The 6 Principles of Stage-Gate
The Stage-Gate® Discovery-to-Launch Process is the ‘industry standard’ for managing product innovation and is used by companies of all sizes and industries around the world. Stage-Gate is based on the belief that product innovation is a value creation process that begins with the idea inception and ends once a product or service is successfully launched and the post launch review is conducted. It is the only innovation management model to successfully integrate all key stakeholders into value-adding accountability-specific roles that can be sustainably repeated and improved upon.
At its core, the Stage-Gate Discovery-to-Launch Process is built on 6 principles, enabling the following benefits to stakeholders:
- Better in-market success (new product sales and profits)
- Better return on investment
- Better in-company project success (speed, scope, prioritization, and budget)
- Greater portfolio visibility enabling better governance agility
- Improved in-company cross-functional team collaboration
- Improved collaboration with external development partners
This blog outlines the 6 principles at the core of the Stage-Gate Process and how they contribute to the benefits that stakeholders enjoy.
Principle 1: Optimize the entire Innovation process
The innovation process starts with idea inception and covers all steps in between through post launch review. Stage-Gate anticipates this entire journey and brings visibility to this often chaotic, but creative process enabling team contributions along the way.
The teams executing innovation initiatives know from the start what steps will be required to bring the initiative to a successful conclusion. This helps them to think ahead, anticipate risks, avoid traps and move forward effectively.
Executives will have visibility on the innovation initiative’s journey, helping them to contribute their business expertise and insights at the appropriate time and connecting the many initiatives to innovation strategy and goals.
The Stage-Gate process has this core principle embedded in it which helps all levels of the organization, teams as well as executives, to contribute to the project’s success and ultimately to meet the company’s overall business strategy and goals.
Principle 2: Embrace risk by managing it
There is the saying “The greatest risk of all is not taking one”. There’s much truth to that and the Stage-Gate process is designed to encourage leadership to take risks, to embrace risks, but then manage it by breaking the risk down into smaller, more manageable pieces.
Each purpose-built and goal-driven stage in the Stage-Gate process represents an increasing commitment of funds and/or resources. The early Stages allow for minimum commitment while more information about the initial idea is being collected. Once the idea is better understood and a solid business case is available, leadership can increase commitment in the later Stages – but now based on a more solid foundation of facts and data.
Additionally, the process is right-sized to the risk and context of each project whereby highly risky and complex projects apply a process that has more stages, requiring more due diligence, than projects that are simple, have low risk and low complexity.
Principle 3: Accelerate the creative process
Innovation is driven by the creativity of the people that participate in executing the initiatives. While the term ‘process’ is often misunderstood as bureaucratic and non-creative, the Stage-Gate process has creativity built into each of the stages, right from the early Stages. The teams aim is to move from partial to full definition of the product or service through learning iterations that happen in each Stage. Unlike in waterfall processes, Stage-Gate allows for these iterations within the Stages driven by the project management methodology of choice (Scrum, Prince 2, PMBOK and similar). The common language applied by the teams support high performance, cross-functional team collaboration and strategically placed proven practices in the right stages, guide the winning solution.
Executives support the creative process by setting the stage for the teams so they can execute the initiative in the most efficient and effective way. One part of executives setting the stage are the options-based decisions in the Gates described in principle 4.
Principle 4: Options based decisions
While managing an innovation pipeline, it is common that not all ideas or projects will remain worthy of your investment. Internal and external conditions can deteriorate during a projects’s life and a mechanism to stop those ideas and projects with little or no chance of success is required. Allowing for one GO decision at the beginning of a new development project is flawed. In the Gates of the Stage-Gate process, we maintain the right to continue with a project, but we don’t have the obligation to do so. This is called an options-based decision process.
In the Gate, which always precedes a Stage, we evaluate the business merit of the project and this is the place where we stop weak projects and redirect scarce assets and resources to more meritorious projects. This enables organizational agility and responsiveness to the changing environments that businesses have to constantly deal with.
Principle 5: Activate performance through visibility
Good decision-making requires up-to-date information. Several levels of visibility are built into the Stage-Gate process:
- Visibility to process performance enables project-level agility by optimizing the pipeline one project at a time
- Visibility to the pipeline of projects enables re-allocation of assets and resources and decision agility
- Visibility to the longer-term view, enables agility with strategic choices
- Visibility to Post Launch Review of business and process parameters, enables quick process improvements as required
A picture is worth a thousand words and the described visibility levels are key for executives to drive a high performance, strategically driven, innovation pipeline.
Principle 6: Culture of accountability and discipline
Stage-Gate serves as an organization’s memory of what works and what doesn’t. It is a roadmap that should evolve with the organization’s learning curve and capability. Within the process, those that are accountable, acknowledge their performance, their wins and losses, through post launch review, while the organization in general has the ability to learn no adjust accordingly.
A common language and framework that effectively helps to coordinate, collaborate and manage expectations of the many stakeholders involved.
Additionally, the Stage-Gate process is empowering people to win with new products and services in the marketplace. Cross-Functional high-performance teams work in the Stage and interface at critical points with cross-functional business leaders governing the Gates.
Summary and take-away
The Stage-Gate process is purpose built to enable success in Innovation. The process is based on the described principles which enable Innovation success. Designing a Stage-Gate process for your organization requires a thorough understanding of these principles to achieve your business & innovation goals, and to execute your businesses strategy. While the principles described are easy to understand, the application to the specific situation in your company requires experience as many different interpretations might be available to achieve the best results for your business – “one size fits all” does not apply when designing and implementing a Stage-Gate process.
Stage-Gate international, the renowned world-wide experts in the Stage-Gate methodology can help you in the design process and services connected. For more information on our services, visit our website at www.stage-gate.com or contact us at info@stage-gate.com.
