Stage Gate Systems

• Exxon- PIP Product Innovation Process

• HP- Phased Review Process

• Guiness- NaviGate

• others: 3M, Polaroid, Kodak,Rohm and Haas,ICI,Mobil,Dow Chemical, Asahi Chemical, P&G, SC JOhnson

Typical 2nd Generation Stage-Gate Process

Stages

• Set of parallel activities

• undertaken by a cross-functional team

• gathers information for the next gate

Gates

• A go/kill decision point with

• a set of required deliverables

• pre defined evaluation criteria

• defined outputs: go/kill/recycle

Stage 1: Discovery

• R&D

• lead user analysis

• strategic planning exercises – gaps and opportunities in the market– disruptions

Gate 1: Idea screen- Gentle screen

• handful of must-meet and should-meet criteria– strategic alignment– project feasibility– opportunity size and

attractiveness– product advantage– fit to resources and

skills and policies

• Exxon’s PIP:• Strategic fit• Market attractiveness• Technical feasibility• Killer variables

Stage 2: Scoping

• Preliminary market assessment

• Preliminary technical assessment

• <= 1 month• 10-20 person-days of

effort

Gate 2: Second Screen

• Original set of must-meet and should-meet criteria

• new criteria:– sales force

– customer reaction

– “killer variable” presence

– simple financial assessment- payback period

• Reckitt &Colman now Reckitt-Benckiser:

• “Does the initial evidence suggest that the concept can win in the marketplace?”

3rd Generation Stage-Gate Process

Stage 2: Building the Business Case or the critical homework

stage• Market investigations and research studies

• Detailed technical analysis

• Detailed financial analysis

• Outcome: a business case for the project– Product definition– Project justification– Detailed project plan

Gate 3: Go to development

Last point before heavy spending• Process audit of Stage 2• Project evaluation on established criteria• Financial emphasis• Review and approval of

– Development plan

– Preliminary operations and marketing plan

• Designation of full team with authority

Stage 3: Development

• Lab tests, in-house tests, alpha tests

• Deliverables: lab-tested product prototype

• In parallel: marketing and operations

• Deliverables:– detailed test plans,

launch plans

– Production/operations plans including facilities requirements

Deliverables: Updated financial analysis; resolution of regulatory, legal and patent issues

Gate 4: Go to testing

• Review of development work and process

• Match to original definition is checked

• Review financial data

• Approval of test or validation plans

• Review of detailed marketing and operations plans for executability

Stage 4: Testing and Validation

• Validity of– Product

– Production process

– Customer acceptance

– Project economics

• In-house product tests

• User or field product trials

• Trial, limited production or pilot production

• Pre-test market, test market or trial sell

• Revised business and financial analysis

Gate 5: Go to launch

• Final kill point • Audit of process in

stage 4• Review operations and

marketing plans for implementation at the next stage

• Criteria: expected financial return and appropriateness of launch and start-up operations plans

Stage 5: Launch

• Implementation, fine tuning, success

Post-launch review

• 6-19 months from launch• Change status from new product to regular product• Disband NP team• Review project and product performance

– Revenues– Costs– Expenditures– Profits– Timing– Learning

What the Stage Gate Process is not

• Functional, phased review

• Rigid

• Bureaucratic

• Project management

3rd Generation Stage-Gate systems

Flexibility RCB’s triage: system change, fast-track, major

Fuzzy gates Conditional go-ahead subject to new information

Fluidity Overlapping activities

Focus Portfolio thinking on focus

Facilitation Key master,process manager, gate meister, process keeper

Forever green- adaptive International Paper’s web based gates; RCB’s “suck-in” externally developed new ideas

The first stages

Summary of Stage 1 Actions

Gate 3 Deliverables

Stage Gates 1,2,3 Must-Meet Criteria

Stage Gate 3 Should-Meet Criteria