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.