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The Stage-Gate process reduces risk and increases speed to market for New Product Development

Launching a new product from ideation to commercialization requires a programmatic and disciplined innovation process through a progressive series of steps using the Stage-Gate New Product Development process. This process carries forward a new idea through a series of multi-functional deliverables, that evaluate the commercial, technical, supply chain, and financial viability of a project. It can be used with full rigor for disruptive innovation and adjacencies using all stages and deliverables with a full set of documentation or can be fast-tracked for incremental innovation and product line extensions.

A typical Stage-Gate infrastructure

In companies that have established resources for innovation with the product management and R&D departments, the process follows a series of Stages and Gates. There is a multi-functional “Project Team” with working members from marketing, R&D, engineering, purchasing, planning, finance, sales, and legal. The project team leader can be either from the marketing or the R&D department depending on the commercial or technical complexity of the project. There is a program manager (PMO) assigned to monitor the tasks, resources, and milestones for the project. The overall governance is provided by the Innovation Steering Committee comprising “Gatekeepers” who are the leaders of these departments, offering resources and guidance to the team members.

A Stage is a “Phase of Work” that is conducted by the project team members. It has a pre-determined list of multi-functional “Stage Deliverables” that Gatekeepers have agreed with the necessary manpower and capital resources. The project team presents “Stage updates” every month to the Gatekeepers on all projects in the Innovation pipeline. A Gate is a “Go/No-Go Decision” taken by the Gatekeepers at the end of each Stage based on the results of the activities conducted during the Stage. During a “Gate Review” the project team must have the deliverables completed and provide the key information to the Gatekeepers to make the right decision efficiently. Gate reviews are presented as needed during the monthly meetings.

Stages and Gates

There are 6 Stages and 6 Gates in a Stage-Gate process.

Stage 0: Idea Emergence Potential ideas are identified and evaluated. Ideas are scored by an “Idea scoring committee” which comprises representatives from the marketing and R&D departments. High-scoring ideas have a “maturation pair” (one marketing and R&D appointed who are tasked with conducting an in-depth scoring of the idea utilizing a comprehensive score sheet. Documents: Idea Score Card

Gate 1: Idea screening and prioritization

Stage 1: Preliminary Technical & Marketing Assessments Validate the idea, and its environment and define the project by collecting information with the project team. The validated idea must have the potential to deliver a superior value product or process for a new or existing market. Documents: Feasibility Report

Gate 2: Feasibility review

Stage 2: Detailed Project Investigation Perform in-depth market and technical research along with the first financial analysis to support the project's authorization. The concept defined previously must be validated for technology, manufacturing, competition, and market. Documents: Business case, Financial analysis.

Gate 3: Project Authorization

Stage 3: Development Produce a working prototype (lab scale or full scale) or to demonstrate process capabilities. Gather and analyze technical and financial results from developmental trials. Target market feedback is also gathered from and analyzed by marketing and sales. Confirm market position and business plan. Documents: Capex, includes refined Business plan and Financial analysis.

Gate 4: Development Review

Stage 4: Validation and Testing Perform pilot or trial production evaluations, define process improvements, and evaluate plant manufacturing capability. Costs are identified, and field evaluations are conducted. Finalize costs and pricing, validate supply capacity, and confirm business plan assumptions. Documents: Sales and Marketing plan, Production and Supply Chain plan.

Gate 5: Launch approval

Stage 5: Industrialization & Commercialization Implement the full production run and successfully launch the product.

Gate 6: Post-launch review Review how effectively the process worked from idea to marketable product. Propose improvement for future launches. Review various product launch plans – actual v/s budget.

Innovation pipeline

A typical innovation pipeline is shaped as a funnel, with more projects in the earlier than in the later stages. Projects move through the funnel after Stage completions and Gate reviews. Ideation sessions should be held every year to generate ideas that can feed the funnel. An idea hopper is created to hold new ideas that need resources. Projects when reviewed during Gate reviews by the Gatekeepers, should pass through rigorous due diligence and should be killed if it does not meet the company growth and innovation criteria. Typically, more projects are killed in the earlier stages, and rarely any after Stage 3, Development. A healthy innovation pipeline should churn out 2-4 new product launches every year, although the number depends on the complexity of the project.

The Stage-Gate NPD process is an important tool for innovators in the marketing and R&D department, that assists in reducing risk and improving speed to market for a new product, solution, or service idea.

The author Ashwin Himat is the Founder and President of Endurance Growth Strategy Consulting LLC, which provides Product Innovation advisory and consultancy services in the building products industry. He helps building product manufacturers with new product development by taking a new product from idea to launch using the State-Gate process. He is a Business and Product Development Executive who has created organic growth through new products, markets, and technologies, and inorganic growth through M&A, for 25+ years in the building materials industry at large global and public companies such as Louisiana Pacific (NYSE: LPX, $4B) and CertainTeed (CAC: SGO, €50B).

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