The results in this report are from an online survey that was fielded from April 19 to May 9, 2021. A total of 363 global respondents completed the survey. Key demographic variables are included below.
Ineffective risk management practices can delay or even derail product development, and according to the research, 1 in 3 companies that treat risk management as a “checkbox” activity report delays due to faulty risk management. (The ratio is a little more than 1 in 4 across all companies.)
Those disruptions can cause delays of up to a year or more, but the average is 5 months. If we assume a burn rate of $400,000 per month, which would be reasonable for a medical device startup with VC funding, the cost of incomplete risk management practices would be $2 million on average, and some would spend well in excess of that number on delays.
In addition to the financial penalties, there are also human risks related to employee stress levels and well-being. Of those surveyed, 42% say they worry about issues related to product risk outside of their work days, and well over 1 in 4 (29%) say it has a moderate or serious impact on their quality of life.
Siloed data, says Sebastian Liedtke of Roche Diabetes Care, can be a challenging artifact of outdated organizational structures, particularly among medtech companies. Liedtke explained to McKinsey, “Historically, many medtechs have been technology-centric rather than user-centric. As a result, they are structured in tech silos: mechanical, electrical, software, and so on. Each of these silos has optimized its own individual part rather than addressing the entire patient journey.”
Risk management is a challenging discipline because when it’s done well, it’s largely invisible (and according to some survey respondents, unappreciated). As one survey-taker explained, the hardest part of creating dynamic, effective feedback loops is “getting organizational attention.” Another admitted, “My company has not embraced a quality culture. Silos exist and interfere in the closed-loop feedback structure from product development, production, and post-market surveillance. There are only two people in the company that understand this (me being one of them). The worry is that something will fall through the cracks and blame will be assigned to an individual, versus the culture or the system.”