Top management support is a necessary ingredient for product innovation.
Top management’s main role is to set the stagefor product innovation, to be a
“behind-the-scenes” facilitator, and much less an actor, front and center.
Senior management must make the long-term commitment to product de- velopment as a source of growth; it must develop a vision, objectives, and strat- egy for product innovation. It must make available the necessary resources to product development and ensure that they are not diverted to more immediate needs in times of shortage. Management must commit to a disciplined game plan to drive products to market.
Most important, senior management must be engaged in the new product process, reviewing projects, making timely and firm go/kill decisions, and if
“go,” making resource commitments to project teams. Management must em- power project teams and support committed champions by acting as mentors, facilitators, “godfathers,” or sponsors of project leaders and teams.
Building These Success Factors In
These and other success factors and best practices have been uncovered in countless studies of successful projects, project teams, and businesses. The analogy is one of observing winning football teams (versus the losers), watching successful touchdown marches, and then trying to uncover what made for suc- cess. After these success factors are identified, the coach then sits down with the team and starts to map out plays and a game plan or playbook.That’s ex- actly what happens here: Management should take these success factors and build them into the new product process or methodology. The next section dis- cusses how the process works and how these success factors should be built in.
WHAT THE STAGE-GATE™ PROCESS OR PLAYBOOK LOOKS LIK E
The Stages
The Stage-Gate process breaks the new product project into discrete and iden- tifiable stages, typically four, five, or six stages, as in Exhibit 11.1. These stages are the plays—where players execute prescribed actions. Each stage is de- signed to gather information and undertake tasks needed to progress the proj- ect to the next gate or decision point. Some key points:
• Each stage is cross-functional. There is no “R&D stage” or “marketing stage”; rather, every stage is marketing, R&D, production, engineering, and so on.
• Each stage consists of a set of parallel activities undertaken by people from different functional areas in the firm—that is, tasks within a stage are done concurrently and in parallel, much like a team of football or rugby players executing a play.
• The activities in a stage are designed to gather critical information and reduce the project’s unknowns and uncertainties. Each stage costs more than the preceding one: The process is an incremental commitment one.
But with each step increase in project cost, the unknowns and uncertain- ties are driven down, so that risk is effectively managed.
The f low of the typical Stage-Gate process is shown in Exhibit 11.1. The stages are:
Discovery:Prework designed to uncover opportunities and generate NPD ideas.
Scoping:A quick, preliminary investigation and scoping of the project—
largely desk research.
Build the business case:A much more detailed investigation involving pri- mary research—both market and technical—leading to a business case, including product and project definition, project justification, and a proj- ect plan.
Development: The actual detailed design and development of the new product and the design of the operations or production process.
Testing and validation:Tests or trials in the marketplace, lab, and plant to verify and validate the proposed new product and its marketing and pro- duction/operations.
Launch:Commercialization—beginning of full operations or production, marketing, and selling.
There is one additional stage: strategy formulation,an essential activity.
This strategy formulation stage is omitted from the Exhibit 11.1 f low diagram, not because it is unimportant, but because it is macro and all encompassing in nature—strategically oriented as opposed to process or tactics. Thus, strategy formulation is best superimposed over (or atop) the model in Exhibit 11.1; it is a prerequisite to an effective Stage-Gate process.
The Gates
Preceding each stage is a gate or a go/kill decision point. The gates are the scrumsor huddleson the rugby or football field. They are the points during the game where the team converges and where all new information is brought to- gether. Gates serve as quality-control checkpoints, as go/kill and prioritization decision points, and as points where the path forward for the next play or stage of the project is decided.
The structure of each gate is similar. Gates consist of:
1. A set of required deliverables—what the project leader and team must bring to the decision point (e.g., the results of a set of completed activi- ties). These deliverables are visible, are based on a standard menu for each gate, and are decided at the output of the previous gate. Manage- ment’s expectations for project teams are thus made very clear.
Deliverables Criteria Outputs
Gates have a common format:
2. Criteria against which the project is judged. These can include “must meet” or knock-out questions (a checklist) designed to weed out misfit projects quickly. For example:
• Does the proposed project fit our business’s strategy?
• Does it meet our environmental, health, and safety (EH&S) policies?
There are also “should meet” criteria or desirable factors which are scored and added (a point count system) and which are used to prioritize projects. For example:
• The strength of the value proposition or product’s competitive advantage.
• Ability to leverage core competencies.
• Relative market attractiveness.
• Size of the financial return versus the risk.
3. Defined outputs, for example, a decision (go/kill/hold /recycle), an ap- proved action plan for the next stage (complete with people required, money and person-days committed, and an agreed time line), a list of de- liverables, and date for the next gate.
Gates are usually tended by senior managers from different functions, who own the resources required by the project leader and team for the next stage. They are called the gatekeepersand are a predefined group for each of the five gates. For example, for larger projects, Gates 3, 4, and 5 are often staffed by the leadership team of the business—the head of the business and the heads of marketing/sales, technology, operations, and finance.
A WALK THROUGH THE STAGE-GATE™ PROCESS
The following sections describe the Stage-Gate™ process on a high level—an overview of what’s involved at each stage and gate. This is shown stage by stage in Exhibit 11.1.
Begin Stage: Discover y
Ideas are the feedstock or trigger to the process, and they make or break the process. Do not expect a superb new product process to overcome a deficiency in good new product ideas. The need for great ideas, coupled with a high attri- tion rate of ideas, means that the idea generation stage is pivotal: You need great ideas and many of them.
Many companies consider ideation so important that they handle this as a formal stage in the process, often called discovery. They build in a defined, proactive idea generation and capture system.Activities in the discovery stage include:
• Undertaking directed but fundamental technical research, seeking new technological possibilities.15
• Working with lead users (innovative customers) to uncover unarticulated needs.16
• Using creativity methods (such as brainstorming).
• Strategic planning exercises to uncover disruptions in the marketplace leading to identification of gaps and significant opportunities.17
• Idea suggestion schemes to encourage ordinary employees to submit new product ideas.
A good summary of many ideation methods is provided in Cooper’s Win- ning at New Products.18