Stage-Gate® - Your Roadmap for New Product Development
The need for lean, rapid and profitable new product development has never been greater.
Product life cycles are shorter, competition is more intense and customers are more demanding.
Companies that fail to innovate face a grim future. The problem is that winning with new
products is not easy. An estimated 46% of the resources that companies devote to the conception,
development and launch of new products go to projects that do not succeed - they fail in
the marketplace or never make it to market.
Leading companies have overhauled their product innovation processes, incorporating the critical
success factors discovered through best practice research, in the form of a Stage-Gate new
product development process. According to several independent research studies (i.e. Product
Development & Management Association, AMR Research, Booz-Allen Hamilton, etc.) between
70-85% of leading U.S. companies now use Stage-Gate to drive new products to market.
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.
How Does the Stage-Gate® Process Work?
Product innovation begins with an idea and ends with the successful launch of a new product.
The steps between these points can be viewed as a dynamic process. Stage-Gate divides this
process into a series of activities (stages) and decision points (gates).
Stages are where the action occurs. The players on the project team undertake key activities
to gather information needed to advance the project to the next gate or decision point.
Stages are cross-functional (there is no research and development or marketing stage) and
each activity is undertaken in parallel to enhance speed to market. To manage risk, the
parallel activities in a certain stage must be designed to gather vital information - technical,
market, financial, operations - in order to drive down the technical and business risks.
Each stage costs more than the preceding one, resulting in incremental commitments. As
uncertainties decrease, expenditures are allowed to rise and risk is managed.
In addition to the discover stage, there are five key stages:
|Stage 0 -
||Discovery: Activities designed to discover opportunities and to generate
new product ideas.
|Stage 1 -
||Scoping: A quick and inexpensive assessment of the technical merits
of the project and its market prospects.
|Stage 2 -
||Build Business Case: This is the critical homework stage - the one that
makes or breaks the project. Technical, marketing and business feasibility are accessed
resulting in a business case which has three main components: product and project definition;
project justification; and project plan.
|Stage 3 -
||Development: Plans are translated into concrete deliverables. The actual
design and development of the new product occurs, the manufacturing or operations plan
is mapped out, the marketing launch and operating plans are developed, and the test
plans for the next stage are defined.
|Stage 4 -
||Testing and Validation: The purpose of this stage is to provide validation
of the entire project: the product itself, the production/manufacturing process, customer
acceptance, and the economics of the project.
|Stage 5 -
||Launch: Full commercialization of the product - the beginning of full production and
The structure of each stage is similar:
Activities: The work the project leader and the team must undertake based upon their project
Integrated analysis: The project leader and team’s integrated analysis of the results of all of
the functional activities, derived through cross-functional interaction.
Deliverables: The presentation of the results of the integrated analysis,
which must be completed by the team for submission to the gate.
Preceding each stage is a decision point or gate which serves as a Go/Kill and prioritization
decision point. Gates are where mediocre projects are culled out and resources are allocated
to the best projects. Gates deal with three quality issues: quality of execution; business
rationale; and the quality of the action plan.
The structure of each gate is similar:
Deliverables: Inputs into the gate review - what the project leader and team deliver to
the meeting. These are defined in advance and are the results of actions from the preceding
stage. A standard menu of deliverables is specified for each gate.
Criteria: What the project is judged against in order to make the go/kill
and prioritization decisions. These criteria are usually organized into a scorecard and
include both financial and qualitative criteria.
Outputs: Results of the gate review. Gates must have clearly articulated
outputs including: a decision (go/kill/hold/recycle) and a path forward (approved
project plan, date and deliverables for the next gate agreed upon).
What are the benefits of using
The Stage-Gate Product Innovation system has been referred to as the single most important
discovery in product innovation – empowering almost 85% of all North American companies
to achieve improved returns on their product development dollars and to achieve new growth.
When implemented properly, Stage-Gate delivers tremendous impact:
- Accelerates speed-to-market
- Increases likelihood of product success
- Introduces discipline into an ordinarily chaotic process
- Reduces re-work and other forms of waste
- Improves focus via gates where poor projects are killed
- Achieves efficient and effective allocation of scarce resources
- Ensures a complete process – no critical steps are omitted
A more effective, efficient, faster process that improves your product innovation results.