Stage-Gate Project Management Model

Revision as of 17:13, 16 February 2023

Developed by Carla Canovas Iglesias

Facing increased competition at the pace of technological change makes launching new products key for differentiation in current companies. Even so, products continue to fail in the development phase, a fact that highlights the flaws in project management and the problems that companies address when adopting innovation. Therefore, it is crystal clear that using a well-established management methodology is a must for the success of a project. Dr. Robert G. Cooper recognized that product innovation is a process and by observing bold new products being driven to market, he developed the Stage-Gate model in 1986 and documented it in his book "Winning at New Products" ^[1]. The Stage-Gate model applies traditional methodologies to the innovation process in order to successfully conceive, develop and launch a new product. It consists in dividing the project into different phases separated by gates that are review and key decision-making points, as they allow the team to evaluate the current situation, align the expectations and decide whether or not to proceed to the following stage ^[2]. This new approach helps companies to have a visual roadmap of all the developing tasks, to minimize risks while innovating, and to adapt to environmental changes while satisfying the expectations of the project and the stakeholders. This article will cover what is the Stage-Gate methodology about, how to apply it in practice, what benefits it adds to the product development process, the limitations that are needed to be aware of, and finally, how to take a more efficient approach by taking the model to next stage combining it with other current systems.

The innovation need

Nowadays the intensely competitive environment makes innovation no longer an optional path but the only possibility of differentiation. With product life cycle getting shorter, the competition getting tougher and users becoming more demanding, companies that do not innovate are losing pace in the market and slowly deterioring.

As said, innovation is a key driver for achieving long-term success and profitability. However, it must be kept in mind that gaining competitive advantage by offering new product/service is not easy - in fact, it is estimated that about 46% of the funds, which company invests in the development and launch of new products/services is related to unsuccessful projects

=7 critical success drivers

- A unique superior product—a differentiated product that delivers unique benefits and a compelling value proposition to the customer or user— - Building in the voice of the customer—a market-driven and customerfocused new-product process—is critical to success. - Doing the homework and front-end loading the project is key to success. Initial screening: the first decision to get into the project (the idea screen), • Preliminary market assessment—the first and quick market study to assess market size and likely product acceptance and sales, • Preliminary technical assessment—a technical appraisal of the project, looking at technology risks and the likely technical route, • Preliminary operations assessment—looking at source-of-supply, manufacturing, and operations issues, • The detailed market study, market research, and VoC research (described above), • Concept testing—testing the product concept with the customer or user to ensure customer liking and purchase intent (also described above), • Value assessment—determining the value or economic worth of the product to the customer, • The business and financial analysis just before the decision to “Go to Development” (building the business case). Due diligence done before product Development gets under way pays off!

- Getting sharp and early product and project definition—and avoiding scope creep and unstable specs—means higher success rates and faster to market. - Spiral development—build, test, get feedback, and revise—putting something in front of the customer early and often gets the product right.

- A well-conceived, properly executed launch is central to new-product success. And a solid marketing plan is at the heart of the launch.

- Speed counts! There are many good ways to accelerate development projects, but not at the expense of quality of execution.

An important part of success relies on mangement

How to achieve innovation?: The Stage-Gate model approach

Stage-Gate® is a conceptual and operational map for moving new-product projects from idea to launch and beyond—a blueprint for managing the newproduct development process to improve effectiveness and efficiency

Benefits of the model

Based on various independent studies, which were conducted by leading consulting companies in the field of innovation management, it was concluded that 70-85% of the leading companies in the U.S. use model Stage-Gate for managing the entire process from idea generation to launching of new product/service to market

Plenty of research in this topic reveals that the main problem does not lie in the invention part or the generation of innovative ideas, but more in the successful management of the innovation process from an idea to a successful product in the market (du Preez, Louw, 2008)

Stage-Gate® is a conceptual and operational map for moving new-product projects from idea to launch and beyond—a blueprint for managing the newproduct development process to improve effectiveness and efficiency

It is characterized by a structure that engages users at

all levels and functions, and consequently allows making good and effective decisions regarding further project extension, and impacts on quality and speed of innovation project execution.

The current Stage-Gate is a third-generation process, which incorporates six Fs (Cooper, 1994):  Flexibility,  Fuzzy,  Fluidity, 1701  Focus,  Facilitation,  Forever green. innovate.

Application

Model approach

Implementation key factors

provide guidance on how to use the tool, concept or theory and when it is applicable

When to apply it

Limitations of the model

What´s next?

Innovative approach: Combination with Agile methods open stage-gate model

Annotated bibliography

• Cooper, R.G. (1990). Stage-Gate Systems: A New Tool for Managing New Products

The article focuses on the need for better new product management in order to achieve innovation success and provides an overview of the Stage-Gate model as a solution to the challenge. The paper also gives evidence to prove the efficiency of the methodology and its advantages presenting several studies applied to firms using the Stage-Gate strategy. Some of the interesting conclusions that reflect the impact of performance that the model provides are quality focus on the activities, stronger market orientation, parallel processing, better project evaluations, and a visual road map. All in all, this article emphasizes the relevant steps in the Stage-Gate model and how its implementation leads to the market success of new products.

• Cooper, R.G (2014). What´s Next? After Stage-Gate

The article exposes a new approach emerging of idea-to-launch processes to make Stage-Gate a better and faster model. It suggests combining different systems in order to take the model to the next step: the integration of Adaptation, Agile, and Acceleration. The paper exposes the next-generation model which incorporates an iterative development to get a minimum viable product earlier to the client using agile methodology within the framework of Stage-Gate, focusing on the acceleration of the whole process. All in all, the future approach for development methodologies is exposed as a way of showing the importance of continuous improvement in order to launch products faster to the market.

References

1. ↑ Cooper, R.G. (1986). Winning at new products: Creating value through innovation. Addison Wesley
2. ↑ Cooper, R.G. (1990). Stage-Gate Systems: A New Tool for Managing New Products