Scott J. Edgett
Today’s business environment raises the interesting question of what should we do about product innovation in these tough times. This, of course, is not the first time that we have faced economic declines and uncertainty. And times will get better albeit a very debatable issue as to when this will actually occur. However, even in tough times, innovation does not stop. New technologies are still being invented and competitors are still aggressively looking at how to take your market share. Business still goes on.
The key question is how your organization will respond. Will it be the type of company that battens down the hatches and hopes to ride out the storm until better days arrive? Or, will your organization be in the group that realizes that there are still good opportunities out there? Is R&D now thought of as an expense that should be cut or an investment for the future? The smart firms will be ones that take advantage of these tough times and use the retrenchment of their competitors to gain traction. You may not have any budget increases and may be under pressure to do more with less. However, this does not mean you cannot generate good results. In fact, more than ever, your organization needs the new products that will entice customers to purchase your goods and perhaps even switch from a competitor.
So how do you go about conducting successful product innovation while still doing your part to help your organization weather the storm? Smart companies understand that to realize the potential benefits they are going to have to work smarter. Some practical ways of doing this that can deliver immediate results include:
- Clean-out your pipeline.
If yours is like most companies, your product innovation pipeline is clogged with projects that, at the end of the day, will bring little value to the company even if you do finish them. We all know what type these are. These are the projects that even the project’s team members know are of little value; people wonder why they are still active or they are very incremental in nature and will do very little to generate increased revenue. Meanwhile the few really good projects that you do have in your pipeline are being starved for resources.
One quick way to free up immediate resources is to have an executive review of all projects currently underway in your pipeline and cancel or put on hold at least half. Yes, at least 50 percent. By doing this you will immediately free up a large amount of resources that can be assigned to work on the really good projects. Teams will be able to focus their efforts rather than spreading themselves too thinly. As one executive said “I would rather have one new product hitting the market each quarter rather than a dozen projects all inching their way forward. At least this way we are delivering new revenue to the organization and demonstrating immediate payoff in a time when they really need it.”
A company I have recently visited decided to reprioritize its project pipeline to try and obtain immediate results. What they did was to review all the active projects in the pipeline and rated them either ‘A’, ‘B’ or ‘C’. Projects labeled ‘A’ are must do, high value, projects; ‘B’ projects are needed but not urgent and ‘C’ projects are nice to do if they have the time. Once they had this list then all ‘C’ rated projects were put on an immediate hold. Each team was assigned one ‘A’ project with the mandate to focus all efforts on this project. The remaining ‘B’ projects were assigned, but with the caveat that they are to be worked on only when there is unavoidable down time on the ‘A’ project. The goal of this exercise was to focus teams on high value projects in the hopes that this would drive these projects to market faster. The adage of Focus, Focus, Focus still works!
- Ring-Fence a few key projects.
The idea here is simple. Identify a couple of projects that if completed and launched into the marketplace could make a real difference. Then assign your best people to work on these projects. The key here is to remove any other project or time commitments the project team members might have so that they are totally dedicated to the project and have no distractions. Again the goal is to accelerate key projects so you are bringing new revenue opportunities into the marketplace as fast as possible. Ring fencing protects the resources so they are not drawn onto other projects that will dilute their attention and time. Companies that have tried this do find that it works. It removes the problem of today’s urgent problems overriding the efforts needed on new product development – at least for a few key project teams.
- Refresh your Stage-Gate process
With tight budgets and scarce resources there is no time to do things twice or to do the wrong work. Hence now is a good time to clean-up your Stage-Gate process to make it even better. Most companies have a few activities that could be immediately improved to enhance the performance of the process. A few common examples of quick hits are:
- Improved Gatekeeping: Better gatekeeping means better decisions, hence better pipeline
management. Select the right projects for the right reasons, thereby ensuring that your
pipeline is made up of high value projects. If you are not happy with the quality of your
gate meetings then why not take a little time at your next meeting and discuss how these
meetings can be improved. A room full of smart people probably already know how it could
be improved. It just needs the action of creating this forum to bring these different ideas
to the table and agreeing on how to implement them. The result – better decisions
and better projects in the pipeline.
- Product definition: Improving the product definition for the project ensures that development
teams are working on the functionality and attributes that really are important to the customer
versus interesting bells and whistles that, in the end, no one will care about. This is
an area that can also dramatically improve your time-to-market. Many project teams spend
a lot of time recycling a project through the expensive development and testing stages because
they did not think it through properly in the first place. The adage is true that ‘we
never have six weeks in the early stages of a project but we always have six months at the
back end to fix it’. The goal is to break this unproductive cycle and hence free up
resources. Thus without increasing costs you can increase resource availability by
doing ‘right things right’ the first time around.
- Streamlining the documentation: Over time most companies tend to have too much documentation requirements that bogs the team down and creates unnecessary work. This is not to say that we do not need proper documents as we move the project forward but instead ensuring that the documents we do require are achieving the goals we want which are to reduce risk and tighten up the project. By getting rid of unnecessary work, teams will have more time to actually work on getting the project completed and into the marketplace. A knowledgeable process owner should be able to recommend how your process could be immediately stream-lined to produce more effective and efficient results. After all this is part of their job to ensure the Stage-Gate process remains evergreen and is providing real value to the organization.
On a positive note
If your R&D group is in the fortunate position of still being able to replace people who leave, or to increase staff this period of economic down turn is an excellent time to recruit in new talent. There are lots of good people in the job market due to unfortunate circumstances such a downsizing and/or those that see the writing on the wall in their current company and are considering moving on. Now might be a great time to be able to actually find and attract some great new talent for your company.
Smart companies are using this time of economic uncertainly as an advantage and are proactively taking steps to ensure that high value is being delivered to their organizations. They are also preparing to fight the future battles which will depend heavily on new products. They are focusing on doing the ‘right project for the right reasons the right way’!
About Stage-Gate International
Stage-Gate International’s highly knowledgeable and experienced team of advisors have guided hundreds of organizations to successfully implement a best-practice Stage-Gate Idea-to-Launch process in as little as 4-8 weeks. We accelerate time-to-benefit with an extremely attractive return on investment by:
- Crafting a balanced Idea-to-Launch Process Solution of expertise, advice, facilitation and best practices that fits your company’s situation, sense of urgency, and budget.
- Collaborating with you so that your Idea-to-Launch process is implemented rapidly and your organization is equipped to ‘own’ and manage the process as quickly as possible.
- Leveraging our market-leading accelerators, Benchmarker™ and SG Navigator™, to not only deliver all of the foundational elements straightaway, and ‘clear the path’ for rapid achievement of a best-practice Idea-to-Launch process.
Dr. Scott J. EdgettScott J. Edgett is Chief Executive Officer at Stage-Gate International and is internationally recognized as one of the world's top experts in product innovation. A high-profile speaker, sought-after consultant, and executive advisor, he is the pioneer of the critical practice of new product portfolio management, and principally focuses on issues affecting innovation performance, capability and leadership. Consulting and advising some of the world's best innovators and companies among the Fortune 1000, he has extensive experience working with large multi-national clients in a variety of industries. He is credited with helping business executives and product innovation professionals successfully implement world-class product innovation programs that have generated outstanding performance results.
A co-author of eight books, including the popular 'Product Innovation & Technology Strategy', and a published author of 70+ academic articles, Dr. Edgett is a former professor at the DeGroote School of Business, McMaster University.