The question whether to “buy” or “make” is a perennial one that plagues us from the most mundane everyday life choices to very complex business decisions. Should I mow my own lawn or hire a landscaper? Should my company develop technology in-house or outsource? Unlike personal preferences, in business, everything boils down to risk management and cost. The wrong choice places company bottom line, competitiveness, and eventually careers in jeopardy.
“There are ‘known knowns’. There are ‘known unknowns’. But there are also ‘unknown unknowns’.” – Donald Rumsfeld (Feb 12, 2002)
Often product companies like to focus on technical risks. However, to take a proactive role in risk management, we must pull back to see the broader picture. Robert Cooper had investigated the causes of success and failure in new products for 25 years and found that most products fail to be commercially successful due to market risks, and not technical risks. Engineers tend to think more narrowly of just technical risk. It is management’s job to keep the perspective broad.
Click here to read more ...