During a recent webinar titled The Five Most Important Drivers of Success in Product Innovation – That Most People Get Wrong! with Dr. Robert Cooper, President of the Product Development Institute Inc., he fielded a number of audience questions. Bob is also the creator of the Stage-Gate® system, the widely used innovation and new product development process and methodology used by leading organizations around the world to drive new products to market. Based on his broad and deep knowledge, below are his answers to a number of the audience questions. (Read part one and part two.)
Audience: What do you say to the risk that going too flexible in the structure of a Stage-Gate system is just a "sop" to those individuals in a company that simply don't want to have their decisions challenged?
Bob: There are limits to flexibility. Otherwise, soon you have no system at all and it’s back to the chaos of the 1970s, when project teams and R&D folks could do pretty well what they wanted. Back then, budgets were much less constrained, relatively speaking (resources seemed plentiful), and besides, NPD results were not so good.
These are relatively good policies for some limits:
- We have a basic I2L system, regardless of flexibility – a 5-stage, 3-stage lite and a 2-stage express system. All development projects must go through one of these (specify guides for routing).
- We have gates where go/kill decisions will be made. A decision must be made, usually that day, and resources must be committed to the project leader and team right at the gate meeting.
- There are certain deliverables expected at each gate regardless of the project. Other deliverables are discretionary. However, what will be delivered is agreed at the previous gate and not just on a whim of the project leader or some team member.
- There are certain expectations regarding key activities (tasks) that will be done regardless in each stage, and quality standards for the execution of those tasks. For example, for major projects, a solid voice of the customer (VOC) study, a financial analysis according to some template, and a technical assessment will all be done in stage 2.
Bottom line: There is a fine line between flexibility and intellectual laziness or plain and simple lack of discipline. You can have guide books or electronic manuals, templates and training, but ultimately the gatekeepers together with the Stage-Gate process manager must set the expectations.
Audience: Many companies seem to be cutting back on market research because they are trying to do things faster and cheaper. Many consultants are actively dissuading companies from doing research because they say it does not provide insights. How should companies deal with this?
Bob: Customer or user input, at the very front end to generate ideas is key. (See two articles on the best sources of new-product ideas, results of a survey of many firms, and VOC methods are highly-rated by users on my webpage). Customer inputs achieved via spirals or iterations (a series of build-test-feedback-and-revise loops are vital too. One problem with traditional market research is that customers don’t know what they want until they see it. So get something in front of them early, cheap, and fast. In short, consider it a plea to use this spiraling approach.
Perhaps it’s the type of market research that’s being done that’s the problem. Regardless, customer insights are critical: More new products fail due to faulty customer and market information than any other single cause!
Audience: I agree that the customer input is key, but how do you suggest one copes with when customers provide their needs in terms of potential solutions rather than what they want to achieve (e.g. when they are effectively making assumptions about what you can deliver)?
Bob: It’s OK that the customer has your next new product. In fact, there’s some research that shows this is very true, especially in some industries. Lab instruments is an example. Just make sure that your front-line people (e.g. sales and tech service) are trained to recognize a customer-developed product, and act on it.
Audience: Can you comment on the Innovator Dilemma comparing innovation of sustaining vs. disruptive products.
Bob: Wow! We could spend hours on this topic. Today I fear that, facing the demands of shareholders for short term profitability, too many firms have opted for a new-product effort that results in a pipeline full of modifications, tweaks, product improvements, and small initiatives. These are sometimes called sustaining innovation, but in reality, it’s not innovation at all, but rather a renovation strategy.
Our research over the years shows that the proportion of significant innovations and genuine new product projects in the typical development portfolio has dropped in the USA. The chart below shows the trend from the 1990s to today. We have a similar chart that shows that poor performers have a much higher proportion of small projects in their portfolios.
Audience: Steve Blank's customer discovery approach seems to support your customer interface approach.
Bob: Agreed, but he is not the first advocate of this type of methodology.
Audience: Adaptive development. What is your experience of how this approach could lead to trial fatigue at customers, especially in a B2B situation?
Bob: Yes, adaptive development complete with multiple spiral or iterations can lead to user fatigue. Thus the project must be an important one for both the customer (one with significant benefits for him or her) and for you. And the early iterations can even be done online using virtual products, so they are less onerous and maybe fun, even enlightening, for the customer too.
Key point: Don’t let doing lots of customer trials (spirals, iterations, user trials) be a substitute for doing your homework up-front with the customer. Again, there is a fine line between good practices here and just plain laziness (unwilling to do the hard work early on). Without that front-end homework, you probably won’t get the product right at all, and then be caught in an endless set of spirals (user trials) which can indeed begin to annoy the customer.
For B2C products, not as problematic, as one can go to different groups of customers for iterative feedback along the way. Again, do the front-end homework with customer/users to yield a higher likelihood of getting the product rights, and save yourself some unnecessary trials or iterations later on. Pay me now, or pay me later!
Audience: Do you have a maturity/quality scale for PD processes?
Bob: Not really. We do have a maturity model that captures moving from no process to an I2L gating process to portfolio management to a full innovation model or system. Frankly, it might be difficult to generalize a maturity model for just the I2L process, as I see companies following so many different paths to reach their destination (and of course, many do get lost along the way!). We do have a model for the design and implementation of an I2L process however. If interested, contact me directly.
Audience: I attended your course, several years ago at McGill University. What major changes have you made to the Stage-Gate process in the interim?
Bob: Wow, several years ago was probably more like 10-15 years ago, as I have not given my seminars at McGill in Canada for many years. And a lot has happened since then, so much, that this topic is a full-day question and answer session.
In a nutshell, leading firms have adopted a “Triple A” approach – more agile, more accelerated, and more adaptive and flexible. A comprehensive article on what firms have done is available. For example, see What’s Next After Stage-Gate (both the long and short versions) in the section Next Generation Stage-Gate® and What’s Next After Stage-Gate® (8 Articles). There are another few other articles in that section that are not quite so step-out for more modest improvements to Stage-Gate. We do have a two day seminar on this topic, so it’s a bit tough to answer in a paragraph or two.
Audience: Many companies vary in their skills and priorities. The top five drivers in this webinar are not listed in a priority order for everyone, it is infinitely variable. Some of the other nine problem areas you mentioned could come forward and be a priority for some.
Bob: Agreed. There are a number of success drivers or factors in new-product development that I did not cover in the webinar, both at the project level and at the business-unit level. Some of these may be drivers or practices relevant for you. I tended to focus in the webinar on those factors with the highest impact and/or where performance is most in need of improvement, again, based on research. (See PDMA Handbook chapter one and also read my best practices articles.)
Audience: Do you have any statistics on the percentage of dropout of NPD's in various stages, 1, 2, etc.?
Bob: Yes, but be careful about using averages. First, no one is average, and second, if you use these average drop-off percentages as a guide for how many projects you should be killing at each gate, it may become a self-fulfilling prophecy. Not good. For data, see the chart in the answer to my first question in this series. That attrition chart comes close to giving you what you want. Again, there are great dangers in generalizing.
Dr. Robert Cooper is a world expert in the field of new product management. He was named The World’s Top Innovation Management Scholar and The Quintessential Scholar in the U.S. publication, Journal of Product Innovation Management (JPIM). He is one of three Crawford Fellows of the Product Development & Management Association (PDMA). Bob is the creator of the Stage-Gate® system, now widely used by leading organizations around the world to drive new products to market. He has helped hundreds of leading corporations design and implement his Stage-Gate® innovation and new product development process. He is also the developer of the NewProd® system for screening and diagnosing new product projects.