5.Seven principles of stage gate approach.pdf - The seven principles of the latest Stage-Gate\u00ae method add up to a streamlined new-product

5.Seven principles of stage gate approach.pdf - The seven...

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18M M M a r c h / A p r i l 2 0 0 6The seven principles of the latest Stage-Gate®method add upto a streamlined, new-productidea-to-launch process. BY ROBERT G. COOPER
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Have you ever wondered whysome companies make productinnovation seem so easy—gener-ating one big winner after another? Here isa startling fact: New-product development(NPD) productivity in the top performingcompany is five times what it is in theaverage company. The top performer getsfive times as much new-product output forthe same investment, according to theInnovation Excellence Study 2005conductedby Arthur D. Little (ADL). For the rest ofus, developing a steady stream of success-ful new products is a real challenge.Major Productivity GapsThe concept of productivity is simple:the most bang for the buck. In productdevelopment, it is output (new-productsales or profits) divided by input (researchand development or NPD costs and time). The ADL study provides insights intoNPD productivity by industry. It looks atoutput (five-year sales from new productsas a percentage of company sales) andinput (research and development spendingas a percentage of company sales). Onestartling conclusion is the difference in productivity between top performers andthe rest, regardless of industry. On aver-age, there’s an almost 1,200% differencebetween the most productive (top 25% of companies on this metric) and least productive (bottom 25% of companies onthis metric). And in some industries, thedifference is even greater. For example, the top 25% pharmaceutical companies are 31 times more productive in NPD than the bottom 25%. What are these high productivity companies doing so differently, and can your company learnfrom them? © 2000-2012 Product Development Institute Inc.Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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Maximizing ProductivitySeven key principles of lean, rapid, and profitable NPD arecommon denominators of high productivity businesses inproduct innovation. They are very much fact-based and wereuncovered in benchmarking and best practice studies of topperforming companies. These principles were developed froma long tradition of solid research, culminating in the mostrecent American Productivity & Quality Center (APQC) studyof best practices in product innovation. Our research showsthat companies or project teams that employ these principlesachieve superior performance results, and that poor perform-ers tend to ignore them (see Exhibit 1). Integrating the follow-ing principles of NPD into your new-product methodologyresults in a next generation idea-to-launch process, or NexGenStage-Gate®. (Stage-Gate®is a registered trademark of theProduct Development Institute Inc.)Customer focused.Developing and delivering new prod-ucts that are differentiated, solve major customer problems,and offer a compelling value propositionto the customer are the top drivers ofNPD success and profitability. The prod-
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