Module 7: Innovation Finance & Metrics
Risk Identification
Why should you use this method?
- Identify possible risks of your project by looking at it from different angles
- Understand which types of projects need strong risk management and which ones don't
What is your type of innovation project?
- Radical breakthrough innovation types: no compared product or service at hand or in the market
- Next generation of your product: developing a new generation of the same product, e.g., cars, phones, etc.
- Addition to the family: changing features to the same product
- Add ons and enhancements: adding extra features to existing products
What type of risks could you have?
- The market risks: Did you pick the right market? Do you know enough about the market? Is the market changing faster than you think? Is the competition already in the market and ramping up?
- Technical risks: Are you using new technology for your innovation project that you have never used in your company so far, or where you as a team don't have enough experience?
- Timing: Is the timing right towards the market and the customer? How much time is your company giving you to work on that specific innovation project?
- Cost: Is the cost of the innovation project worth the effort?
- Price: Is the price of the product competitive in the market?
- Quality: Does the final product reach the desired quality of the product or service?
The following table indicates which types of risks will be likely within your type of innovation project:
How can you apply this method?
1. Identify the type of innovation project
From the overview above, identify the type of your innovation project.
2. Identify the likelihood of each risk type
Using the table above, identify which risks are likely to be severe for your project.
3. Brainstorm project risks
Go through the different risk types one after another and take a few minutes to note down all risks you can think of. Include everything that comes to your mind; you will eliminate the less relevant ones later during the evaluation process. Spend extra time on the high-risk types, according to the table above.
4. Number the risks
Give different numbers for every risk for easy identification. This will help during the risk evaluation in the next step.
What’s up next?
Evaluate your risks and mitigate the relevant ones by either working on the cause or the effect by risk-handling.
Materials Needed:
Pen, Paper/ Table template