Stage-Gate – A way to win against the big boys

Stage-Gate, Inc. – Giving Wings to New Product Development

Stage Gate development is some new ideas combined with old tested and true methodology. Its sort of a book of the month approach to project management used by the big boys. Its also a great way to bolster ones consulting business.

The orderly approach has great value. The time spent on decisions and research amongst disjointed teams may have less value. The meeting times required may or more likely may not have value. The exclusion of real customer feedback early on is a serious drawback. One company I know of gets some of the customers skin early on to mitigate that. I think they are going to be a force to be reckoned with, if they can pull it off.

One interesting part that bears mention is that Stage Gate creating a framework which is set up to kill the project just before launch. As contradictory as it sounds, thats not a bad thing.

A small business can use the pluses of Stage Gate project management with some modifications to win against the big boys. Larger organizations thrive on order, not chaos, and thats one of the things we can leverage to our advantage. We can also use the large company approach of killing a project pre-release if need be with much less fallout.

Killing something at pre-release makes sense. Traditional structured development processes often times keep the customer out of the loop until late in the game. Stage gate trys but from what I’ve read and understand, does not really do so. The customer will typically give lip service until they have something in hand. Think about it, wouldn’t you say, wow, thats a cool product…. when you first hear about it on paper or in a power point presentation. You get updates along the way. Everyone is happy. Then you get to play with it… and its a miserable failure. Unless you can get some of the customers skin and make it hurt early on…. you may be in for a nasty surprise later. At least in a prerelease project death, you have not spent the big money on the launch… but much chaos and upset amongst the team will occur when it is killed at that time. And that cost is all but buried in large corporations. With a small entity, you can apply some of the principles of stage gate early on, and thus win with some chaos if in early kill is needed, where the large organization losses with morale by waiting to the end

Another disadvantage is the time lost along the way. There are seriously time constrained events that have to occur. Not taking the gamble on success of a gate, holds off on the decisions. As such, the latter phases are prone to be excessively long. However, it also reduces risk, as tooling or manufacturing will not have any cash flow until latter in the game. The real key is what is the time to market daily cost. If its low, stage gate is an idea situation. If its really high it may be best to pick and choose, and increase risk, rather than waiting for all the steps and signoffs needed for a gate check. Please do note, that those steps and stages must be done…. but they can be done latter, rather than holding up the process. Again, it comes down to risk analysis… and much of that should have been taken care of in the stage 2, the detailed investigation.

The biggest issue IMHO is the lack of true customer feedback in gates 1 and 2. And thats where the small business can beat the big boys. A small entity, does not have to wait months to make decisions even to start Gate 2. A small entity also as part of the prelimiary investigation in Stage 1 can provide rapid prototypes and mockups. As such, they can be more likely kill something off or change it, and go on to the next one before the detailed investigation or actual development starts. The same can be said about process development and infrastructure… Waiting until the development starts can make that phase exceedingly long. One may find that a key process on paper in stage one, the prelimary investigation is totally impractical once you try implementation… By waiting until development starts, much money is wasted going back to stage 1 and restarting.

Another thing the small business can do is to integrate manufacturing into stage 2, the detailed investigation… and jump the gun on development stage 3. This does however required detailed risk analysis. One might go ahead and order in the steel for molds, not cut them, but perhaps over spend slightly for larger steel, rather than optimimum. As a result, it is ready and waiting in the middle of stage 3. This is much better than extending stage 3 for tooling… of course it is a matter of risk tolerance.

Variants of stage gate have been used for years…. They are proven and they do work. But market risk analysis and early and continuous customer feedback combined with fast change and iteration are the big advantage the small business has. The key is to integrate those systens, in combination with the tried and true methods of old to deliver outstanding new product successes to customers that will buy them.