Michelle Jones, Executive Vice President,
Fortunately, building a high performance idea-to-launch process is only a little more difficult than building a bad one. Mediocre or poor processes exist simply because the builder(s) was unaware how little separates a good process from a bad one. What is truly inspiring however is the significant difference in the performance results that can be achieved – it pays to build a high quality process and there is much evidence to support this.
Consider these well researched and widely documented facts on just some of the performance levels achieved by companies using a high performance Stage-Gate® Idea-to-Launch Process:
- New Product Success Rates are 3x higher1
- Time to Market is 35% faster2
- New Products achieve profitability targets 77% of the time3
- New Product Projects are on time and on budget 79% of the time4
The reality for most firms today, and rightfully so, is that every proposed initiative be accompanied with a cost/benefit analysis. This holds true as well for improvements to the company’s idea-to-launch process. Unfortunately, a detailed cost/benefit analysis is time consuming and expensive. This article outlines a few quick yet effective ways to establish whether your process has room to improve as well as some ways to quantify the potential benefits.
In today’s high pressure innovation environment, many companies continue to evolve their Stage-Gate process. The latest version, dubbed Nex Gen™ Stage-Gate (4th Generation) by Cooper and Edgett, is rapidly becoming the new standard as companies leverage experienced gained since the wide-spread adoption of 1st generation Stage-Gate. (For more information, see their popular book Lean, Rapid, and Profitable New Product Development).
How to Estimate the Potential of Improving your Process
If you are wondering if your process could be improved here are three simple and inexpensive ways to make a quick assessment:
- Benchmark your Idea-to-Launch Process against the world’s best
Dr. Cooper and Dr. Edgett make it very easy for companies to evaluate how their process measures up against the critical drivers of performance as well as the top performing businesses. You can complete an online assessment in less than 30 minutes and receive an instant report. Working with the most reliable and trusted source of benchmark information available, the report pinpoints specific strengths and weaknesses making it easy to establish a plan of action to improve only those parts of your process that warrant intervention. For more information about real-time, immediate benchmarking, click here.
- Check your Idea-to-Launch Process for Cooper’s 10 Proven Drivers.
The majority of mediocre processes simply fail to embed these critical success factors into their idea-to-launch process in practical ways so that all of the players using the process – decision makers and teams alike – actually use it. Complete this abbreviated checklist included in this article, or better yet, obtain the best-selling book Winning at New Products: Creating Value Through Innovation, 4th Edition, where Dr. Cooper defends these drivers with compelling research data and charts.
- Check your Idea-to-Launch Process for NexGen™ Stage-Gate’s
If your organization is trying to get to the next level then perhaps it is time to incorporate some of the best practices identified in NexGen Stage-Gate. Compare your organization to this abbreviated checklist included in this article or obtain their popular book Lean, Rapid, and Profitable New Product Development for the full experience.
Four Ways to Calculate the Potential Benefits of Improving Your Process
An excellent way to achieve the necessary buy-in and support to successfully undertake an Idea-to-Launch improvement project is to ‘make the case’ for taking on such an initiative. Each organization has unique performance objectives and as such one metric or calculation does not fit all needs. Here are four ways to ‘guesstimate’ the potential benefits of improving your Idea-to-Launch process. Experiment with any of the following quick-calculate methods – as these approaches are simplified and therefore require minimal data and effort to calculate.
- Improved Success Rates.
Top performing businesses use a high quality Stage-Gate process to drive higher new product success rates – achieving success 79.5% of the time. Their success rates are 2x higher than that of average performers and 3x higher than that of the bottom 20% of businesses. How much does your company stand to benefit if 80% of the projects which enter into your development stage launch successfully into the marketplace compared to your current rate of success today?
The accepted norm is that time-to-market has improved by about 35% over the last decade. Has your organization realized similar improvements? How much does your company stand to benefit if you accelerated each of your projects’ time to market by 35%?
- Profit Objectives.
According to a recent research study conducted jointly by Dr. Robert Cooper, Dr. Scott Edgett and the American Productivity and Quality Center, top performing businesses that use a high quality stage-gate process achieve their profit objectives 77% of the time compared with average performers that achieve at best, a 50-50 hit/miss rate. How much does your company stand to benefit if you can improve your ability to meet your NPD profit objectives close to 80% of the time?
- Better Project Management Results.
Top performing companies rely on a high quality stage-gate process to reduce the complexities of navigating new product development for the first time for each and every project they undertake. As a result the top performing businesses’ projects are on time 79.4% of the time and on schedule 79% of the time. The average performer achieves, at best, a 50-50 on-time, on-schedule hit rate. Multiply the impact this improvement could have by the total number of projects you undertake on an annual basis!
Benchmarking – The Logical Next Step.
The quickest, most reliable and least expensive way to improve your process is to leverage benchmarking tools. Benchmarking your process is an excellent way to gain buy-in and support for change, especially when you involve the people expected to lead the change in the benchmarking process. The first step to better performance is to understand where the opportunities for improvement exist and gain consensus. The key to gaining consumers is the quality and credibility of the benchmarking tool you select. Select a benchmarking tool, which is designed, tested, peer-reviewed, and draws from a large sampling of high quality companies across numerous industries. An example of this is Benchmarker™- an instant, online benchmarking service designed by Dr. Cooper and Dr. Edgett. Get started online today!
1 Best Practices in Product Innovation authored by Dr. Robert
G. Cooper & Dr.
Scott J. Edgett with the American Productivity and Quality Center, 2003)
2 Comparative Performance Assessment Study by Dr. Abbie Griffin, 2004)
3 Best Practices in Product Innovation authored by Dr. Robert G. Cooper & Dr. Scott J. Edgett with the American Productivity and Quality Center, 2003
4 Best Practices in Product Innovation authored by Dr. Robert G. Cooper & Dr. Scott J. Edgett with the American Productivity and Quality Center, 2003
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.
Michelle Jones is the Executive Vice President and Chief R&D Officer of Stage-Gate® International (SGI) and is a speaker, author and consultant on the topic of product innovation. She leads the commercialization of some of the world’s best practice research on product innovation into products and services for companies striving to achieve innovation excellence. Her portfolio includes strategic partnerships, product management and marketing and R&D.
Michelle has worked with an impressive portfolio of companies and has over 20 years of experience across several industries including Aerospace, Automotive, Chemical, Consumer Packaged Goods, Defense, Electronics, Energy, Food, Financial, Medical and Pharmaceutical. She has led numerous large-scale and complex engagements for product innovation programs, spanning from Discovery and Stage-Gate Models to Strategic Portfolio Management, to success.