Overview of the Stage-Gate® Innovation Performance Framework
What is the Stage-Gate® Discovery-to-Launch Process?
The Stage-Gate® Discovery-to-Launch Process is the ‘industry standard’ for managing product innovation and is used by companies of all sizes around the world.
It is a function-neutral business process that coordinates all of the disciplines and their respective practices while bringing visibility and oversight to the innovation pipeline. This enables a company’s leadership team to manage innovation strategically. When a company is using an authentic Stage-Gate Discovery-to-Launch Process it achieves:
- 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
How Does It work?
Stage-Gate is based on the belief that product innovation is a value creation process that begins with ideas and ends once a product or service is successfully launched. This has a lot to do with the benchmarking research that the Stage-Gate process design is premised on. It is a much broader, more holistic and full cross-functional view of innovation than all other approaches.
The Stage-Gate model takes the often complex and chaotic process of taking an idea from discovery to launch, and breaks it down into smaller Stages (where project activities are conducted) and Gates (where business evaluations and Go/Kill decisions are made). In its entirety, Stage-Gate incorporates Pre-Development Activities (business justification and preliminary feasibilities), Development Activities (technical, marketing, and operations development) and Commercialization Activities (market launch and post launch learning) into one complete, robust process. It portrays all project activities as a visual pipeline where the Gates serve to surface and prioritize the most meritorious opportunities most deserving of the company’s scarce resources, thus creating a “funnel” (aka. Attrition Curve), opposed to a tunnel.
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.
Discover quality concepts and surface and shape the best bets. Right-size process rigor and risk, maximize value creation and incrementally build cross-functional alignment and organization readiness with each Stage and Gate.
- Tailor Stage-Gate for products, services, software, hybrids and/or technology development
- Identify targeted process improvements
- Integrate open innovation, spiral development techniques, agile or other hybrid process designs
- Gates strengthen your governance structure
- Harmonize with other business processes
- Incorporate the right voice of customer techniques
- Improve scale-up and commercialization
- Improve focus, hustle and execution.
Each Stage is designed to learn and collect specific information to advance the project to the next Stage or decision point.
Each Stage is defined by a purpose and the activities within it. Activities are completed in parallel (allowing for projects to move quickly towards completion) and are cross-functional (not dominated by any single functional area). These activities are designed to shape a new winning, product that will generate value for the market and for the company.
Each Stage progressively reduces uncertainty and risk. Each Stage incrementally increases in cost as the team expands to build organization readiness and alignment and prepare the market to adopt the new product, service or technology.
In the typical Stage-Gate model, there are 5 stages, in addition to Discovery Stage:
Stage 0 – Discovery
Activities designed to identify new business opportunities and generate new product, service and technology ideas.
Stage 1 – Scope
Quick, inexpensive preliminary investigation and scoping of an idea – largely desk research – to better define the concept, assess technical feasibility and to gain insights into commercial prospects.
Stage 2 –Business Case
Detailed investigation involving primary research and experiments – both market and technical – leading to a Business Case, including product/service and project definition, project justification, and the proposed plan for development.
Stage 3 – Develop
Detailed design and development of the new product or service and the design of the operations or production process required for eventual full scale production. Several alpha iterations of the prototype.
Stage 4 – Test and Validate
Tests or trials in the marketplace, lab, and plant to verify and validate the proposed new product, brand/marketing plan and production/operations. Several iterations of the beta prototype.
Stage 5 – Launch
Commercialization – beginning of full-scale operations or production, marketing, and selling. The transition from the innovation to the Product Lifecycle Management process.
Preceding each Stage, a project passes through a Gate where a decision is made by a cross-functional team of business leaders, whether or not to continue investing in the project (a Go/Kill decision). These serve as quality-control checkpoints with three goals: ensure quality of execution, ensure business rationale, and approve the plan and resources to accelerate the next Stage.
Each gate is structured in a similar way:
Deliverables: The project leader and team provide Gatekeepers with a high-level synthesis of what they learned during the previous Stage.
Criteria: The project is measured against a defined set of success criteria that every new product project is measured against. Criteria are robust to help screen out winning products, sooner. The authentic Stage-Gate process incorporates 6 proven criteria: Strategic Fit, Product and Competitive Advantage, Market Attractiveness, Technical Feasibility, Synergies/Core Competencies, Financial Reward/Risk.
Outputs: A decision is made (Go/Kill/Hold/Recycle). New product development resources are committed to continuing the project. The action plan and resource for the next stage are approved. The date for the next Gate is set. The Gatekeepers manage by exception until they see the team at the next Gate.
The Stage-Gate Discovery-to-Launch Process is designed to improve the speed and quality of execution of new product innovation activities. The process helps project teams focus on the right activities and information, with the right level of detail, to support the best decision possible, and allocate appropriate capital and operating resources. The process empowers the project team by providing them with a roadmap, with clear decisions, priorities, and deliverables at each Gate. Higher quality deliverables submitted to Gatekeepers enables better and timely investment decisions.
Stage-Gate Nurtures a High-Impact, Balanced Innovation Culture
Companies that have successfully implemented and use a Stage-Gate Discovery-to-Launch Process have a much better culture in place for fostering innovation.
|Innovation Culture with a Stage-Gate||Without Stage-Gate|
Applications of Stage-Gate Thinking
Stage-Gate is the industry standard for new product innovation. However, many companies have discovered that Stage-Gate management practices are transferable to other business applications. Some typical, successful applications of Stage-Gate include:
- New Platform Development
- New Process Development
- Market-Driven New Product (or Service) Innovation
- Customer-Driven New Product Innovation
- Bid/No Bid Decision Process
- Mergers and Acquisitions
- Grant Allocation Programs
- Technology Transfer Program Management
- Not-for-Profit/Association Program Management
- Government Program Management