers may simply want to keep an eye on some of them, but the more significant ones may merit a side project to pick off the risky bits early on, and to prepare a “Plan B” if things turn out badly. Making up a “Risk Register” at the beginning of an R&D project obviously makes a lot of sense.

However, risk assessment is not easy. There are some helpful tools like Failure Mode and Effect Analysis (FMEA), but it all relies on team members being able and willing to identify the risks. Technical experts are notoriously optimistic about their own work and nobody likes to be branded as a pessimist, especially in a team context.

An old but valuable paper by Keiser, Halman and Song describes a helpful process.

The two key elements are, first, that team members should be questioned separately by an outsider and their views presented to a meeting anonymously. This helps people to take the process seriously and overcomes the embarrassment of appearing to doubt somebody else’s capabilities.Risk management

Second, the investigator poses the questions in a reverse sense. Instead of being asked to comment on the risk that, say, “The power output will fall short of requirements” the questioner suggests: “the power output will be adequate”.

The authors suggest that people tend to react to a positive statement by thinking “Well, so they say, but I’m not so sure”, so reverse questioning tends to bring out concerns more readily.

Read the full paper:

From experience: applying the risk diagnosing methodology, Keizer, J. A., Halman, J. I. M. and Song, M., Journal of Product Innovation Management 2002

Recommended by and post by Rick Mitchell.