Using Stage-Gate to Enable Digital Transformation Success

Most organizations today have at least one, if not several, ‘digital transformation’ initiatives underway. What was considered leading edge but 5 years ago is fast becoming an exercise in survival. Recent polls indicate that 70%+ of US based companies plan to introduce a new digital technology platform, digitize their products (i.e. physical,  software, and hybrid) or digitize their innovation management processes. As expected, some organizations are succeeding while other are struggling. What are successful organizations doing differently?

Stage-Gate International has been helping organizations digitize their innovations and their innovation management processes for 12+ years through an open software certification program launched in 2007 called Stage-Gate Ready (digital technologies certified by innovation experts). This article demystifies digital transformation and examines what a successful journey looks like when you use the Stage-Gate Framework, its Innovation Maturity Model & its culture change-enabling principles to manage the three most common types of digital innovation initiatives.

Over the years we have learned what works and what doesn’t when it comes to digital platforms and digitizing products and their development processes. As a result, we have shaped what is considered the ‘emerging dominant Stage-Gate Framework’, also known as Stage-Gate 5G (Fifth Generation). Companies with Stage-Gate 5G capability have successfully transformed their innovation portfolios and in advanced cases such as Corning, 3M and PepsiCo, have transformed their organizations in the process1.

About the Authors

Michelle Jones

Michelle Jones is Chief Research, Development and Learning Officer. She solves innovation management problems that require unique solutions and leads research that brings value to the Stage-Gate users. More.

Colin Palombo

Colin Palombo is Group Head, North America and Chief Consulting Officer of Stage-Gate International, and a visiting Professor of Innovation of Strathclyde University, Scotland. Colin helps clients improve results with best-practice innovation governance, processes and software. More

Scott Edgett

Dr. Scott Edgett is internationally recognized as one of the world’s top experts in innovation management. An author, high-profile speaker and executive advisor, he is the pioneer of innovation portfolio management and the Innovation Performance Framework for executives. More

Digital Demystified

Welcome to the fourth industrial revolution, aka Digital Revolution or Industry 4.0. A transition that began in 1975, continuing through present-day, reveals an exciting marketplace capitalizing on a wide range of emerging digital technologies including; mobile, artificial intelligence, machine learning, big data, additive manufacturing, digital twin, cloud, cognitive computing, connectivity and more.

As new as this phenomenon seems, three other such revolutions have occurred prior to this one, each with similar periods of rapid developments applying emerging technologies in pursuit of creating new customer and company value.

Traditionally, companies have looked to their R&D organization to lead and navigate the exploration and commercialization of new technology.

This is still true today, but is more complex now as many digital technologies also promise benefits to function-specific processes in Sales, Marketing, Engineering, Manufacturing, Production, Operations, Finance, Project Management and so on. The simultaneous interest by all functions makes the ‘digital transformation journey’ a real team sport as numerous seemingly disparate projects are connected and advancing the same organizational goal: accelerate value creation (for customers and the company) by leveraging digital technology (aka digital) through continuous innovation.

Three Types of Digital Transformation Initiatives

Embracing and managing the plethora of digital technologies can be overwhelming, especially for non-technical managers. However, if you examine closely, a pattern appears, making it easier for the innovation leader to strategize, manage, support and in many cases, lead their company’s digital transformation. Innovation leaders can provide much needed organization, direction and guidance for three types of digital initiatives:

1. Digitize Products & Services

Organizations continue to find new ways to apply digital technology to their core product and service offerings to create new value for their customers (think smart, connected products and digital-based service experiences). This type of initiative is of particular interest to the Business Unit leaders as they are accountable for short to medium term revenue growth and for maintaining a competitive market position.

The most common mistake we observe with companies pursuing this type of initiative is their failure to update the product innovation process with the newly participating software development function’s work stream activities. Many companies lost valuable time debating whether the incumbent Stage-Gate process should be used or the new function’s Agile process. The answer is YES. Stage-Gate is a function-neutral business process that coordinates all of the functions and their respective practices while bringing visibility and oversight to the innovation pipeline. This enables a company’s leadership team to manage innovation strategically. Whereas Agile is a collection of development and project management practices used in software development.  If you are going to digitize your products, you must roll out the welcome mat to your newest contributing function, software development, or supply partner if you choose to outsource.  Stage-Gate 5G reflects the ideal combination and balance of both2.

2. Digital Technology Platforms

Organizations can create a significant competitive advantage by establishing unique digital platforms that enable new lines of differentiated products and services. Examples include online business models or digital channels, additive and AI-supported manufacturing processes, e-learning for JIT distribution and sales support, etc. Successfully completing these types of initiative itself does not generate new revenue. However, the products and services made possible because of the new platforms do generate new revenue.

It is important to bring visibility to this portfolio of digital game changers so business leaders can get behind the technology, sponsor its development and plan strategically to leverage it in their lines of business. Too often, these projects are managed in isolation and ‘unveiled’ far too late, making it difficult to sufficiently ready the organization to embrace and align to the new technology and successfully manage the impact of the change on their operations and on their customers. This type of initiative is of particular interest to the Chief Technology Officer (CTO) or Head of R&D as they are accountable to sponsor medium to longer-term revenue growth and to create new organizational capabilities and competencies that provide lasting, competitive advantage. However, as noted earlier, as every function is exploring the potential of digital technology, some department-led ‘digital’ projects may actually qualify as new platforms.

The most common mistake we observe by companies pursuing this type of initiative is their failure to apply a best practice innovation process to this particular class of innovation. Many companies simply fail to recognize the technology as a platform opportunity when it is an early concept idea. As a result, many digital platform projects are mismanaged: they struggle through development, exceed timeline and budget targets, lack organizational buy-in and do not achieve their potential or performance goal.

The Stage-Gate Technology Development process is purpose-built to guide new platform development projects. Companies using Stage-Gate TD more easily recognize these important opportunities and manage them accordingly and successfully. The Stage-Gate Technology Development Model was first introduced in 2007 by co-founder Dr. Robert Cooper with Exxon Chemical Research and Development to de-risk new-to-the company and develop new-to-the-world technology-based platform projects3.  Management desired one common framework to manage all

projects strategically, but recognized the importance of adapting Stage-Gate to the unique context of each project class. Therefore, a Stage-Gate Model was adapted for the Technology Development project class:

– Emphasis placed on early, experiment-based Stages designed to accelerate learning where no previous in-company knowledge existed. When one cannot draw upon existing knowledge to design a solution, several small experiments can accelerate learning.

– Emphasis placed on non-financial Go/Kill criteria including strategic impact, technical feasibility, and potential to open new windows of opportunity, in recognition that the new technology platform itself does not directly generate revenue.

– Introduction of the Applications Pathway Gate, a strategic investment decision and point of alignment, as platforms can significantly change the company and competitive landscape.

Broader buy-in is critical to enable speed. The cross-functional team of Gatekeepers evaluate the de-risked technology and its platform potential (i.e. its numerous applications). Priorities are road-mapped and the new product, service or process projects enter their appropriate process pathway.

Stage-Gate 5G de-risks new digital technologies and accelerates platform time to profit by routing derivative projects to the right pathway of process rigor right sized to project class risk.

3. Digitize Innovation Management Processes

The earliest form of digital transformation is the continuing effort to move each department’s work processes and productivity tools into software applications. These tools can enable a more streamlined, data driven, connected information sharing and decision-supported experience. Additionally, some processes perform best when they span multiple departments across the business (i.e. enterprise-wide), allowing for cross-functional, team-based collaboration.  Innovation Management is one such process. The entire Innovation Management Framework can be supported efficiently and effectively with software that has the right enabling technology: communicate strategy, capture ideas, support the collaborative process of idea to launch communication and deliverables, enable prioritization decision-support for Gate meetings, resource allocation/assignment, and display project data in visual portfolio views to monitor strategic progress.   This type of digital initiative is of particular interest to Heads of Innovation as thety are accountable for innovation results. It is also of interest to Chief Information Officers (CIO) as they are accountable for optimizing operational efficiency (cost savings) and information decision-support effectiveness.

The most common mistake we observe with companies pursuing this type of initiative is failure to look beyond the bells and whistles of the technology itself to manage the project as a change initiative to transform the way you manage and execute innovation. Far too many organizations’ product innovation efforts have degenerated into mechanical form-filling and box-checking data entry after implementing software. The digitized innovation process should enable excellence not inhibit it.

To date, more than 500 companies have successfully digitized innovation through the Stage-Gate Ready Certification Program4.  Some of the most successful implementations used an adaptation of their own Stage-Gate process to guide their way. They conducted a Scoping Stage to discover available software solutions and short-list the best vendors. They then went on to conduct a Business Case Stage to evaluate vendor options and confirm the cost benefit for financial and user satisfaction. They used Gate 3 ‘the Money Gate’ to gain full cross-functional buy-in and funding for to the project and the anticipated changes to the way they managed innovation. They conducted a Development Stage to design improvements to their innovation process and held a Design Review to validate its high-quality design capable of driving better performance results before configuring it into the new software.  Agile project techniques proved useful to break this stage down into several smaller sprints. They conducted the Scale-Up Stage by stress-testing the functionality in each user area to confirm all was ready for a full rollout, with user acceptance and ease of adoption high on the list of success criteria. Careful consideration was given to not disrupt or delay new product projects that were on the verge of launching. They were exempt from participating. Finally, a proper Go-Live (Launch) Stage equipped fully with change management and implementation support was executed ensuring a seamless introduction of the new innovation process with enabling software technology. A few months post launch, these companies were disciplined in performing a Post-Launch Review to confirm that they had indeed delivered what they promised in the business case. If there were variances, as there often are, they were well understood and learnings shared so they could be applied elsewhere in the company.

5G builds on Stage-Gate’s classic, incremental, alignment-building techniques proven to manage successful change. Additionally, it incorporates change techniques that enable digital transformation.

“We want to do the right projects, and we want to do them right. Right Projects Right. The Stage-Gate Innovation Performance Framework helps us to do just that.”

Implications for Innovation Leaders

The Digital Revolution has already sparked a tremendous transformational change in the print media, automotive, travel, music, retail, financial, software and manufacturing markets.  This has in turn, sparked change in most organizations by now in the form of evolving business strategies and/or the pursuit of the three types of digital transformation initiatives.  Many polls confirm that most business leaders agree that the rate of change occurring within their organization today is far greater than in previous years. Unfortunately, for many, their focus on the technology itself and/or on agile project management alone has not provided sufficient, systematic oversight or change management support to ready the organization for successful transformation.

  • An increase in the number, type and complexity of projects, but a lack of visibility across all to manage strategically
  • More projects competing for limited resources, but a lack of effective allocation and prioritization
  • Too many similar projects ‘starting from scratch’, a need for a reliable process or roadmap to act as guardrails
  • Misalignment across leaders and functions as strategies are changing rapidly and as functional workstreams change and impact cross-functional collaboration.


Stage-Gate Innovation Performance Framework

Organizations that have committed to continuously evolve their Stage-Gate Innovation Performance Framework from 1st Generation to current 5th Generation are now using it to successfully digitize their products, platforms, portfolios, and their innovation processes. In some advanced cases, they are transforming their organizations.  You can prepare your organization to significantly move the performance needle by maturing your Stage-Gate capability in the same way.

Stage-Gate 5G integrates the 4 drivers of proven innovation performance along with advanced change management and agile project management practices. An organization that has the discipline to apply the framework is offering their leaders, functional departments and teams a proven, best in class method of working collaboratively to bring about successful innovation.

One Common Framework & Language
Stage-Gate is a function-neutral business process designed to accelerate value creation within an organization. It coordinates each function’s contribution via their respective best practices, from idea to launch, while bringing visibility and oversight to the innovation pipeline. This enables a company’s leadership team to manage innovation strategically, while teams execute innovation internally or with external partners, tactically.

One Model Flexibly Applied
The versatility of the Stage-Gate Innovation Performance Framework enables it to scale by right-sizing process rigor to project context and risk.  This enables organizations to manage a diverse portfolio of innovation projects in a similar way while specializing and adapting at the tactical level with each class of project.

Rapid Learning
Organizations become better and faster at surfacing the most meritorious projects and accelerating their successful development and launch because Stage-Gate itself develops the organizational capability for rapid learning and adjustment. At the project level, teams learn by applying their new knowledge to a series of mini experiments and adjust accordingly in their search for the winning innovation.  At the company level, learnings from each project’s success or failure is  captured and is retained within the process to reflect ‘organizational memory’ for other projects to benefit by.

Stages and Gates isolate the meaningful metrics necessary to visualize projects as a pipeline or in a portfolio view. This visibility enables senior leaders to monitor the progress of all projects so resource allocation decisions and project prioritization can occur dynamically at Gates or quarterly reviews and reflect the business strategy.

High Performance Teams
The cross-functional nature of each Stage and Gate draws in the necessary expertise and experience needed to develop winning, highly differentiated offerings in a highly collaborative environment.

Stage-Gate accelerates performance through a variety of speed-enabling practices: a documented process path to guide projects of similar class so they never start from scratch, a preliminary risk assessment and classification so projects receive the right amount of process rigor for their risk level (never over or under managed), by focusing on high value activities that shape and define the winning product definition up front and by doing so cross-functionally in the Stages and at the Gates to build alignment across key stakeholders.

Risk Management
The incremental investment model via each Gate together with project selection transparency and risk-reducing information deliverables gives business leaders and team’s confidence to take calculated risks inherent with more venturesome projects.

Stage-Gate 5G builds on the best Agile and Scrum techniques resulting in the ultimate, balanced framework to drive innovation performance within medium and large organizations.  Sprints within Stages creates a shorter-term, team-based bias for action whereas the project management practices brings visibility and organization to team-based work efforts.

Transformational Change Model
The alignment-building Stages and Gates, the gradually expanding team, the early requirement to justify the case to proceed and the empowering and engaging team activities for customers and the internal organization alike, all set the stage to ready the organization to support change and innovation.

Digital Transformation Model
Stage-Gate gives business leaders and teams the confidence to pursue digital technologies that the company is not familiar with yet because it lays out an alignment-building process of discovery. The business leaders participating at the Go/Kill decision Gates and the teams participating in the Stages are on the same team in search of the same goal. Surface the best digital opportunities, de-risk the technology and accelerate it application so both customers and the company create new value.

Next Steps: Getting Your Organization to Stage-Gate 5G
Enable your organization to significantly ‘move the innovation performance needle’ by evolving your Stage-Gate Innovation Management Framework to next generation.

Start by plotting your company’s current maturity using the Stage-Gate Innovation Performance Maturity Model.

  • What generation is your Stage-Gate design (y-axis)?
  • How proficient is your organization’s adoption (x-axis)?

Using Stage-Gate to Enable Digital Transformation Success
Embracing and managing digital technologies can be overwhelming, however, if you examine closely, a pattern appears, making it easier for the innovation leader to strategize, manage, support and in many cases, lead their company’s digital transformation. Innovation leaders can provide much needed organization, direction and guidance for all three types of digital initiatives by adopting the Stage-Gate Innovation Performance Framework or by committing to mature your current generation Stage-Gate framework. Contact authors [email protected] or [email protected] to learn more and to help your organization get started.

References and Notes:

  1. Annual Stage-Gate Summit Case Studies. Presentations by Corning, 3M + Pepsico 2010-2018.
  2. Robert G. Cooper and Anita Friis Sommer, “Agile Stage-Gate for Manufacturers”, Research-Technology Management”. Research-Technology Management 61:2, Mar – April 2018, pp. 17-26.
  3. Robert G. Cooper, “Managing Technology Development Projects” IEE Engineering Management Review. Vol 35, No 1 First Quarter 2007, pp. 67-76
  4. Michelle Jones and Dr. Scott J. Edgett, “Ten Tips for Successfully Implementing a Stage-Gate Product Innovation Process”, Stage-Gate International, 2013
  5. Michelle Jones, “Stage-Gate: The Quintessential Decision Factory”, Stage-Gate International, 2019
  6. Michelle Jones, “Stage-Gate Agility Plus 3 Agile Hacks Worth Considering”, Stage-Gate International, 2018
  7. Robert G. Cooper, “What’s Next? After Stage-Gate” “What’s next? After Stage-Gate” Research-Technology Management, Vol 157, No. 1, Jan-Feb 2014, pp 20-31
  8. Peter H. Diamandis and Steven Kotler,” Bold: How to Go Big, Create Wealth and Impact the World”, Exponential Technology Series Paperback, Feb. 2016
  9. The Stage-Gate”® Ready Certification Software Program. See


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