Stage-Gate Project Management Model

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" . 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 . 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 cycles getting shorter, the competition getting tougher and users becoming more demanding, companies that do not innovate are losing pace in the market and slowly deteriorating. As said, innovation is a key driver for achieving long-term success and profitability. However, it must be kept in mind that gaining a competitive advantage by offering a new product/service is not easy - in fact, it is estimated that about 46% of the funds, which the company invests in the development and launch of new products/services is related to unsuccessful projects . Therefore the point here relies on discovering the key success drivers and how to achieve them.

Proven success drivers

Successful companies share some common features when it comes to innovation and internal processes. In this section five success factors will be exposed in order to understand how to take a new product to the market.

• Customer-driven focus: The goal is to deliver new products that are differentiated, solve major customer problems, and offer compelling value propositions to the customer. Customer focus innovation drives success rates that are twice as high in the marketplace and have a much higher productivity rate (4.5 times).

• Upfront activities: Activities such as preliminary market assessment and research, exploring the technological risks, looking at operations issues and financial assessment are critical for determining success before entering the development phase.

• Tough Go/kill decision points: Decision points throughout the process where management and project teams can come together to review the current situation and the project´s resource needs are decisive to avoid having too many projects with not enough resources that make the production pipeline move slowly. Blocking the early launching of the product decreases success rates.

• Truly cross-functional teams: Innovation projects are complex and require input from different parts of the organization. Teams need to work in a spiral method of development-build, test, feedback, and revise-putting as management will impact both time-to-market and project success rates.

• Top management involvement: The leadership is responsible to set and communicate the innovation strategy and direction, allocate the funds and provide guidance.

All in all, we observe that the foundations for innovation are based on the management of the project. Moreover, 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 .

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

As mentioned before, the main key to successfully launch a new product is the management of the project. 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 .

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

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

Implementation key factors

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

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.