This content relates to : New Product & Service Development
Robert G. Cooper
McMaster University
Hi there, it’s Bob Cooper and I’m going to be talking for the next few minutes about StageGate, which is a system I developed, which is on the screen now, which it was designed to drive new products from the idea stage on the left, all the way through the launch and beyond, not shown to the right. Now, a lot of people ask me, where did StageGate come from? And good question. When I was a very junior professor, freshly admitted PhD, I tried to apply for a research grant from a government person and went to their office, made a special trip.
And they said, you know, what we really would like you to do is do a lot of stories of successful entrepreneurs and innovators within corporations. And I said, well, I’m not a journalist, you know, and they said, well, write the stories. And I said, I don’t like writing.
I’m a quantitative, I’m an engineer, a quantitative guy. I’d like to do scientific type research. And the guy looked at me very frankly and said, do you want the money? I said, yeah.
He says, write the friggin’ stories. So with that, I left his office and made a commitment to go and interview people about successful entrepreneurs. And one of the first companies that I interviewed was in the Syracuse area.
It was actually GE at their at their Schenectady labs. And one of the more senior people that ran the operation of a venture capital and venturing out, this was a very senior guy, David Van Daniel. He sat me down and he basically said, you know, Bob, you’re studying how companies do new products.
I’ll tell you, the whole new product process is nothing more than a series of information gathering activities designed to fill knowledge gaps, to reduce uncertainty and thereby manage risk. You can view it as an information process. And as I drove back home that night, I was in a car and driving along rather fast and got a speeding ticket.
I’ll never forget that for doing 90 in a 60 zone in New York, thinking very, very heavily about the message he gave me. And lo and behold, that laid the foundation for StageGate. So this is the StageGate process that we know today with the various steps and stages.
And it’s been written about and talked about in various articles and books, etc. It is the most popular idea to launch system right now, according to the PDMA, most recent best practices study done by Knudsen et al. in 2023.
It’s used by more than half the companies globally for physical new products, not the IT products. IT is a whole different world. But for physical new products from food and beverage to the heavy chemicals, to the machine tools, StageGate process, more than half the companies globally use that.
So basically, following what this gentleman told me, I went back and looked at what StageGate is. It is an information gathering process, whereby you do some work. The new product process is an information gathering process.
On the left, a project team goes out and gathers information by doing a number of tasks. An example might be do a market research study of potential users, or technical people might do a laboratory test of the product. And then the next step, the next box here, the project team integrates and analyzes the data they’ve gathered.
And they use that information to fill knowledge gaps, to validate assumptions, to test hypotheses, et cetera. And basically, by reducing uncertainties and by validating hypotheses and validating key assumptions, they mitigate risk or manage risk. Risk being the product of high degrees of uncertainty and large amounts of money at stake.
At the end of all of this analysis, they prepare some reports, often called deliverables, hopefully short and sweet, a couple of pages, which they present to, and this is an interesting thing, a gate. And a gate is a management review point, not unlike that television show, Shark Tank, where entrepreneurs are presenting their projects to a team or a panel of experts to get a go kill or thumbs up, thumbs down decision. So management then looks at the project team making their presentation and say, we like what you’ve done and we like your project, we’re going to invest and we’re going to give you the necessary resources, that means money and people, to move through to the next stage.
So this is a series of buying of options. In other words, they’re buying options on the project and thereby mitigating risk. This is essentially an information model designed to reduce uncertainty to manage risk.
That’s all StageGate is. Lots of people think it’s a project management tool. No, no, no, no.
It is an investment model, which happens to build in a number of key activities. Now, as I said, StageGate’s evolved quite a bit over the last years and this is a more modern version of StageGate, last couple of years, although some of these changes started to be made as many as 20 years ago. And basically companies have built in flexibility, they’ve built in agility, and they’ve built in some elements of lean from the philosophy of lean Six Sigma often used on the factory floor.
That’s a process by which you remove unnecessary work, wasted work, bureaucracy, etc. Because a lot of project teams rightly so complain about a lot of bureaucracy in their companies, having to do a lot of make work. And so some of the things we see is it’s a lot more flexible process today.
There’s multiple different versions of StageGate. There’s StageGate Lite for small projects and StageGate Medium for medium-sized projects and StageGate TD for technology development, science or research projects. So there’s all kinds of StageGate projects.
There’s even StageGate models. There’s even StageGate for AI development. These nice circles up here, these green circles are basically iterations whereby you build something, you take it to the lab, you take it to the customer, you test it, you get feedback, and then you go back and rethink your proposition or your hypothesis.
And people have been building these iterations in all the way through build and test and revise, build, test and pivot, whatever you want to call it. Some people even do iterations between stages. In other words, they’re into the next stage, they suddenly realize their hypotheses aren’t working out, so they got to iterate back to the previous one.
That’s a bit of a tough call for the project team. So this is a more modern version. Now, in the last 20 years or so, the Agile, the software world in Palo Alto, California has been emphasizing a new approach to software development called Agile development.
If you haven’t heard about it, you probably should get into it. This is the predominant method, according to the PDMA, that software products are now developed by. And Agile basically preaches that you do a lot of these iterations, but you do them very quickly.
In fact, in the Agile world, in software development, these iterations are typically two weeks long. In other words, you have a hypothesis, you write some code, you test it with customers, you test it in the lab, do alpha tests, and you could potentially release something or release 1.1 at the end of two weeks. Very, very rapid iterations.
And this circle on the left is the artist’s rendition of what a typical iteration looks like. These guys call, in California, they call these sprints rather than iteration. And each sprint has a planning meeting, then you develop something, you test it with customers in the lab, et cetera, and then you do a demo to management and then a retrospective analysis saying, well, what do we do next? Now, StageGate has incorporated elements of Agile into it.
And now the new system is called Agile StageGate. It has stages and gates. And in the stages, people are building in these Agile sprints.
So there’s another gate, and this is the concept phase. And we have a number of sprints. Now, I can’t show them all because of space limitation.
Build the business case, a number of sprints. And of course, during development, there’ll be multiple sprints between development and testing. Validation would be the final test of the product.
This would be the field trials, the production test or production trials, et cetera, before launch. Usually towards the end of the new product process, you’re not doing too many sprints. By that point, hopefully, most of the information is known.
But certainly, for the earlier stages and the middle stages, people are doing a lot of sprinting. Now, the sprints are typically longer than two weeks because you can’t come up with something in a physical product in two weeks to demo to anybody. So companies like DuPont, Corning, the glass business, Honeywell, and Controls, at least for their hardware products, are typically doing one to three-month sprints.
So every month, they come up with something and they test, come up with something and they test, and then move on. Very, very different process than we saw, say, 20, 25 years ago. So that’s a quick look at Agile and StageGate and how the two combine.
By the way, there was a large study done in Germany, and that particular study found that 100 percent, this is across all of Europe, but 100 percent of the physical product firms, they labeled as good practice, meaning the high performance, 100 percent of them, that were using Agile, were using Agile sprints between the traditional process gates, i.e., within the stages. These are the good practice companies, and these are the average companies. Take a look at what you’re seeing.
But they’re all building, if they have a gating process like StageGate, and many of these larger companies do, these are typically larger companies in Europe. They’re building Agile into the stages of the StageGate process. So we have this new model.
It’s a hybrid model, Agile-StageGate, which moves very, very well and very effectively. So that’s a quick look, ladies and gentlemen, at what StageGate is, a little bit of where it came from, and where it’s heading, in other words, into this world of flexibility, agility, and lean. Thanks very much.
Hope you enjoyed that.
Author:
Robert G. Cooper
Professor Emeritus, McMaster University
https://experts.mcmaster.ca/display/cooperr
To learn more, read:
https://snyder.syracuse.edu/want-to-augment-a-products-aesthetic-design-use-machine-learning/