Product Development with the Stage-Gate® Process (Part 1): Definition and Basic Principles

Content

1. Definition
2. Basic principles

One of the greatest challenges that companies are facing is the continuous development of new products and services. Only with innovations competitiveness can be secured and market share increased. Innovative strength is therefore an important competitive advantage.

But, of course, creating innovations is not easy and brings several challenges:

• The entire process as well as targeted output are characterized by high uncertainty and risks.
• All areas of the company must be involved.
• Major change processes will be triggered.

This is why it is so important to actively manage innovation processes. By using proven methods or process models, mistakes and expensive revision loops can be avoided and an efficient process can be ensured. A well-known method to better manage innovations and ensure quality is the so-called Stage-Gate® process by Robert G. Cooper. This is a linear process model, which resembles a simple phase-milestone plan, and with which product development can be structured. The goals are increased transparency, improved communication, the systematic reduction of risks as well as adherence to deadlines and budgets. 

Definition Stage-Gate® process

The Stage-Gate® process is a process for optimizing product development projects. It divides the project into separate processing phases (so-called stages) with clearly defined goals (so-called gates). Each stage ends with a gate that triggers a review of the project. At the so-called gates, a new decision is made each time on whether to continue or stop the innovation project. If you look at the model from a project management perspective, it is a simple phase-milestone model with milestones as hard and unskippable borders. The Stage-Gate® process is suitable for any type of innovation project - regardless of size and complexity.

The basic principles of the Stage-Gate® process

The Stage-Gate® process provides a guideline for product development projects and can be customized based on individual requirements. Regardless of the degree of individualization, the model is based on the following eight basic principles (see official infographic):

• Simplicity: Complex processes are divided into small and manageable phases.
• Risk: Gates enable taking small, calculable risks.
• Collaboration: Cross-functional leadership and collaboration is required across all levels of the organization.
• Transparency:  The process is visible to all stakeholders and structured in a clear and understandable way.  
• Speed: Processes are accelerated as they follow the same pattern: decide, align, and execute.
• Investment: Scarce resources are focused on projects with high potential output.
• Flexibility:  Processes are designed according to project risk.
• Winning: A pipeline for unique and innovative products is established.  

In the next article in this series, we will take a look at the strengths and weaknesses of the Stage-Gate® process as well as potential pitfalls and responsibilities.