Stage-Gate® models: the good and bad ones
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A Stage-Gate® model shall convert
ideas into lucrative business ventures.
But it doesn´t always work that way. |
1) Natural laws of product development
Not all Stage-Gate® models work
Over the past twenty years, I've seen hundreds of development models designed by companies based on how they perceive Stage-Gate®. I've often been impressed by their fine efforts. All the decisive principles of success have been carefully incorporated, which is evident in their business results. Unfortunately, however, I've seen even more processes that are far from perfect. Some are ineffective at best. Others can actually cause significant damage, which is unfortunate seeing that the creators of the process were proud to have made what they thought was a perfect Stage-Gate model.
Certain natural laws must be observed
Natural laws are principles that help us to understand how the world works. Valid principles will yield the same results each time you apply them. The law of gravity is an example of a natural law or principle. You never have to think about where your feet will go when you get out of bed in the morning.
There are also natural laws or principles of success that yield top results in product development. The principles are more complex and less obvious than the law of gravity, however. But the results are quite noticeable. Our research shows that 56% of an average company's new products will be commercially successful. The best-performing 20% of all companies that optimise their application of the principles of success have a success rate of 78%.
So what are the natural laws or principles of success?
The connection between results and methods is outlined in Dr Cooper´s internationally recognised research and converted into practical well-documented principles. This enables us to specify the procedures that will speed up and result in successful product development. Our research shows that top-performing companies apply these procedures methods or principles of success to a far greater extent. The principles include:
 developing products with unique benefits for the user;
maintaining strong market-orientation throughout the development process;
carrying out thorough groundwork before the development phase begins;
precisely defining the product early in the project;
making tough go/kill decisions during the development process;
ensuring sufficient resources for projects in progress; and
giving project managers and cross-organisational development teams sufficient authority and empowerment.
Have you incorporated the principles of success into your development process?
A correctly designed Stage-Gate® model describes precisely what you should do to ensure that the principles of success are applied in each development project. There are two decisive questions that need to be answered:
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What procedures and requirements are incorporated into your formal process to ensure that the critical success principles are followed? |
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What steps have you taken to implement the decisive task of altering the behaviour and work patterns of management and employees? Even the best tool is worthless if used incorrectly. |
2) A typical five-stage model
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Idea |
Preliminary
investigation |
Business case |
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Develop-ment |
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Test and validation |
Production and
full launch |
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Idea screen
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Preliminary approval
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Project approval |
Review of
development result
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Product release
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Review of business results
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3) Can your company generate better results?
Perhaps your company already has a formal development process that resembles the drawing above. The question is, can it be improved? If you can't reply YES to the following six statements, you should overhaul your process.
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We stay on schedule in the vast majority of our projects. |
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About 80% of our new products are commercially successful. |
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We systematically measure our new-product business results. |
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The number of projects currently in progress is always in tune with the resources earmarked for them. We don't run more projects at a time than we can handle effectively. |
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We do thorough groundwork before starting a project to avoid having to repeatedly modify the project specifications late in the process. |
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The product definition (i.e. product benefits, positioning, characteristics and requirements) is always determined directly on the basis of a thorough market survey. In other words a market survey based on contacts with users or customers. |
We can give your development process a professional overhaul
A high-quality product development process can increase a company's success rate by 10 to 30% and reduce the time from idea to market by 30%. This will actually increase company profits by millions, frequently by just as many millions as the company's annual development budget.
4) Suggestions for how to move ahead
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