Shipulski On Design

Technical risk – Will it work?

Market risk – Will they buy it?

Emotional risk – Will people laugh at your crazy idea?

Technical risk – Test it in the lab.

Market risk – Test it with the customer.

Emotional risk – Try it with a friend.

Technical risk – Define the right test.

Market risk – Define the right customer.

Emotional risk – Define the right friend.

Technical risk – Define the minimum acceptable performance criteria.

Market risk – Define the minimum acceptable response from the customer.

Emotional risk – Define the minimum acceptable criticism from your friend.

Technical risk – Can you manufacture it?

Market risk – Can you sell it?

Emotional risk – Can you act on your crazy idea?

Technical risk – How sure are you that you can manufacture it?

Market risk – How sure are you that you can sell it?

Emotional risk – How sure are you that you can act on your crazy idea?

Technical risk – When the VP says it can’t be manufactured, what do you do?

Market risk – When the VP says it can’t be sold, what do you do?

Emotional risk – When the VP says your idea is too crazy, what do you do?

Technical risk – When you knew the technical risk was too high, what did you do?

Market risk – When you knew the market risk was too high, what did you do?

Emotional risk – When you knew someone’s emotional risk was going to be too high, what did you do?

Technical risk – Can you teach others to reduce technical risk? How about increasing it?

Market risk – Can you teach others to reduce technical risk? How about increasing it?

Emotional risk – Can you teach others to reduce emotional risk? How about increasing it?

Technical risk – What does it look like when technical risk is too low? And the consequences?

Market risk – What does it look like when technical risk is too low? And the consequences?

Emotional risk – What does it look like when emotional risk is too low? And the consequences?

We are most aware of technical risk and spend most of our time trying to reduce it.  We have the mindset and toolset to reduce it.  We know how to do it.  But we were not taught to recognize when technical risk is too low.  And if we do recognize it’s too low, we don’t know how to articulate the negative consequences. With all this said, market risk is far more dangerous.

We’re unfamiliar with the toolset and mindset to reduce market risk. Where we can change the design, run the test, and reduce technical risk, market risk is not like that.  It’s difficult to understand what drives the customers’ buying decision and it’s difficult to directly (and quickly) change their buying decision. In short, it’s difficult to know what to change so they make a different buying decision.  And if they don’t buy, you don’t sell. And that’s a big problem.  With that said, emotional risk is far more debilitating.

When a culture creates high emotional risk, people keep their best ideas to themselves. They don’t want to be laughed at or ridiculed, so their best ideas don’t see the light of day. The result is a collection of wonderful ideas known only to the underground Trust Network. A culture that creates high emotional risk has insufficient technical and market risk because everyone is afraid of the consequences of doing something new and different.  The result – the company with high emotional risk follows the same old script and does what it did last time.  And this works well, right up until it doesn’t.

Here’s a three-pronged approach that may help.

1. Continue to reduce technical risk.
2. Learn to reduce market risk early in a project.
3. And behave in a way that reduces emotional risk so you’ll have the opportunity to reduce technical and market risk.

Image credit — Shan Sheehan

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