Stage Gate Systems

1. Stage Gate Systems • Exxon- PIP Product Innovation Process • HP- Phased Review Process • Guiness- NaviGate • others: 3M, Polaroid, Kodak,Rohm and Haas,ICI,Mobil,Dow Chemical, Asahi Chemical, P&G, SC JOhnson

2. Typical 2nd Generation Stage-Gate Process

3. Stages • Set of parallel activities • undertaken by a cross-functional team • gathers information for the next gate

4. Gates • A go/kill decision point with • a set of required deliverables • pre defined evaluation criteria • defined outputs: go/kill/recycle

5. Stage 1: Discovery • R&D • lead user analysis • strategic planning exercises • gaps and opportunities in the market • disruptions

6. handful of must-meet and should-meet criteria strategic alignment project feasibility opportunity size and attractiveness product advantage fit to resources and skills and policies Exxon’s PIP: Strategic fit Market attractiveness Technical feasibility Killer variables Gate 1: Idea screen- Gentle screen

7. Preliminary market assessment Preliminary technical assessment <= 1 month 10-20 person-days of effort Stage 2: Scoping

8. Original set of must-meet and should-meet criteria new criteria: sales force customer reaction “killer variable” presence simple financial assessment- payback period Reckitt &Colman now Reckitt-Benckiser: “Does the initial evidence suggest that the concept can win in the marketplace?” Gate 2: Second Screen

9. 3rd Generation Stage-Gate Process

10. Stage 2: Building the Business Case or the critical homework stage • Market investigations and research studies • Detailed technical analysis • Detailed financial analysis • Outcome: a business case for the project • Product definition • Project justification • Detailed project plan

11. Gate 3: Go to development Last point before heavy spending • Process audit of Stage 2 • Project evaluation on established criteria • Financial emphasis • Review and approval of • Development plan • Preliminary operations and marketing plan • Designation of full team with authority

12. Lab tests, in-house tests, alpha tests Deliverables: lab-tested product prototype In parallel: marketing and operations Deliverables: detailed test plans, launch plans Production/operations plans including facilities requirements Stage 3: Development Deliverables: Updated financial analysis; resolution of regulatory, legal and patent issues

13. Gate 4: Go to testing • Review of development work and process • Match to original definition is checked • Review financial data • Approval of test or validation plans • Review of detailed marketing and operations plans for executability

14. Validity of Product Production process Customer acceptance Project economics In-house product tests User or field product trials Trial, limited production or pilot production Pre-test market, test market or trial sell Revised business and financial analysis Stage 4: Testing and Validation

15. Final kill point Audit of process in stage 4 Review operations and marketing plans for implementation at the next stage Criteria: expected financial return and appropriateness of launch and start-up operations plans Gate 5: Go to launch

16. Stage 5: Launch • Implementation, fine tuning, success

17. Post-launch review • 6-19 months from launch • Change status from new product to regular product • Disband NP team • Review project and product performance • Revenues • Costs • Expenditures • Profits • Timing • Learning

18. What the Stage Gate Process is not • Functional, phased review • Rigid • Bureaucratic • Project management

19. 3rd Generation Stage-Gate systems

20. The first stages

21. Summary of Stage 1 Actions

22. Gate 3 Deliverables

23. Stage Gates 1,2,3 Must-Meet Criteria

24. Stage Gate 3 Should-Meet Criteria