June 07

Doing the Right Projects!

Doing Projects Right!

Stage-Gate Process• Almost 70% of leading U.S. product developers

now use some type of Stage-Gate process. • Sound research, best practices, used world-

wide.

Benefits• 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

Critical Success Driver #1

The number one success driver is a unique, superior product: a differentiated product that delivers unique benefits and superior value to the customer.

• But “me-too”, ho-hum, copy-cat, tired products tend to be the rule rather than the exception!

• Engineers or scientists building a monument to themselves

• The quest must be for real product advantages

Critical Success Driver #2A strong market orientation – a market driven and

customer focused new product process – Success factors in every study: needs

recognition, understanding user needs, constant customer contact, strong market knowledge, market research, quality of execution of marketing activities, up-front marketing activities are all key to success

– A strong market orientation is missing in the majority of new projects

Critical Success Driver #3More pre-development work – the homework or ‘up-front’ activities

• Screening, market studies, tech feasibility, build business case • But little time and effort are spent here: 7% of money and 16%

of effort (Japanese and highly successful US firms spend considerably more here)

• Homework answers key questions before Development begins:– Is the project economically attractive?– Who is the target customer? What positioning?– What should the product be? features, attributes, performance – Can it be developed? At the right cost? How?

Critical Success Driver #4Sharp and early product & project definition (before Development)

• This definition includes:1. Project scope2. Target market definition3. Product concept & benefits to be delivered: value proposition4. Positioning strategy (include price point)5. Features, attributes, requirements & specs

• Why so critical?1. Forces homework to be done up-front (Success Driver #3)2. Communication tool 3. Provides clear targets for Development

Critical Success Factor #5

An international orientation in product design, development and target market selection is more successful

• International products aimed at world regional export markets– Global products– “Glocal” products

• Often missed by North American firms!

Critical Success Driver #6The right organizational structure & design are keys to new product success

• A true cross-functional team approach– Responsible for the project, not to their department– On the project end-to-end

• Team empowerment– Control over project’s resources

• Team accountability– Responsible for achieving agreed-to goals

• A clearly defined team leader– Chosen for the right reasons

Most firms have too many projects and too few resources to do them!Why? … A failure to focus

We want “funnels”..not “tunnels”•Begin with many solid concepts•Successively remove the poor ones•Must “drown some puppies”

Critical Success Driver #7

Critical Success Driver #8Leveraging core competencies is vital to success

• Why?– Resources: are available & at marginal cost – Experience: there are fewer surprises – less goes wrong!

• Two types of competencies:– Technological – both Development and Manufacturing– Marketing – customer base, channels, sales force, service,

etc.• Important screening or project selection criteria

– Rate the project on technological & marketing leverage

Critical Success Driver #9

The Resources Must Be In Place!“Even the best game plan comes to nothing if the players

aren’t on the field!”“Urgent things always take precedence over important

things”• Best performers are resource rich in New Product

Development:• Sales people• Marketing people• Manufacturing or Operations people• Technical or R&D people

Critical Success Driver #10

Top management support doesn’t guarantee success, but it sure helps

• Top management support critical to getting projects to market

• But top managers tend to drive failures with a higher frequency than average successes!

• Top management’s role: to set the stage – a behind the scenes facilitator (not so much an actor)

Stage-Gate Product Development

• A System from Idea to Launch

• Breaks the New Product Development Process into a series of manageable and simple stages

• Used by leading corporations world wide

• Adapted for each situation

Stages in the System

Scoping

Build Business

Case

Gate 1

Stage 1

Stage 2 Stage 3Gate 2Gate 3

Idea Screen

Second Screen

Go To Development

Development

Gates = Decision or GO /KILL Points

Gates are the quality control check points in the process

GATES – ensuring only the RIGHT projects move forward

• Readiness check & quality of execution:– Steps executed– Deliverables in place

• Business Rationale:– Attractive opportunity?– Strategic project?

• Action Plans:– Forward Plan good?– Resources available and

committed?

Set up an “Idea Capture” System

• Intake point/s – Innovation Champion

• Proactive in seeking projects

• Takes projects or ideas to Gate 1

• Gets decision• Move forward to Stage 1 OR into Idea Vault or

Bank

Gate 1 – Idea Screen• The initial GO/KILL Decision• First but tentative commitment of resources: a flickering

green light• Develop a forward plan for Stage 1

Must Meet Criteria for GO: Minimum Market Size, No Show-Stoppers

Should Meet Criteria:Strategic Fit, Technical Feasibility, Market Attractiveness, Competitive advantage (Rating 1 to5)

Stage 1 - Scoping• A preliminary investigation• Within one month• Key Tasks

– Preliminary Market Assessment– Preliminary Technical Assessment– Preliminary Business Analysis– IP, Regulatory, Safety

• Gate Deliverables – Prelim Product Def & Bus Case

Gate 2 – Second Screen• Second review – Better

information• Opens the door to a more

expensive second stage – Building the Business Case

• Gatekeepers?• Approval of the Forward

Plan and Resources

Should Meet Criteria:Strategic Fit, Technical Feasibility, Market Attractiveness, Competitive adv, Core Competency, Risk/Reward (Rating 1 to5)

Stage 2 – Build the Business Case

• Makes or Breaks the Project

• Detailed Investigation• The Business

Plan/Feasibility

• Key Tasks– Market Analysis– Competitive Analysis– Voice of Customer– Concept Test– Technical: Proof of

feasibility– Production/operations– Legal– Management– Financial

Gate 3 – Go to Development• The “money gate”• Opens the door to full scale

development & heavy commitment

• Must have: – Complete plan– Defined product– Full financial review

Stage 3 - Development• Implementation of Development Plan

– Develop the product as per the Gate 3 Definition– Undertake in-house product testing (lab, alpha)– Conduct limited customer test via “show & tell”– Develop manufacturing (operations) process– Develop detailed Test Plans– Develop Launch Plans

• Detailed Market Launch Plan• Production/Operations & Quality Assurance plans

Gate 4 – Go to Testing• Opens the door to

Stage 4 – Validation and Testing

• Review of Financials• Review and approval

of Test Plans

• Criteria for Go:– Quality of Activities in

Stage 3– Deliverables and

Readiness Check– Consistency Check –

prototype consistent with definition

– Revisit criteria and business plan

Stage 4 – Testing and Validation

• The final tests of the product, production and operations & marketing strategy prior to full commercialization

• Update financial analysis• Prepare final Launch Plan

Gate 5 – Go to Launch

• The final GO/KILL gate in the process

• Involves:– A critical review of all activities and results– A review of the updated financials– A review & approval of finalized production

and market launch plans– Check list that all is commercial-ready

Stage 5 - Launch• Key Tasks to Implement:• Production/Operations Plan• Market Launch Plan• Post Launch (monitor &

adjust)• Product Life Cycle Plan

How Gates Work• The project leader drives the project from

stage to stage, gate to gate (the proponent)• The leader submits the inputs or deliverables

to each gate at the completion of a stage• The deliverables are pre-set

– A visible list of requirements – clear expectations– Based on a standard list or menu

• Deliverables provide the information needed for the Gate decision

Who are the Gatekeepers?• Management• Represent different

functional areas• Resource-owners• Authority to approve

and support

Gatekeepers and Their Role• Discipline – regular meetings and be there• Arrive prepared• Use the list of criteria – no hidden criteria• Ensure all project treated the same• Fast same day decisions• Provide advice and assistance on projects

Flexible and Scalable• Scalable to suit projects of different risk levels• The higher the risk the more rigorous the

process• Risk

– Cost– Potential payoff– Strategic impact– Uncertainty – uniqueness, unknowns

Needs vs Features• A Focus on Features:

Identifies today’s dominant product

• A Focus on Needs: Leads to tomorrows dominant product

Market Driven• Builds in Voice of

Customer• Loops back to the

customer• Homework upfront• Poker game

Spiral Development:“Build-Test-Feedback-Revise” Loops

Build Business Case

Gate 2

Stage 2

Stage 3 - Development

Stage 4Gate 3

Gate 4

Testing & Validation

VoC User Needs & Wants

Full Proposed Concept

TestRapid-proto &

Test

1st-proto & Test

Next proto &

Test

Field Trail Beta Test

Selecting the Right Projects• Encourage many ideas• Focus on the winners• Do your homework• Talk to the customers and LISTEN• Secure resources• One stage at a time• Strategic portfolio management

What stage-gate is NOT

• Not a functional review system

• Not a rigid system

• Not a bureaucratic system – streamlined

• Not the same as project management

Implementing a new process• Stage 1 - Defining

– Executive buy-in– Task force– Current process audit– Workshop – problem detection– Benchmarking

• Stage 2 - Designing– Training session– Rounds with feedback– Iterations with management and users

Implementing a new process

Stage 3 – Implementation– Training– Internal marketing – buy-in– Bringing Projects into the Process– A process owner– Documentation– IT Support

June 07

Thank-you