the Brooklyn Academy of Music

PC | November 2007

A Stage-Gate Process for

A little bit about BAM

Located in Brooklyn, NY

BAM is a not-for-profit organization

First performance in 1861

Facilities include Opera House, Theater, BAM Rose Cinemas (including BAMcinématek), BAMcafé and BAMshop

Recognized internationally as a preeminent, progressive cultural center with a ticket buying database of 250,000 people and an average atendance capacity of 85%

BAM faces some challenges

Audience overall is getting older

Location is removed from the main theater circuit

New entertainment competitors

Fundraising no longer in vogue

BAM embraces innovation

Renaissance started in 1967 under Harvey Lichtenstein

Lichtenstein installed the Next Wave Festival 25 years ago – a festival that brings together New York City’s most adventurous performers (music, theater and dance) and most curious audiences every year

But what is innovation?

“One way to arrive at a useful definition is to rule out what innovation is not. It is not invention. (...) These days much innovation happens in process and services.”

The Economist, October 13th, 2007

BAM needs innovation to

Attract newer and wider audiences

Promote their performances more effectively

Assist customers in buying tickets and getting to the venue

Convince customers to come back

…and become lifetime BAM members

BAM needs a process for innovation

The average ROI for successful new products is 96.9 percent, with average payback period of 2.49 years.

Sounds good?

For every seven new product ideas, about 4 enter development, 1.5 are launched, and only 1 succeeds.

Winning at New Product, Robert G. Cooper

BAM needs to shoot for the winning idea every time.

The Stage-Gate process

A process to support the selection and development of the best products for BAM to achieve its goals(right now and in years to come)

Objective is to create products that

Provide unique features for our audience

Beat competition

Confirm high quality of delivery

Reduce audience’s obstacles in joining BAM

Confirm BAM’s legacy of innovation and novelty

The Stage-Gate process covers

Programs

Services

Tools

The Stage-Gate process doesn’t cover

Performances

The Stage-Gate process contributorsExecutive ManagementBAM StaffBoard of TrusteesPatrons“Friends of BAM”General AudienceArtists, ProducersCommunity, Neighbors

The Stage-Gate process evaluators

Executive Management: Managing DirectorBAM Staff: Creative DirectorBoard of Trustees: Head of Marketing Committee

The Stages and Gates

The Stages and Gates

Set-UpOrganizational Goals

Business Unit Goals

Strategic Direction

Establish Criteria

IDEA BANK

Stage 1

DiscoveryInternal Assessment

Stakeholder interviews

Board discussion

Survey of active members

}Gate 1Filter ideas through ourpre-establish broad criteria(items that define the

mission,vision, goals and objective for this product)

Stage 1

“Firms have too many ideas and too much emphasis on creativity—more ideas merely choke the funnel even

more.”

Harold Sirkin, Boston Consulting Group, co-author of “Payback” (book on innovation strategy)

Stage 2

Research & StrategySurveys, focus groups

In-venue questionnaire

Competitor analysis

Community, neighborhood

}Gate 2Filter ideas through asurface evaluation(a gentle scan against specific criteria: potential, risk, legal,compatibility, fit, barriers,

etc.)

Stage 2

“Firms need really harsh discipline to weed out ideas quite quickly.”

Niklas Savander, Nokia

Stage 3

ScopeAction Plan

Recommendations

Timeline, budget, staff

Funding options

}Gate 3Detailed evaluation(in-depth review of ideasand commitment needed)

ONE idea is selected

Stage 4

DevelopmentFundraising, sponsor recruit

Engage vendors, consultants

“Friends of BAM”

Brainstorm, mission, tactics

}Gate 4Review of development(In line with vision, mission and goals? Did we developthe product that passedthe in-depth analysis?)

Stage 4

“Like a dog with a bone, people don’t want to give them up.”

Mark Little, GE’s head of research

Stage 5

TestingFocus groups

VIP members/Board dry run

Soft launch }Gate 5Validation of Testing(Right questions, design?Skewed? Neutral referees?)

Stage 5

“Innovation is a loser’s game, as we know most initiatives fail. But the truly innovative companies

know how to deal with losing.”

Ron Adner, INSEAD

Stage 6

Production StageFull production

Launch

Promote }Post-Mortem StageReview of what’s been

learned(Did we fulfill the originalcriteria? Costs? Profit?

Team?Strengths/Weaknesses?)

Stage 6

“A crisis is a terrible thing to waste.”

Vinod Khosla, founder Sun Microsystems

Stage-Gate Recap

A process to Formalize a new system

Consider different viewpoints

Evaluate financial commitment

Speed up decisions

To result inQuality products

Direct dialogue with customers

Overcome competition

Increase donations

Thank You