As we know with most business activities, a well-defined process is often critical to keep your project on track. But equally important is to have specific targets that must be reviewed and approved before continued investment of people and money can continue.
Given the complexity of innovation and new product development, and the high levels of new product failure for most industries, these initiatives carry a greater need for a rigorous process.
The most widely used process is often referred to as Stage/Gate. The name implies primarily what it does—breaks large projects into smaller components with specific gates that must be passed by the team once approved by management.
Not even the largest organizations can afford to pursue dead end new product innovations. And the most widely recognized experts in this field estimate that 70-90% of new products fail for consistent reasons:
Of course, there are many other reasons for an unsuccessful product launch. But you can significantly reduce these risks by doing customer research and having a thorough process that highlights issues before you get to market.
Typically, a Project Manager is assigned to lead the Stage/Gate team, but it can also be run by a detail-oriented marketing person. The team should include members from other functional areas that will not only interact with product development, but also bring it to market.
Their participation ensures the process takes into consideration the needs of all groups. Most teams I’ve led and seen include Marketing, R&D/Product Development, Sales, Finance and Customer Service.
The Project Manger initially meets separately with each key member of the team. Together, they develop each step in the process, the schedule, completion date and time required.
Once all these meetings have been completed, the Project Manager creates a master timeline with all steps and timing, along with dependencies. This creates buy-in and commitment. As team members establish their obligations, they see in the master timeline and how their work impacts others completing their tasks.
Another critical element of the master timeline is the various stages and gates that must be completed. A gate is typically a review step where the owners of the activities present the completed status to management seeking their approval to move to the next stage.
Types of gates can be:
So why are these gates important. The simple answer is that each step in the process adds additional cost and team resources. So, it’s prudent to be sure the team is meeting the original projections. You also want to know if anything has changed that materially impacts the expected incremental revenue and profit.
A diversely skilled and collaborative team is essential for success. Managing the Stage/Gate process is detailed and specific, but for good reason. The discipline of planning out every element of developing and bringing innovations to market will pay off.
The Stage/Gate process yields a product or service with a validated customer need, competitive cost and pricing strategies, and a well-informed and committed team to execute the launch for success.
This process is equally well-suited for small and large organizations. Although large organizations have large staff and budgets, it becomes even more critical for smaller organizations to get the innovation process right, given lean resources.
As the leader of your organization, here are a few things you can do now:
These initial steps will form an important foundation to develop, test, and launch successful innovations. This process works and has been proven time and time again by some of the largest and most successful companies we know as innovation leaders. And it will be fun and rewarding for all involved!
My next article will focus on the critical aspect of the product/service launch and how to build a plan and execute for success.