A Voice Crying in the Wilderness

The most difficult part of improving the innovation process is convincing the senior management of the need.

They will readily agree that having a new product pipeline is critical to success. They will also agree that a Stage-Gate process is most beneficial. In fact, I suspect most if not all senior managers would quickly agree that supporting NPD efforts is vital and worthy of their attention.

Sadly, experience has taught me that regardless of how much senior managers want to improve the NPD process, they fail to execute at the right level. By this I mean that they fail to make it their own priority. It is certainly true is this context that if you want a job done right you should do it yourself.

Innovation cannot be delegated to an individual or department. Neither can it be copied from other successful companies. Developing an NPD process is a process itself, and that process must begin at the top. The first step in developing an NPD process is to find a champion within the organization who is willing to do whatever it takes. It is too easy for senior managers to pay a consultant to teach NPD best practices, but it is impossible to establish lasting corporate change without an internal champion. This is precisely where the process begins to fail. Low-level managers, project managers, and designers typically first understand the need and have the desire to reinvent the NPD process (and join the PDMA), but they lack the visibility and voice to make their concerns known to the senior managers (who have never heard of PDMA) capable of making decisions. How hard would it be in your organization for a machine designer to have a little 1-on-1 with the CEO and tell him about the need to change NPD practices? How likely would the CEO be to make tough realignment and resource decisions based on this “low-level” advice?

Think about the next management level down from the CEO. Are they willing to sacrifice many of their own resources, much of their power, even their own jobs for the sake of improved product development? Of course not. Successful NPD processes may require significant corporate restructuring and pain for many managers. Who will force them to endure it?

So as it is, the lower-level employees see the obvious need for reinvented NPD processes, and they endure the agony of using ineffective processes. Meanwhile the CEO sees the decline of market share and fewer new products being released, and goes to the middle managers for a solution. Finally the middle managers seek to improve their own processes to the exclusion of others. The result is the failure to make sweeping, lasting, effective change. The senior-most managers must be willing to dive deep into their organization for ideas and input, and be ready for the response regardless of the source.

Innovation Didn't Work For Us

I have encountered many companies who have a phase-gate or stage-gate process documented in their official procedures, but seldom use the process effectively. Most often I hear "We implemented stage-gate back in the 90's and tried to make it work for several years, but now we just fill in the blanks to make the auditors happy". What's wrong? Is it the process? Maybe unrealistic expectations? Are there environments in which a formal NPD process just won't work?

The answer to these questions is, as usual, "it depends". The process may be assembled incorrectly. Senior management may have expected a two-day NPD seminar for a key employee to make the difference. The corporate environment or culture may preclude any formal development process.

Let's first tackle the issue of having an ineffective process. Companies jumped on the Six Sigma band wagon a few years before the Innovation wagon came along. This meant that new NPD procedures were grafted into existing quality initiatives. The resulting system is too detailed and cumbersome to be used for NPD, and lacks the focus on initial homework - "fuzzy front end". To use Stage-Gate terminology, in these cases the entire NPD effort consists of only a development stage. The process does little to ensure a focus on customer needs, hitting the market, and doing the right projects. These companies often are unable to distinguish between project management and product development. The best companies design a stand-alone, all encompassing NPD system with Product Management at the center. Stages and Gate meetings are built into everyday corporate live, and adherence to the system is required.

What about unrealistic expectations? Sending key employees to NPD seminars, or even providing NPDP certification are not enough. Middle-level employees cannot effect the level of change required to make NPD work. They most often do not control resources, cannot hire and fire, and do not have the trust / credibility of senior management. The best companies charge senior management with developing and implementing the NPD process. This ensures that NPD receives the focus, attention and resources it deserves.

Finally, if you gave up on formal NPD because the corporate environment wouldn't support it, there are many possibilities improvement. A renewed focus on Stage-Gate can actually improve employee morale and enhance performance because it eliminates much of the frustration associated with obscure objectives, unrealistic goals, lack of resources and poor customer relationships. Culture change is slow, and must be demonstrated by senior managers to all employees. If managers can agree on a common corporate strategy and provide links to business and product strategies, support staff can do their part too. If you are a manager, try thinking of your group as a stand-alone company. What changes would you make, and how would you use Stage-Gate?

Don't give up on formal NPD processes such a Stage-Gate just because execution may not have worked in the past. The best companies use formal NPD processes to outperform other companies by up to 7 times earnings. It is worth revisiting NPD and finding the roadblocks to initial success.

For some real help you should read "Winning at New Products" by Robert C. Cooper, the inventor of the Stage-Gate process.