Flawed decision models and flexibility in product development

Abstract

In this article we answer a fundamental concern of product development management: How to best respond to uncertainty, unforeseeable uncertainty, and complexity in product development? To answer this question we apply reliability analysis, from behavioral economics, to product development and build a new model, showing that successful frameworks, practices, tools, and decision-making succeed by reducing the impact of decision errors. Our model contributes seven practical principles for managing action flexibility in product development. By applying these principles, product development managers can successfully exploit many existing practices, improve decision-making effectiveness, and leverage action flexibility.