WEBINAR WINNING AT NEW PRODUCTS - Isbm€¦ · collaterals, story boards-And PPT selling presentation-Gauge: interest, liking, preference & purchase intent Rapid-Prototype & Test-Again

WINNING AT NEW PRODUCTSPresented by: Dr. Robert G. Cooper

April 7, 2020

WEBINAR

© RG Cooper & Associates Inc.Private and Confidential

48 Brant StreetOakville ON L6K 2Z4 Canada

P: +1 905 845 7273email: [email protected] Cooper & Associates

www.bobcooper.ca

Winning at New Products

ISBM Webinar April 2020With: Dr. Robert G. Cooper

Creator of the Stage-Gate® SystemISBM Distinguished Research Fellow, Penn State

University, USA.Professor Emeritus, McMaster Uni, Canada

2© RG Cooper & Associates Inc

Private and ConfidentialRG Cooper & Associateswww.bobcooper.ca

How Businesses Perform In NPD

Percent of Businesses0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

38.0%

27.5%

9.0%% of Revenue Coming

From NPs

77.1%

56.0%

26.9%% of Projects That Meet

Profit Objectives

Bottom 20% Performers

Average Business

Top 20% Performers

79.4%

20.5%

51.1%Projects On Schedule (%)



Critical Success Driver #1

A unique, superior product – a differentiated product that delivers unique benefits and a compelling value

proposition to the customer

‘Me-too’, ho-hum, copy-cat, tired products –tweaks, modifications, extensions – dominate development portfolios

Too many ‘little ideas’ – renovations

The “techies” building a monument to themselves

Technically driven, no market inputs

Finding big needs & major customer problemsDeveloping big solutions that are unequalled

The goal must be for real product advantage



Critical Success Driver #2

Assumptions masquerading as factsFailures usually the result of weak ‘front-

end’ activities

But little time & effort are spent here – no time, no budget

The homework doesn’t get done

Doing the homework & front-end loading the project is key to success – due diligence pays off!

Answers to key questions early:• Can we make money here? • Who is the target customer?

• What should the product be? • Can it be developed & produced? • At the right cost? How?

Screening, market & customer analysis, tech feasibility, build business case

Steps that precede Development are vital



Critical Success Driver #6: FOCUS

Most firms have too many projects and too few resources to do them!

Why? … A failure to focus

We want ‘funnels’… not ‘tunnels’Ø Begin with many solid conceptsØ Successively remove the poor ones

Fewer but better projectsPick your NPD projects carefullyImplement an effective Portfolio Management

SystemNot all project are winners

Be tough & selective



Top management commitment, leadership & support10The right climate & culture for innovation9

Adequate resources – people & time8Quality of execution end-to-end7

Robust up-front home-work – front-end loaded6Effective cross functional teams with power5

Products with a compelling value proposition4Sharp, early fact-based product/project definition3

Voice of customer at every stage2Focus – learn to drown some puppies1

The Key Principles of Stage-Gate

RG Cooper & Associateswww.bobcooper.ca



Stages in the Stage-Gate® System

Idea Successful Product

Idea Successful ProductStage 1

Small teamSmall $

Stage 2

Larger teamMore $

Stage 3

Full teamCommit $

New Product Development

Team

Breaks the I2L process into a series of manageable and simple stages with increasing resource requirements



Gates in the Stage-Gate® System

PLR

Post Launch Review

Discovery: Idea

Generation

Gate 1

Idea Screen

Stage 1: Concept

Gate 2

Concept Screen

Stage 2: Build Business Case

Gate 3

Go to Development

Stage 3: Development

Gate 4

Go to Validation

Stage 4:Validation

Gate 5

Go to Launch

Stage 5:Launch

q Each stage is preceded by a Gateq Gates = Decision Points or Go / Kill Points

q Gates are where projects get resources & are prioritized – get on management’s radar screen

q Gates are the quality control check points in the process



Prescribed List of Deliverables

n Decision: Go/Kill/Hold/Recycle

n Action Plan Approved

GATE

Gatekeepers

Decision Criteria

Ø Provide the key information to the gate needed to make the right decision… efficiently

Decision based upon…• Readiness check on

deliverables• Business rationale good• Action Plans OK & resources

available for the Team

Gates Are the Go/Kill & Investment Decision Points in the System



1. Accelerating: How to “Lean” Your Stage-Gate System Remove Non-Value Added Work!

Many idea-to-launch systems build in too

much

• Long lists of required tasks & activities per stage• Lengthy deliverables lists, many templates to be

filled out

Result of Process Design by Committee

• Each committee member with an agenda of things to be built into the system

• Different departments – from Legal to Finance – each write the requirements

Most Stage-Gate processes over time become far too bulky

• Is all this really needed?

If it doesn’t add value, why are you doing it? Why is it in your system?



Example from Danfoss. Note reduction in cycle time by 50% by using “lean” and “continuous improvement” methods: 2010-2014

Improvement:3.5-4 years time-to- market decreased to 1.5-2 yearsTTM metric: Gate “M0” (prelim business case) to launch



Make Your I2L System Efficient – No Waste

q Focus on the Value StreamØ A value stream is the connection of all the process steps with the

goal of maximizing customer value*

Ø In NPD, a value stream represents the linkage of all value-added & non-value-added activities associated with the creation of a new product

* Source. C. Fiore, Accelerated Product Development (New York, NY: Productivity Production Press, 2005).

RefinedInternal fine tuning & iteration to gel idea

ProjectFormallyOpened- Eroom- leader- scope- deliverables- resources- milestones

PSTor PPMTGo/Kill

Kill

NewProductIdea

PSTor PPMTGo/Kill

Kill

Customer Defined- Specialists- PM- APD/NPD

Internally Defined- APD- NPD- PM

q Remove all waste: Ø Value Stream AnalysisØ Two methods: I & II



2. Adaptive Spiral/Iterative Development” – Gets the Product Right

Stage 1- 2

Front-End Homework

Gate3 Stage 3

Development

Go ToDevelopment

Gate4 Stage 4

Testing &Validation

Go ToTesting

Gate5

Go to Launch

Product Definition Fixed

Here

• Handles the dynamic information process with fluid, changing information

• Gets the product right

Spiral (Iterative) Development

• Front-end work or homework is done• The product specs are determined, the product

definition is fixed• Development proceeds – the product is developed• Then into Testing… but…

By Contrast: the Rigid, Linear Process

RG Cooper & Associateswww.bobcooper.ca



q They use a series of iterative steps or ‘loops’ Build-test-feedback-and-revise

q They define what information is fixed & reliableq And define what design elements of the product are

fixed versus variable (fluid)q They develop a first very early version of the

productØ A virtual prototype, a model, a “protocept”Ø They test it with the customer, seeking fast feedbackØ Which they then use to produce the next & more complete

version, a crude model or rapid prototype… & so onq Use tools:

Ø Crude modelØ Virtual prototypesØ Rapid prototypesØ SimulationsØ Animations

Smart Teams Practice Spiral or Iterative Development

Get something in front of people! People don’t know what they’re looking

for until they see it.

GE Tests 3-D Printed Turboprop



VoC User Needs-and-Wants Study

- Face to face interviews

- By entire project team

- With users & customers

- Identity needs, problems, issues, requirements

Full Proposition Concept Test

- A simulated 'sell'- Pre-Development!- With 'virtual prototypes' or 'protocepts'

- And brochures, collaterals, story boards

- And PPT selling presentation

- Gauge: interest, liking, preference & purchase intent

Rapid-Prototype & Test

- Again a test of proposed product

- Early in Development Stage

- Using a rapid prototype, crude prototype, or model

- 3-dimensional & physical

- Again with selling materials

- Gauge customer reaction & purchase intent

Working Model- Much the same…- But versions of product much closer to the 'final product’

- Gauging customer reaction & purchase intent

Next Version- Again much the same as above

- Closer yet to “final product”

Customer Tests- True prototype tests in actual in-use conditions

- Field trials- Beta tests- In-home tests

Gate2

Gate3

Stage 2: Build Business Case Stage 3: Development Stage 4:

ValidationGate

4

Adaptive: Spiral Development – “Build-Test-Feedback-Revise” Iterations

On average: best firms had 5 iterations with customers during Development



3. Build in Flexibility – Context-BasedTailored to Each Project

• No activity is mandatory• Nor is every deliverable required for every project • Not a rigid list of actions & deliverables

Make the process flexible & adaptive

• They map out their detailed Forward Plan• They propose actions & deliverables

Trust the project team – give them latitude

The Team maps out their detailed Action Plan for the

next Stage

• The Team maps out their detailed Action Plan• They propose actions, timing & deliverables• Plan is approved by Gatekeepers for next stage



Employ Other Versions of Stage-Gate

Gate1

IdeaStage

Idea Screen

Discovery

Stage-GateLite

Gate3

Stage1 & 2

Go to Develop

Scope & Business Case

Gate5

Stage3 & 4

Stage5

Development & Testing

Launch

Go to Launch PLR

Stage-GateXPress

Gate3

Stage1 & 2

Stage3, 4 & 5

Scope & Business Case

Execute: Development, Test & Launch

Decision to Execute PLR

Gate4

Stage3

Go to Develop

Development

Gate5

Stage4

Stage5

Testing Launch

Go to Launch PLR

Gate2

Stage1

Gate3

Stage2

Scoping Business Case

2nd Screen Go to Test

Stage-Gate(Full)

q Stage-Gate Lite & XPress for smaller projects

q Stage-Gate TD for technology developmentsØ New scienceØ Platform developments

q Stage Gate for Process DevelopmentsØ The factory or plant is “the customer”

q Example:Ø Exxon uses different versions of Stage-Gate for...

• Oil well drilling• Plant expansions and Capex projects• Pipeline construction• Manufacturing improvements• New products• Science projects• Internal IT projects



• Assumptions that are critical to the success of the project, product design or Business Case

Identify the key assumptions, unknowns & uncertainties

• What information is vital to verify or validate the key assumptions, mitigate risks

Then agree on the knowledge gaps to be filled

• What we need to do to get that information?• What activities (actions)?

Finally determine the key tasks or activities needed in each

stage

5. Try a Risk-Based Contingency Model

Information is one key to reducing riskThe other: a gated, incremental Idea-to-Launch system

Net Result: Each project is custom-tailored, contingent on its unique risks & assumptions



Corning’s Approach:

Requires highly-skilled project teams“These are very smart people…”



Another company:The Project Team developing their Action Plan using the Innovation Canvass

And their resulting Canvass with red/yellow/green notes• Canvass drawn across board• Orange notes are Tasks



6. Try Agile-Stage-Gate – Borrow Agile Methods from Software World

q A sprint is the basic unit in Agile-Scrum:Ø Sprints last 1-4 weeks Ø Are a "time-boxed" (i.e. restricted to a

specific duration) effort of a constant lengthq Each sprint is starts with a team meeting

Ø The Sprint Planning MeetingØ Agree on sprint goalsØ Map out sprint tasks

q Daily “stand-ups” or scrumsØ 15-20 mins to organize each day Ø Set priorities, shift responsibilities, knowledge management, learning

q And followed by a demo & retrospective meetingØ Demo: Where completed work (e.g. a model) is demo’d to stakeholdersØ Retrospect: Where progress is reviewed & lessons are identified.

A daily scrum meeting. This choice of location lets the team start on

time



Now Used by Manufacturers: Example – Chamberlain

q Uses Sprints & Scrums for physical & IT developmentsq Sprints:

Ø About 2 weeks in length, now 3 weeksØ Must show something physical, the

result of a completed task (not a PPT show, but design drawings, models, etc.)

q Daily scrums, about 20 minutesØ Scrum Master in place

q Project teams have dedicated team members per projectq Only use for larger, major revenue generator projects – about 20% of totalq Working well, 6 years into

Ø Faster to market – by about 30%Ø Gets the product right – fewer warrantee issues, returns

q Problems: Ø Project leader & team loses sight of ultimate goals, just focused on the next 2 weeksØ Sprints initially too short to demo anything



Customer or User

Project Close

PLR

Ideation

Iterations2-4 weeks

IdeaScreen

Gate 1

Concept

Iterations2-4 weeks

ConceptScreen

Gate 2

Business Case

Iterations2-4 weeks

Go toDevelopment

Gate 3

Validation

Iterations3-6 weeks

Go toValidation

Gate 4

Launch

Iterations3-6 weeks

Go toLaunch

Gate 5

Iterations occur within the stages of the process, many iterations within longerstages such as Development. Each iteration starts with a Planning Meeting,and ends with a Demo to stakeholders, followed by a Retrospect.

Agile-Stage-Gate with Stages & GatesWith Agile Sprints, Scrums & Demos Built into Stages

Iterations3-6 weeks

Development

Iterations3-6 weeks



WOW! Performance Improvements with Agile: Actual Vs. Expected Results

(2018 DE Study of 228 EU Manufacturing Firms – Mostly Engineering)

3.1

2.6

2.4

2.8

2.5

2.5

0 1 2 3 4

Increased flexibility toreact to changes

Increased productivity ofdevelopment project

Reduced project risk (techfeasibility; project failure)

Improved teammorale/motivation

Improved adherence toschedule

Shorter productdevelopment (time to

market)

Value of Agile Hardly Any Value

Very Large Value

Source: Schmidt, Weiss & Paetzold, “Agile Development of

Physical Products”, 2018



Another Reason: Digital Transformation

q Smart products with embedded software q Embedded software now 29% of manufacturers' new productsq Example: Volvo Construction

q How to handle these projects with IT people & engineering peopleØ Each using a different system, different cultures

q One option: Split the project, run as two separate projectsq Another option: a hybrid model → Agile-Stage-Gate



The Full 2-Day ISBM Seminar

q Winning at New Productsq This course will be held regardless of COVID-19 events. q It will be delivered remotely over several days

Ø unless we are clear to host it at a location, Ø likely Pittsburgh PA.

q Registrants will determine the delivery methodq June 16-17

q See also articles on lineØ www.bobcooper.ca

Documents

WEBINAR WINNING AT NEW PRODUCTS - Isbm€¦ · collaterals, story boards-And PPT selling presentation-Gauge: interest, liking, preference & purchase intent Rapid-Prototype & Test-Again