Stage-Gate

A Stage-Gate System is a conceptual and operational road map for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates (gatekeeping). Cross-functional teams must successfully complete a prescribed set of related cross-functional activities in each stage prior to obtaining management approval to proceed to the next stage of product development.

Stage-Gate Systems
Usually stage-gate systems involve from four to seven stages and gates, depending on the company or division. A typical system is shown in Figure 1.

source: Robert G Cooper

The entrance to each stage is a gate; these gates control the process, much like quality control checkpoints control the production process. Each gate is characterized by a set of deliverables or inputs, a set of exit criteria, and an output. The inputs are the deliverables that the project leader must bring to the gate. The criteria are the items upon which the project will be judged, the hurdles that the project must pass at that gate to have the gate opened to the next stage. The outputs are the decisions at the gate, typically a Go/Kill/Hold/Recycle decision, and the approval of an action plan for the next stage.

Why Stage-Gate®?
With Stage-Gate® you:

• Get a systematic process from idea to launch to ensure quality throughout the development process
• Establish a framework for making effective go/kill decisions in time
• Only use the company’s development resources on the best ideas and projects
• Maximize opportunities for your new products in the market
• Reduce development time for new products from concept to launch
• Create transparency in the company’s portfolio of ideas and development projects.

Implementing a Stage-Gate® Product Innovation Process

• Have A Well Designed, Credible Process Design. The first step is to ensure that you have a strong foundation. This means ensuring that it is complete and meets the needs of your organization. While certain aspects of the process are unique to your industry or company there are many proven critical success factors that are built into good processes.
• Give Visible and Meaningful Leadership Support. What is important to the Leadership Team is important to everyone else. Similar to all other major initiatives if the Leadership team is strongly behind the initiative then the chances of success will improve dramatically. Successful product innovation is critical to the business strategy of your organization.
• Be Sure You Have Sufficient and Appropriate Resources. Although it may seem obvious you would be surprised by how many organizations that have tried to implement new processes without assigning enough resources to get the job done properly. Be sure you understand the actual resources you will need, including both skills and time requirements. Be sure the people assigned to the project have the time allocated to do the work needed
• Create Defined Roles and Responsibilities. Implementing a Stage-Gate process is usually a significant cultural adjustment for organizations. It, therefore, requires that many people at many levels contribute to making the change happen. Employees rarely feel comfortable with change. Successful companies ensure their people know in advance the roles and responsibilities they will have within the new process. Providing clarity around the roles and responsibilities makes it much easier for people to see how they can contribute, and makes it more likely that they will be strong supporters of the new way of doing business.
• Have A Strategic Implementation Approach. Thinking strategically about your process implementation is critical for managing expectations and getting the buy-in you need. There is something to the saying that the first 100 days are critical. During this introduction period you have people’s attention, and goodwill. You can capitalize on the sense of urgency that this creates. This period also permits you to demonstrate to the organization that the new initiative is real and strategically important. Hence the need to demonstrate that the initiative is being embraced at all levels in the organization.
• Be Effective with Your Communication and Marketing. Project teams implementing large change initiatives such as Stage-Gate usually devote significant time to researching, evaluating and designing their new process. Through this effort, they increase their knowledge and comfort-level in the topic. Often, when the team is ready to implement the initiative to a larger audience or community, they are so comfortable with the concept that they underestimate the need to sell it to others. They simply ‘unveil’ their work, expecting that everyone will be as excited as they are. Convincing others to not only participate in the new initiative but to find their own ways to contribute requires a well-thought-out communication and marketing plan. This plan should not only inform and educate but should generate excitement and maintain momentum throughout the life of the process.
• Track Your Performance. What gets measured gets done. It really is that simple. During the design phase the team should identify several key process adoption metrics that will measure the adoption rate and success of the new process. Create a starting baseline and select target dates for subsequent measurement. The clearer the metrics the easier it is for people to understand what is important and what the new process is trying to accomplish. This, in turn, makes it easier for them to understand how they can support the initiative.
• Appoint an Executive Sponsor of the Product Innovation Program. Rarely has an organization been able to declare the successful implementation of Stage-Gate, without noting the significance of the Executive Sponsor. Absolutely critical to success, the Executive Sponsor is the visionary for the Product Innovation Program, both from the short and long term perspective. Preferably a senior executive, the sponsor is able to contribute to business strategy through the development of an ambitious innovation plan for growth through new products. The sponsor relies less on the authority of title and more on capability to inspire an organization to participate and contribute to a grand plan of challenging, yet exciting change.
• Understanding the Impact on Your Company’s Culture and Systems. Never underestimate the willingness of people to reject change. Understand your company’s culture and what your challenges are going to be. One way to get started is to review some past change management initiatives, asking several key questions: “How successfully have we been in the past and why?” “How or what can we do differently this time to be more successful?” This should lead your team into a good discussion around the various company stakeholders, the impact the change will have on them, and the resources needed.
• Seek Effective Change Management. Change management done properly can yield extremely impressive results. Essentially, an effective change management program can enable people fulfilling the critical roles in Stage-Gate such as the Gatekeepers, Project Leaders and Team Members to transition through the change process much more quickly and effectively. This means achieving greater direct ontribution in a much shorter period of time and, of course, this means results!

Stage-Gate Best Practices
Best in Class Stage Gate Practices to consider:

• Mission-Vision-Values statements are critical – links to Business Challenge(s) and Stage Gate Process execution
• Internal & External benchmarking is key … keeping a customer focused approach
• Value Stream Mapping (VSM) Analysis … “As-Is” and “To-Be”
  • Leverage process improvement tools (5S, Standard Work, Operational/Analytical Methods, Visual Management, etc.)
  • Design based on Future State Benchmarking
  • Mission Critical Work Streams Identified with appropriate Functional and Management Group structures
  • VSM Process flow into discrete Stages separated by Gates to make go/no go decisions
• Challenges to “As-Is” Stage Gate Process … Sub Stages and Gates developed
• Playbook developed to standardize elements of Future State Stage Gate Process
  • One Integrated Plan/Standard Process
  • Multi-Functional and Cross-Team Collaboration requirements are defined and integrated into Process, Risk Management at lowest level of organization; Leadership - Coaching/Mentoring of Stage Gate Process/People, Risk Escalation/Critical Business Decision Making only
  • Communications - Well developed and fully deployed communication plan across functional teams and senior leadership
  • Empowerment to Functional Team(s) and site(s) for decision making
  • Rapid Decision Making built into Process
  • Risk Management and Escalation defined for Leadership engagement
  • Process Evolution, Robustness, and Standardization of Process developed to include Innovation, Portfolio Management, Risk Management, and Sustainability

Benefits of Using a Stage-Gate Model for New Product Development
Stage-Gate® is a proprietary innovation management model designed to coordinate the cross-functional creative process and integrate an options-based investment decision framework to accelerate time to market, maximize profitable success and minimize risk. It provides a consistent, proven framework for new product development governance. The benefit of using a Stage-Gate model are:

• Better in-market success (new product sales and profits)
• Better in-company project success (project speed, scoping, and budget)
• Greater portfolio visibility enabling better governance agility
• Improved in-company cross-functional team collaboration
• Improved collaboration with external development partners