From experience: applying the risk diagnosing methodology

Abstract

No risk, no reward. Companies must take risks to launch new products speedily and successfully. The ability to diagnose and manage risks is increasingly considered of vital importance in high-risk innovation. This article presents the Risk Diagnosing Methodology (RDM), which aims to identify and evaluate technological, organizational and business risks in product innovation. RDM was initiated, developed and tested within a division of Philips Electronics, a multinational company in the audio, video and lighting industry. On the basis of the results the senior Vice President (R&D) of Philips Lighting decided to include the method in the company’s standard innovation procedures. Since then, RDM has been applied on product innovation projects in areas as diverse as automobile tires, ship propellers, printing equipment, landing gear systems and fast-moving consumer goods such as shampoo, margarine and detergents.\nIn this article we will describe how Unilever, one of the world’s leading companies in fast-moving consumer goods, adopted RDM after a major project failure in the midnineties. At Unilever, RDM proved very useful in diagnosing project risks, promoting creative solutions for diagnosed risks and strengthening team ownership of the project as a whole. Our results also show that RDM outcomes can be used to build a knowledge base of potential risks in product innovation projects.

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