Doing the Right Projects! Doing Projects Right!

1. Doing the Right Projects! Doing Projects Right!

2. Stage-Gate Process • Almost 70% of leading U.S. product developers now use some type of Stage-Gate process. • Sound research, best practices, used world-wide.

3. Benefits • Accelerates speed-to-market • Increases likelihood of product success • Introduces discipline into an ordinarily chaotic process • Reduces re-work and other forms of waste • Improves focus via gates where poor projects are killed • Achieves efficient and effective allocation of scarce resources • Ensures a complete process – no critical steps are omitted

4. Critical Success Driver #1 The number one success driver is a unique, superior product: a differentiated product that delivers unique benefits and superior value to the customer. • But “me-too”, ho-hum, copy-cat, tired products tend to be the rule rather than the exception! • Engineers or scientists building a monument to themselves • The quest must be for real product advantages

5. Critical Success Driver #2 A strong market orientation – a market driven and customer focused new product process • Success factors in every study: needs recognition, understanding user needs, constant customer contact, strong market knowledge, market research, quality of execution of marketing activities, up-front marketing activities are all key to success • A strong market orientation is missing in the majority of new projects

6. Critical Success Driver #3 More pre-development work – the homework or ‘up-front’ activities • Screening, market studies, tech feasibility, build business case • But little time and effort are spent here: 7% of money and 16% of effort (Japanese and highly successful US firms spend considerably more here) • Homework answers key questions before Development begins: • Is the project economically attractive? • Who is the target customer? What positioning? • What should the product be? features, attributes, performance • Can it be developed? At the right cost? How?

7. Critical Success Driver #4 Sharp and early product & project definition (before Development) • This definition includes: • Project scope • Target market definition • Product concept & benefits to be delivered: value proposition • Positioning strategy (include price point) • Features, attributes, requirements & specs • Why so critical? • Forces homework to be done up-front (Success Driver #3) • Communication tool • Provides clear targets for Development

8. Critical Success Factor #5 An internationalorientation in product design, development and target market selection is more successful • International products aimed at world regional export markets • Global products • “Glocal” products • Often missed by North American firms!

9. Critical Success Driver #6 The right organizational structure & design are keys to new product success • A true cross-functional team approach • Responsible for the project, not to their department • On the project end-to-end • Team empowerment • Control over project’s resources • Team accountability • Responsible for achieving agreed-to goals • A clearly defined team leader • Chosen for the right reasons

10. Critical Success Driver #7 Most firms have too many projects and too few resources to do them! Why? … A failure to focus We want “funnels”..not “tunnels” • Begin with many solid concepts • Successively remove the poor ones • Must “drown some puppies”

11. Critical Success Driver #8 Leveraging core competencies is vital to success • Why? • Resources: are available & at marginal cost • Experience: there are fewer surprises – less goes wrong! • Two types of competencies: • Technological – both Development and Manufacturing • Marketing – customer base, channels, sales force, service, etc. • Important screening or project selection criteria • Rate the project on technological & marketing leverage

12. Critical Success Driver #9 The Resources Must Be In Place! “Even the best game plan comes to nothing if the players aren’t on the field!” “Urgent things always take precedence over important things” • Best performers are resource rich in New Product Development: • Sales people • Marketing people • Manufacturing or Operations people • Technical or R&D people

13. Critical Success Driver #10 Top management support doesn’t guarantee success, but it sure helps • Top management support critical to getting projects to market • But top managers tend to drive failures with a higher frequency than average successes! • Top management’s role: to set the stage – a behind the scenes facilitator (not so much an actor)

14. Stage-Gate Product Development • A System from Idea to Launch • Breaks the New Product Development Process into a series of manageable and simple stages • Used by leading corporations world wide • Adapted for each situation

15. Go To Development Idea Screen Second Screen Gate 3 Stage 2 Stage 3 Stage 1 Gate 2 Gate 1 Build Business Case Development Scoping Stages in the System • Gates = Decision or GO /KILL Points • Gates are the quality control check points in the process

16. GATES – ensuring only the RIGHT projects move forward • Readiness check & quality of execution: • Steps executed • Deliverables in place • Business Rationale: • Attractive opportunity? • Strategic project? • Action Plans: • Forward Plan good? • Resources available and committed?

17. Set up an “Idea Capture” System • Intake point/s – Innovation Champion • Proactive in seeking projects • Takes projects or ideas to Gate 1 • Gets decision • Move forward to Stage 1 OR into Idea Vault or Bank

18. Gate 1 – Idea Screen • The initial GO/KILL Decision • First but tentative commitment of resources: a flickering green light • Develop a forward plan for Stage 1 Must Meet Criteria for GO: Minimum Market Size, No Show-Stoppers Should Meet Criteria:Strategic Fit, Technical Feasibility, Market Attractiveness, Competitive advantage (Rating 1 to5)

19. Stage 1 - Scoping • A preliminary investigation • Within one month • Key Tasks • Preliminary Market Assessment • Preliminary Technical Assessment • Preliminary Business Analysis • IP, Regulatory, Safety • Gate Deliverables – Prelim Product Def & Bus Case

20. Gate 2 – Second Screen • Second review – Better information • Opens the door to a more expensive second stage – Building the Business Case • Gatekeepers? • Approval of the Forward Plan and Resources Should Meet Criteria:Strategic Fit, Technical Feasibility, Market Attractiveness, Competitive adv, Core Competency, Risk/Reward (Rating 1 to5)

21. Makes or Breaks the Project Detailed Investigation The Business Plan/Feasibility Key Tasks Market Analysis Competitive Analysis Voice of Customer Concept Test Technical: Proof of feasibility Production/operations Legal Management Financial Stage 2 – Build the Business Case

22. Gate 3 – Go to Development • The “money gate” • Opens the door to full scale development & heavy commitment • Must have: • Complete plan • Defined product • Full financial review

23. Stage 3 - Development • Implementation of Development Plan • Develop the product as per the Gate 3 Definition • Undertake in-house product testing (lab, alpha) • Conduct limited customer test via “show & tell” • Develop manufacturing (operations) process • Develop detailed Test Plans • Develop Launch Plans • Detailed Market Launch Plan • Production/Operations & Quality Assurance plans

24. Opens the door to Stage 4 – Validation and Testing Review of Financials Review and approval of Test Plans Criteria for Go: Quality of Activities in Stage 3 Deliverables and Readiness Check Consistency Check – prototype consistent with definition Revisit criteria and business plan Gate 4 – Go to Testing

25. Stage 4 – Testing and Validation • The final tests of the product, production and operations & marketing strategy prior to full commercialization • Update financial analysis • Prepare final Launch Plan

26. Gate 5 – Go to Launch • The final GO/KILL gate in the process • Involves: • A critical review of all activities and results • A review of the updated financials • A review & approval of finalized production and market launch plans • Check list that all is commercial-ready

27. Stage 5 - Launch • Key Tasks to Implement: • Production/Operations Plan • Market Launch Plan • Post Launch (monitor & adjust) • Product Life Cycle Plan

28. How Gates Work • The project leader drives the project from stage to stage, gate to gate (the proponent) • The leader submits the inputs or deliverables to each gate at the completion of a stage • The deliverables are pre-set • A visible list of requirements – clear expectations • Based on a standard list or menu • Deliverables provide the information needed for the Gate decision

29. Who are the Gatekeepers? • Management • Represent different functional areas • Resource-owners • Authority to approve and support

30. Gatekeepers and Their Role • Discipline – regular meetings and be there • Arrive prepared • Use the list of criteria – no hidden criteria • Ensure all project treated the same • Fast same day decisions • Provide advice and assistance on projects

31. Flexible and Scalable • Scalable to suit projects of different risk levels • The higher the risk the more rigorous the process • Risk • Cost • Potential payoff • Strategic impact • Uncertainty – uniqueness, unknowns

32. Needs vs Features • A Focus on Features: Identifies today’s dominant product • A Focus on Needs: Leads to tomorrows dominant product

33. Market Driven • Builds in Voice of Customer • Loops back to the customer • Homework upfront • Poker game

34. Gate 3 Stage 2 Gate 2 Spiral Development:“Build-Test-Feedback-Revise” Loops Testing & Validation Build Business Case Stage 4 Gate 4 Stage 3 - Development Field Trail Beta Test VoC User Needs & Wants Full Proposed Concept Test Next proto & Test Rapid-proto & Test 1st-proto & Test

35. Selecting the Right Projects • Encourage many ideas • Focus on the winners • Do your homework • Talk to the customers and LISTEN • Secure resources • One stage at a time • Strategic portfolio management

36. What stage-gate is NOT • Not a functional review system • Not a rigid system • Not a bureaucratic system – streamlined • Not the same as project management

37. Implementing a new process • Stage 1 - Defining • Executive buy-in • Task force • Current process audit • Workshop – problem detection • Benchmarking • Stage 2 - Designing • Training session • Rounds with feedback • Iterations with management and users

38. Implementing a new process Stage 3 – Implementation • Training • Internal marketing – buy-in • Bringing Projects into the Process • A process owner • Documentation • IT Support

39. Thank-you