Managing risks in technological R&D projects with Probability-Impact AHPSort

Fostering technological innovation is essential for firms to survive in increasingly turbulent business ecosystems. Research and Development (R&D) projects are the lifeblood of technological innovations, but they typically face significant risks. The occurrence of risk hampers the proper development of R&D projects, which can have serious economic impacts on the firm. These impacts can be mitigated through proper risk management. According to ISO 31000, this requires analyzing both the impact and the probability of risk occurrence simultaneously. Existing methods in the literature do not address both simultaneously but rather focus on either the impact or the probability of occurrence. Moreover, these methods are not capable of sorting projects based on their level of exposure to risk, which would support managers in decision-making. With these gaps in mind, this study proposes a novel Probability-Impact method based on the adaptation of AHPSort. Its applicability is demonstrated through the risk assessment of five technological R&D projects developed by an engineering firm. The findings highlight that legal, user, external party, and technological risks significantly threaten technological R&D projects. Concrete management actions are provided to successfully mitigate these risks.