The Need For Product Innovation
Innovation is the key to your company’s survival. It is an imperative and it must be an integral part of your organization. Innovation — it must be encoded in your corporate DNA. One of the most important parts in your innovation process is having an up to snuff new product development process. A formalized New Product Development with prakat.com process is essential. Although alternative approaches exist the most common type is referred to as the Stage-Gate® Process (Stage-Gate ® is a registered trademark of Product Development Institute Inc.). The Stage-Gate innovation process is, according to its developers, ‘‘a carefully designed business process’’ and the result of comprehensive research into under- standing the reasons behind product success and failure (see www.stage-gate.com for more information). The process was pioneered by Dr. Robert G. Cooper and is widely used, and trusted, by companies around the world.
The process, in essence, has two key elements:
The ‘‘stage’’ refers to the critical activities that need to be undertaken at a particular stage of product development. This is a cross-business process, and requires balanced ownership by multiple functions. Stage content, in my experience, should be divided among all business functions—it is not purely a technology process.
The ‘‘gating’’ process involves ownership, decision makers, degree of flexibility, criteria, and prioritization. This includes a selection of ideas and concepts from the hopper.
Overall, it is important to note that the NPD process must be a cross-business function. Therefore, all business functions must be aware of the process. Communication of relevant information is essential. Key personnel should be involved in the go/no-go gating reviews.
As for the reviews, these should be shared internally. Further, metrics are essential to demonstrate progress and create/encourage momentum and internal enthusiasm. Establishment of a mix of input metrics (such as average time in each stage), and output metrics, such as the value of launched products, percentage of new product sales, and so on, provides a balanced scorecard for innovation. Additionally, a streamlined, or ‘‘express’’ version of the process can be utilized for line extensions, to accelerate progress. The key purpose of the NPD pipeline is to create a structured, transparent process that allows management of project groups, DeFazio explained. And the key elements include quality, capability, and capacity.
In terms of quality, the innovation team strives to select projects that, if successful, will deliver the best strategic outcome for the invested funds.
For capability, the process helps track how effectively an individual project is managed and allowed to progress.
Capacity refers to how the business manages and prioritizes resources supporting a portfolio of well managed (or ‘‘capable’’) projects.
Remember what I mentioned in previous posts: Fail fast, but fail cheap. The institution of a proper NPD process will enhance your idea-to-launch methodology. Gates with ‘‘teeth’’ will help go/kill decision making and prioritization, define the gatekeepers, and provide a systematic approach to gatekeeping behavior.
Further, portfolio management will be simplified and flexible enough to achieve the optimal balance and mix of products in the hopper. Success criteria at the gates will be concretized, and, ideally, a financial overlay will further help prioritize projects against available resources.