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WINNING AT NEW PRODUCTSPresented by: Dr. Robert G. Cooper
April 7, 2020
WEBINAR
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Winning at New Products
ISBM Webinar April 2020With: Dr. Robert G. Cooper
Creator of the Stage-Gate® SystemISBM Distinguished Research Fellow, Penn State
University, USA.Professor Emeritus, McMaster Uni, Canada
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How Businesses Perform In NPD
Percent of Businesses0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
38.0%
27.5%
9.0%% of Revenue Coming
From NPs
77.1%
56.0%
26.9%% of Projects That Meet
Profit Objectives
Bottom 20% Performers
Average Business
Top 20% Performers
79.4%
20.5%
51.1%Projects On Schedule (%)
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Critical Success Driver #1
A unique, superior product – a differentiated product that delivers unique benefits and a compelling value
proposition to the customer
‘Me-too’, ho-hum, copy-cat, tired products –tweaks, modifications, extensions – dominate development portfolios
Too many ‘little ideas’ – renovations
The “techies” building a monument to themselves
Technically driven, no market inputs
Finding big needs & major customer problemsDeveloping big solutions that are unequalled
The goal must be for real product advantage
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Critical Success Driver #2
Assumptions masquerading as factsFailures usually the result of weak ‘front-
end’ activities
But little time & effort are spent here – no time, no budget
The homework doesn’t get done
Doing the homework & front-end loading the project is key to success – due diligence pays off!
Answers to key questions early:• Can we make money here? • Who is the target customer?
• What should the product be? • Can it be developed & produced? • At the right cost? How?
Screening, market & customer analysis, tech feasibility, build business case
Steps that precede Development are vital
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Critical Success Driver #6: FOCUS
Most firms have too many projects and too few resources to do them!
Why? … A failure to focus
We want ‘funnels’… not ‘tunnels’Ø Begin with many solid conceptsØ Successively remove the poor ones
Fewer but better projectsPick your NPD projects carefullyImplement an effective Portfolio Management
SystemNot all project are winners
Be tough & selective
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Top management commitment, leadership & support10The right climate & culture for innovation9
Adequate resources – people & time8Quality of execution end-to-end7
Robust up-front home-work – front-end loaded6Effective cross functional teams with power5
Products with a compelling value proposition4Sharp, early fact-based product/project definition3
Voice of customer at every stage2Focus – learn to drown some puppies1
The Key Principles of Stage-Gate
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Stages in the Stage-Gate® System
Idea Successful Product
Idea Successful ProductStage 1
Small teamSmall $
Stage 2
Larger teamMore $
Stage 3
Full teamCommit $
New Product Development
Team
Breaks the I2L process into a series of manageable and simple stages with increasing resource requirements
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Gates in the Stage-Gate® System
PLR
Post Launch Review
Discovery: Idea
Generation
Gate 1
Idea Screen
Stage 1: Concept
Gate 2
Concept Screen
Stage 2: Build Business Case
Gate 3
Go to Development
Stage 3: Development
Gate 4
Go to Validation
Stage 4:Validation
Gate 5
Go to Launch
Stage 5:Launch
q Each stage is preceded by a Gateq Gates = Decision Points or Go / Kill Points
q Gates are where projects get resources & are prioritized – get on management’s radar screen
q Gates are the quality control check points in the process
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Prescribed List of Deliverables
n Decision: Go/Kill/Hold/Recycle
n Action Plan Approved
GATE
Gatekeepers
Decision Criteria
Ø Provide the key information to the gate needed to make the right decision… efficiently
Decision based upon…• Readiness check on
deliverables• Business rationale good• Action Plans OK & resources
available for the Team
Gates Are the Go/Kill & Investment Decision Points in the System
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1. Accelerating: How to “Lean” Your Stage-Gate System Remove Non-Value Added Work!
Many idea-to-launch systems build in too
much
• Long lists of required tasks & activities per stage• Lengthy deliverables lists, many templates to be
filled out
Result of Process Design by Committee
• Each committee member with an agenda of things to be built into the system
• Different departments – from Legal to Finance – each write the requirements
Most Stage-Gate processes over time become far too bulky
• Is all this really needed?
If it doesn’t add value, why are you doing it? Why is it in your system?
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Example from Danfoss. Note reduction in cycle time by 50% by using “lean” and “continuous improvement” methods: 2010-2014
Improvement:3.5-4 years time-to- market decreased to 1.5-2 yearsTTM metric: Gate “M0” (prelim business case) to launch
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Make Your I2L System Efficient – No Waste
q Focus on the Value StreamØ A value stream is the connection of all the process steps with the
goal of maximizing customer value*
Ø In NPD, a value stream represents the linkage of all value-added & non-value-added activities associated with the creation of a new product
* Source. C. Fiore, Accelerated Product Development (New York, NY: Productivity Production Press, 2005).
RefinedInternal fine tuning & iteration to gel idea
ProjectFormallyOpened- Eroom- leader- scope- deliverables- resources- milestones
PSTor PPMTGo/Kill
Kill
NewProductIdea
PSTor PPMTGo/Kill
Kill
Customer Defined- Specialists- PM- APD/NPD
Internally Defined- APD- NPD- PM
q Remove all waste: Ø Value Stream AnalysisØ Two methods: I & II
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2. Adaptive Spiral/Iterative Development” – Gets the Product Right
Stage 1- 2
Front-End Homework
Gate3 Stage 3
Development
Go ToDevelopment
Gate4 Stage 4
Testing &Validation
Go ToTesting
Gate5
Go to Launch
Product Definition Fixed
Here
• Handles the dynamic information process with fluid, changing information
• Gets the product right
Spiral (Iterative) Development
• Front-end work or homework is done• The product specs are determined, the product
definition is fixed• Development proceeds – the product is developed• Then into Testing… but…
By Contrast: the Rigid, Linear Process
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q They use a series of iterative steps or ‘loops’ Build-test-feedback-and-revise
q They define what information is fixed & reliableq And define what design elements of the product are
fixed versus variable (fluid)q They develop a first very early version of the
productØ A virtual prototype, a model, a “protocept”Ø They test it with the customer, seeking fast feedbackØ Which they then use to produce the next & more complete
version, a crude model or rapid prototype… & so onq Use tools:
Ø Crude modelØ Virtual prototypesØ Rapid prototypesØ SimulationsØ Animations
Smart Teams Practice Spiral or Iterative Development
Get something in front of people! People don’t know what they’re looking
for until they see it.
GE Tests 3-D Printed Turboprop
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VoC User Needs-and-Wants Study
- Face to face interviews
- By entire project team
- With users & customers
- Identity needs, problems, issues, requirements
Full Proposition Concept Test
- A simulated 'sell'- Pre-Development!- With 'virtual prototypes' or 'protocepts'
- And brochures, collaterals, story boards
- And PPT selling presentation
- Gauge: interest, liking, preference & purchase intent
Rapid-Prototype & Test
- Again a test of proposed product
- Early in Development Stage
- Using a rapid prototype, crude prototype, or model
- 3-dimensional & physical
- Again with selling materials
- Gauge customer reaction & purchase intent
Working Model- Much the same…- But versions of product much closer to the 'final product’
- Gauging customer reaction & purchase intent
Next Version- Again much the same as above
- Closer yet to “final product”
Customer Tests- True prototype tests in actual in-use conditions
- Field trials- Beta tests- In-home tests
Gate2
Gate3
Stage 2: Build Business Case Stage 3: Development Stage 4:
ValidationGate
4
Adaptive: Spiral Development – “Build-Test-Feedback-Revise” Iterations
On average: best firms had 5 iterations with customers during Development
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3. Build in Flexibility – Context-BasedTailored to Each Project
• No activity is mandatory• Nor is every deliverable required for every project • Not a rigid list of actions & deliverables
Make the process flexible & adaptive
• They map out their detailed Forward Plan• They propose actions & deliverables
Trust the project team – give them latitude
The Team maps out their detailed Action Plan for the
next Stage
• The Team maps out their detailed Action Plan• They propose actions, timing & deliverables• Plan is approved by Gatekeepers for next stage
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Employ Other Versions of Stage-Gate
Gate1
IdeaStage
Idea Screen
Discovery
Stage-GateLite
Gate3
Stage1 & 2
Go to Develop
Scope & Business Case
Gate5
Stage3 & 4
Stage5
Development & Testing
Launch
Go to Launch PLR
Stage-GateXPress
Gate3
Stage1 & 2
Stage3, 4 & 5
Scope & Business Case
Execute: Development, Test & Launch
Decision to Execute PLR
Gate4
Stage3
Go to Develop
Development
Gate5
Stage4
Stage5
Testing Launch
Go to Launch PLR
Gate2
Stage1
Gate3
Stage2
Scoping Business Case
2nd Screen Go to Test
Stage-Gate(Full)
q Stage-Gate Lite & XPress for smaller projects
q Stage-Gate TD for technology developmentsØ New scienceØ Platform developments
q Stage Gate for Process DevelopmentsØ The factory or plant is “the customer”
q Example:Ø Exxon uses different versions of Stage-Gate for...
• Oil well drilling• Plant expansions and Capex projects• Pipeline construction• Manufacturing improvements• New products• Science projects• Internal IT projects
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• Assumptions that are critical to the success of the project, product design or Business Case
Identify the key assumptions, unknowns & uncertainties
• What information is vital to verify or validate the key assumptions, mitigate risks
Then agree on the knowledge gaps to be filled
• What we need to do to get that information?• What activities (actions)?
Finally determine the key tasks or activities needed in each
stage
5. Try a Risk-Based Contingency Model
Information is one key to reducing riskThe other: a gated, incremental Idea-to-Launch system
Net Result: Each project is custom-tailored, contingent on its unique risks & assumptions
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Corning’s Approach:
Requires highly-skilled project teams“These are very smart people…”
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Another company:The Project Team developing their Action Plan using the Innovation Canvass
And their resulting Canvass with red/yellow/green notes• Canvass drawn across board• Orange notes are Tasks
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6. Try Agile-Stage-Gate – Borrow Agile Methods from Software World
q A sprint is the basic unit in Agile-Scrum:Ø Sprints last 1-4 weeks Ø Are a "time-boxed" (i.e. restricted to a
specific duration) effort of a constant lengthq Each sprint is starts with a team meeting
Ø The Sprint Planning MeetingØ Agree on sprint goalsØ Map out sprint tasks
q Daily “stand-ups” or scrumsØ 15-20 mins to organize each day Ø Set priorities, shift responsibilities, knowledge management, learning
q And followed by a demo & retrospective meetingØ Demo: Where completed work (e.g. a model) is demo’d to stakeholdersØ Retrospect: Where progress is reviewed & lessons are identified.
A daily scrum meeting. This choice of location lets the team start on
time
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Now Used by Manufacturers: Example – Chamberlain
q Uses Sprints & Scrums for physical & IT developmentsq Sprints:
Ø About 2 weeks in length, now 3 weeksØ Must show something physical, the
result of a completed task (not a PPT show, but design drawings, models, etc.)
q Daily scrums, about 20 minutesØ Scrum Master in place
q Project teams have dedicated team members per projectq Only use for larger, major revenue generator projects – about 20% of totalq Working well, 6 years into
Ø Faster to market – by about 30%Ø Gets the product right – fewer warrantee issues, returns
q Problems: Ø Project leader & team loses sight of ultimate goals, just focused on the next 2 weeksØ Sprints initially too short to demo anything
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Customer or User
Project Close
PLR
Ideation
Iterations2-4 weeks
IdeaScreen
Gate 1
Concept
Iterations2-4 weeks
ConceptScreen
Gate 2
Business Case
Iterations2-4 weeks
Go toDevelopment
Gate 3
Validation
Iterations3-6 weeks
Go toValidation
Gate 4
Launch
Iterations3-6 weeks
Go toLaunch
Gate 5
Iterations occur within the stages of the process, many iterations within longerstages such as Development. Each iteration starts with a Planning Meeting,and ends with a Demo to stakeholders, followed by a Retrospect.
Agile-Stage-Gate with Stages & GatesWith Agile Sprints, Scrums & Demos Built into Stages
Iterations3-6 weeks
Development
Iterations3-6 weeks
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WOW! Performance Improvements with Agile: Actual Vs. Expected Results
(2018 DE Study of 228 EU Manufacturing Firms – Mostly Engineering)
3.1
2.6
2.4
2.8
2.5
2.5
0 1 2 3 4
Increased flexibility toreact to changes
Increased productivity ofdevelopment project
Reduced project risk (techfeasibility; project failure)
Improved teammorale/motivation
Improved adherence toschedule
Shorter productdevelopment (time to
market)
Value of Agile Hardly Any Value
Very Large Value
Source: Schmidt, Weiss & Paetzold, “Agile Development of
Physical Products”, 2018
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Another Reason: Digital Transformation
q Smart products with embedded software q Embedded software now 29% of manufacturers' new productsq Example: Volvo Construction
q How to handle these projects with IT people & engineering peopleØ Each using a different system, different cultures
q One option: Split the project, run as two separate projectsq Another option: a hybrid model → Agile-Stage-Gate
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The Full 2-Day ISBM Seminar
q Winning at New Productsq This course will be held regardless of COVID-19 events. q It will be delivered remotely over several days
Ø unless we are clear to host it at a location, Ø likely Pittsburgh PA.
q Registrants will determine the delivery methodq June 16-17
q See also articles on lineØ www.bobcooper.ca