Tenet #3: Focus on the risk
In this blog I will talk about risk, and how a focus on risk will drive a project faster and through reducing risk, be able to allow for greater innovation. By necessity, I will also talk about some of the methods of reducing risk. Aspects of this discussion apply also to the previous tenet, “Tenet #2: Think in sprints”.
There are two types of risk of which all participants on a project must be aware: Market risk and implementation risk.
- Market Risk: A market (or market segment) is the collection of customers to whom you are targeting the new offering. Market risk in summary is the risk associated with market acceptance of the new product. Your view of the risk may be seen in your uncertainty of the projected unit sales forecast or the price you will be able to charge.
Implementation Risk: This is the risk that your implementation of the project necessary for the product offering will not go according to plan. It includes technology risk, logistic risk and other areas potentially impacting the successful completion of the project.
All New Product Development (NPD) projects contain some level of both of these risks. And both must be actively managed for faster projects. Figure 3-1 shows six major ways to manage risk.
Figure 3-1: Six ways to manage project risk.
To expound on Figure 3-1, for faster projects it is important for managers to:
- Maintain a Risk List. Have a list of both market and implementation risks, monitored, re-visited and updated constantly, with risk abatement plans for high-risk items as necessary. Have trigger conditions to implement risk abatement plans.
- Invest in Risk in Advance. Manage the biggest risks off-line. This investment takes considerable proactive planning and dedication to the goal. As an example, many companies take the most risky technology development off of the critical path of any projects on the roadmap and manage it separately, folding in discoveries into later projects. Often about 5% of R/D resources are dedicated to this technology development effort away from the current roadmap.
- Pull Forward Risk. Identify the largest risks in a project and pull them up as close to the front of the project as possible. Focus a great deal of the team’s attention on resolving these risks, or at least identify those worthy of parallel efforts or other risk abatement methods.
- Highlight Critical Path. Keep the critical path highlighted for the team. The critical path is that linked chain of tasks that determines the minimum time to ship a new product. Make sure this path is clear, and is the focus of the team. Also watch closely those tasks that have a high probability of being on the critical path should something go wrong.
- Drive Rapid Prototyping. Think in small batches of information. Don’t try to solve all project risk problems at once. Rather break the problems down small enough that learning loops are small and fast. Learn quickly. Learn early. Make corrections as you go. In order to accomplish this rapid learning in hardware, you will need to create tools for rapid prototyping. In order to allow or rapid learning. It is critical that appropriate tools are provided to quickly build-out and test ideas. Rapid prototyping is important in software as well, but has found the biggest barriers in hardware. Providing the right tools for rapid hardware prototyping can make the difference between getting your answers in 1 day or in 3 months.
- Postpone Decisions. Postpone decisions until you must make them, and then make them quickly. Notice the critical words “until you must” and “make them quickly”. This postponement is not the same as delaying a decision because you have problems making decisions (as I have witnessed in too many organizations). This principle, properly applied, is clearly seen in agile software development with the concept of having an agile product definition. Unnecessary risk are often created during a project due to a product definition that is frozen too early. Conversely, some of the implementation risks that require large resources to resolve may disappear with greater understanding or a product definition shift during the project. If you can wait, then wait. If you can’t wait, then pull up the risk as far to the front of the project as you can, and then hit the risk hard with small information batch learning as discussed above.
It is appropriate to spend a little more time on the last item, creating tools for rapid hardware prototyping, since this can be of such significant value in reducing project risk and speeding up the development process.
In the distant past, when circuit board designers used thru-hole components, it was common to use what was often called a “waffle board” to breadboard up an idea. This waffle board had holes in which to place the component leads, and conductors hidden in the board to make connections along certain rows or columns. It was a fairly simple matter to take your design and schematic and build up a working prototype using a well-stocked R/D lab stock of common components. It was easy to test your idea within hours. See Figure 3-2.
Figure 3-2: Bread boarding the old way, with thru-hole components
Today, with surface mount components, ball grid arrays, the demand for 24 layer printed circuit boards and the like, this type of prototyping is no longer possible. But it is possible to test out many ideas quickly by providing certain tools. Here is a sampling of tools you might consider to speed up your hardware development:
- Mechanical engineering
- 3D printers – For rapid prototyping of mechanical engineering designs, an in-house 3D printer will provide significant flexibility and speed. While these prototypes are usually not structurally sufficient for the end product due to the limited materials, they can shave a lot of time off of a project timeline and allow for greater innovation through simple demonstration of ideas and concepts.
- Open work orders – It is amazing how much time can be saved by simply making it easy to spend money with an external vendor providing rapidly machined prototypes. Identify high quality and very fast vendors and make sure your designers know the value of rapid prototyping.
- Electronic Engineering
- PC Board milling machines – These can be purchased for 2 sided PC board milling using standard input files, including hold drilling, solder paste dispensing and plated through-holes. Various resolutions are available in the low single digit mils. See Figure 3-3 below.
- Cheap and easy PC layout tools – Large software tools are fine for professional, full-time PC layout specialists, but for non-specialist engineer a more lightweight tool will provide for quick and easy layout to try out an idea quickly.
- Open work orders – As with mechanical engineering, in-house solutions may not always accomplish the need. A PC milling machine may be able to do a 2 sided board, but if you need more layers you need to talk to an external vendor. You can usually get 1-5 day turn-around today for an 8 layer board. Again, set up open work orders to make it easy to generate a raw board, often in just a few days.
- Manual pick and place station – You may be able to get your raw board in a few hours (from your internal milling machine) or a few days (from your preferred rapid PC prototype vendor) but the board still needs to be populated with surface mount components. With the proper equipment and a little training, this assembly can be done by either design engineers or a dedicated technician hired for rapid prototyping.
- Lab stock with surface mount components – It is essential to provide a separate lab stock area for your development teams, stocked with common parts and unique and critical parts from approved vendors.
- Table-top solder reflow and via cure oven – Once your raw board is loaded with surface mount components, one of a number of available table-top reflow ovens can be used to solder the parts to the board; and in short order, the board is ready for testing.
Figure 3-3: Bread board today, using a PC board milling machine. This machine takes standard files, has 0.8 µm resolution, and can achieve traces and spacing as small as 4 mil and drill holes as small as 6 mil. You can have this in your hands in a few hours.
Without the tools described above, the electronic engineer may work in a process similar to this. Does this sound familiar to you?
- Extensive modeling (perhaps a month). This level of modeling is made necessary because of the long delay to answers, and the need to get it right the first time.
- Layout of a full board (such as a controller board) through the PC design shared services area (perhaps another month).
- Creating a prototype of this board (another month). This may be generated from an outside vendor, or often it will come through the in-house manufacturing processes.
- Testing of the board (another month). This is a large board, so time and care need to be taken to “turn on” each section of the board, taking careful measurements along the way. Otherwise the whole board may be damaged and the reasons for the failure may be lost or hard to identify.
- Prepare for and make revisions.
The cycle of design to results might be 3-4 months. For most industries, this duration is far too long for today’s needs. The problem must be broken down into blocks (where the risk is within the block rather than in the interfaces) and rapid prototyping of these blocks are required. Many board turns and iterations of the design are necessary on these highest risk blocks, and rapid prototyping tools such as those above are necessary to achieve the optimum speed out of your product development organization.
To summarize, in order to move faster, you must keep a careful eye on project risks. These are of two types, market and implementation. The biggest risks should be taken off-line, away from the critical path of any given projects. Others should be pulled up as close to the beginning of the project as practical, and examined carefully with small information batch discovery and rapid learning loops. Provide tools for rapid prototyping and keep the critical path highlighted for the team.
In my next blog,” Tenet #4: Reduce the portfolio”, I will describe how you can speed up your innovation engine by paying careful attention to your product development flow.