In the fall of 2017, Professor Dr. Robert G. Cooper published the 5th edition of his
bestselling book “Winning at New Products,” introducing a new generation of the Stage-
Gate® system. On this occasion, we are taking time to reflect on the Stage-Gate practice
in German-speaking countries and reveal the innovations of the 5th generation, which
Cooper introduces in “Beyond Stage-Gate.”
Anyone who still uses a 2nd generation Stage-Gate system is stuck in the 1990s, and is
missing significant enhancements in relation to:
• the success rate of innovation projects,
• the time-to-market of new products, and
• the motivation within project teams.
Since the 1980s, the Stage-Gate system has been systematically built upon in leading
companies worldwide. Bob Cooper has been analyzing the current practices of the
most successful innovation systems and has described them in each new version of his
bestsellers. For example, in the 2nd generation (published in 1993), he integrated the
results of the then current success factors research (e.g. interdisciplinary teams, profound
homework before development, etc.). In the 3rd generation (2000), Cooper focused
on accelerating new product projects. The 4th generation (2011) then revealed Spiral
Development (regular customer feedback loops), as well as Lean and Open Innovation
into the Stage-Gate systems. The 5th generation, Beyond Stage-Gate, addresses the
challenge of “Bold Innovation in Record Time.”
How current is the Stage-Gate system in your company?
You can determine your system’s capabilities by checking whether your innovation system
methodically and consistently ensures the following practices:
a) Convincing customer benefit and added value for buyers / users are the focus
of all parties involved in the entire innovation process. In all phases, we set
activities to understand application and application environment as well as
customer needs in depth.
b) In our innovation projects, an interdisciplinary project team is wholly responsible
for the results: from the concept phase to the development, then to successfully
implementing new market performances.
c) We focus our resources on the attractive projects. That means we stop projects
at Gates, even if it hurts.
If these three statements apply to the innovation practice of your company, the diagnosis
is: old but good! Your organization probably implements a Stage-Gate process from
generations 2 or 3. It would be worthwhile to consider further developments. Read on
here.
If any part of a), b) or c) is missing from your standard business practice, it may be time to
renovate the cornerstones of the Stage-Gate system before heading for Beyond Stage-
Gate.
Anyone who
still uses a 2nd
generation Stage-
Gate system is stuck
in the 1990s, and is
missing significant
enhancements.
4
Beyond Stage-Gate: Bold Innovation in Record Time
What’s new – Beyond Stage-Gate?
At first glance, Beyond Stage-Gate is similar to the traditional Stage-Gate (generation 2 to
4). There are stages where project work is done and gates where go-stop decisions about
the project are made. At a second glance, three major developments stand out:
1. Beyond Stage-Gate is adaptive and fast
Classic product development calls for specification documentation for both functionality
and customer requirements. Ideally, an interdisciplinary team first defines which
requirements the new product meets and how it should be best positioned. The closer
this team interacts with potential target customers, the better. These requirements are
then translated into technical specifications that are further implemented during the
development phase. This procedure has demonstrably led to great successes.
For the past few years, however, the framework conditions for new product projects have
changed:
• In the age of digitalization, Internet of Things (IoT), artificial intelligence, etc.,
customers are less aware of what they actually need and what is possible from a
technical side.
• Trends, needs and offers from competitors are changing faster than ever. Sometimes,
the framework for a project changes several times during a development cycle.
This has also made it impossible to define and “freeze” a complete, longer-term
requirement specification. If an organization adheres to this approach, the proportion of
unsuccessful projects rises or the project periods will sometimes be lengthened, because
it often means going “back to the start.”
In a state-of-the-art Stage-Gate system, the project teams adapt the procedure to the
respective project context. Three practices have established top innovators:
• Spiral development: Through iterative learning loops, the project team, together with
potential target customers, approaches the final new product. These iterations take
place in all project phases. This may mean that the product in question is still less
than 50% defined at the beginning of the development phase.
• Context-based stages and gates: No project is just like the other. The process must
justify the circumstance. In a Beyond Stage-Gate system, therefore, the number of
stages and gates is adjusted to the risk or complexity of the project.
The higher the risk/complexity the more gates the project should go through in terms
of quality and resource control points. Increasingly, companies have installed multiple
Stage-Gate processes for different types of projects, e.g. for bold innovations, for
modifications of existing products, or for technology and platform developments.
In addition to the number of stages and gates, the criteria for assessing the
attractiveness of projects are also adapted to the respective type.
In the age of
digitalization, IoT,
artificial intelligence,
etc., customers are
less aware of what
they actually need
and what is possible
from a technical side.
Due to market
change, the
framework for a
project can change
several times during a
development cycle.
5
Beyond Stage-Gate: Bold Innovation in Record Time
While product modifications make early financial valuation feasible and are well-suited
to projecting prioritization, using the same criteria for high novelty innovation or for
platform development is not without its risks. For such projects, no reliable figures are
available in the early project phases. The first estimated figures won’t come close to
the final calculation.
Stage-Gate systems, which focus on financial criteria, “produce” project portfolios
with many low-hanging fruits and only few truly future-proof developments. The
best innovators in this type of project rely on criteria that test the success criteria of
innovative products, e.g. customer benefit, superiority over competitive solutions,
market attractiveness, feasibility, etc.
• Risk-based contingency model: Within the stages, laborious and time-intensive
processing of checklists is finally over. The project team identifies those activities
that most efficiently advance the project and rapidly reduce uncertainty or risk.
The gatekeepers at the gate agree upon this procedure. The deliverables for the
subsequent gate are determined accordingly. Cooper recommends –
especially at the
beginning of a project – the “Innovation Project Canvas” as a tool. Companies using
it report speeding up early project phase by one to two months with the same or even
higher quality of the results.
2. Agile development in the Stage-Gate system
The term “Agile” has been part of the innovation conferencing programs for about four
years. Coming from software development, agile methods and ways of thinking have
massively shaped the development of physical products in recent years.
While “evangelist” sees Agile development as the sole source of salvation for all
development issues, leading companies such as Honeywell®, LEGO®, Danfoss®,
Corning® or Tetra Pak® rely on hybrid Agile Stage-Gate systems.
• The Stage-Gate system provides the framework for all new product activities of the
organization and ensures that the right projects are efficiently and quickly executed.
• Agile methods, on the other hand, focus primarily on the project management level
and improve the motivation of the project teams as well as the transparency and
ability to learn in the projects.1
A hybrid Agile Stage-Gate system thus provides for the use of agile project management
within the stages, while the gates fulfill the same function as in the classic Stage-Gate
process.
What characterizes agile development?
• A complex challenge is divided into small parts to be solved in the course of one to
four weeks. These are prioritized with regard to profit contribution for the customer
and implemented in timed sprints. The aim is to achieve the most finished and usable
results for every customer. A multitude of rules, methods and tools (for example, short
daily meetings where agreements are quickly met, learning loops after each sprint)
ensure that it is always clear who is currently working on which piece of the puzzle
both within and outside the project team.
Agile methods and
ways of thinking have
massively shaped
the development of
physical products in
recent years.
A hybrid Agile
Stage-Gate system
provides for the
use of Agile project
management within
the stages, while
the gates fulfill the
same function as in
the classic Stage-
Gate process.
6
Beyond Stage-Gate: Bold Innovation in Record Time
• Agile is a set method and, most importantly, a special mindset. The Agile project team
is largely self-organized and responsible for the results of each sprint. In many project
teams this triggers positive dynamics and increases motivation.
• An important aspect of the Agile self-conception is best described as “experimenting
instead of discussing.” Before kicking the topic, approach or benefit to death, the
team looks at the most practical uses they could experience from the idea. Ideally, the
customer will also be directly involved.
Classic and Agile project management have strengths and weaknesses. The biggest
difference is probably in dealing with the planning and the unpredictable. In classical
project management, an attempt is made to create and adhere to a plan that is as realistic
as possible until the objectives have been achieved (for example, the completion of a
stage). Unforeseen events and results are perceived as a disruption or require skilled risk
and resource management.
Although Agile project management also creates a rough overall project plan, the focus
is much more on what can be achieved in the next one to three sprints. New insights or
changed priorities of activities are taken into account from sprint to sprint, without having
to reschedule the project each time. This aspect qualifies Agile project management
especially for projects in an uncertain and complex environment, e.g., projects in the early
project phases and/or with a high degree of innovation.
For example, Corning uses Agile project management primarily for its high-risk projects
(maximum 20% of all projects). For simple, predictable product modifications, classic
project management seems to be more efficient.
3. Stage-Gate as an holistic system
Stage-Gate was originally designed as a guide for successful project implementation from
the idea to the finished product on the market. In the course of its three-decade evolution,
this has become a holistic innovation system. This includes methodological approaches
to innovation control that go far beyond Stage-Gate processes for different project types.
These can include approaches to innovation goal definitions and search fields, for project
portfolio management, idea management, and innovation controlling. These are closely
interlinked with aspects of leadership and organizational culture.
For example, in a gate meeting, the project team agreed with the gatekeepers that, in the
next stage, the team will receive the required resources in order to independently develop
a project to a certain degree of maturity aiming for high quality and efficiency. The project
team’s degrees of freedom during the stage are high, the executives’ intervention is kept
low. At the next gate, the gatekeepers check the quality and resilience of the results
of the previous stage and evaluate the attractiveness of the project for the company.
The information validated at the gate (e.g., economic attractiveness ratios, resource
requirements) is then available for strategic prioritization decisions in project portfolio
management. Resource bottlenecks can be detected early and appropriate measures can
be taken.
New insights or
changed priorities of
activities are taken
into account without
having to reschedule
the project.
Resource bottlenecks
can be detected early
and appropriate
measures can be
taken.
7
Beyond Stage-Gate: Bold Innovation in Record Time
So that the decision makers do not lose sight of the overriding strategy over the project
portfolio because of project and resource juggling, this is translated into strategic resource
buckets and serves as a guardrail for prioritization decisions in the portfolio process. If the
decision-making team identifies gaps in one or more strategic buckets, it initiates an idea
campaign to generate new ideas for that strategy field.
Now changes are made in the Stage-Gate system, e.g. Agile project management is
introduced for radical innovation projects, and it is important to consider the effects on the
whole system and appropriately embed the innovation in the process landscape.
The lubricant of a Beyond Stage-Gate system is an innovation-promoting environment
that is characterized by lived intrapreneurship, learning and opportunity-oriented
cooperation, and incorporates these principles when learning how to deal with mistakes
or failures. Every innovation management system bears the responsibility of shaping and
developing these aspects.
What does this mean for your company?
If you intend to redesign or reestablish the innovation practice in your own company, you
can first renovate the pillars of your Stage-Gate system: strong market and customer
orientation within the entire process, real teamwork in cross-functional teams, clear and
binding resource decisions (“gates with teeth”). Last but not least, applying the funnel
principle means investing a little in many ideas so that you can invest a lot in the best
projects. This also means having the ability to say “no” to many ideas.
For example, Danfoss initially optimized and streamlined its existing process. The process
owner reports that projects were accelerated by up to 50% as a result of this measure. It
was only in a second step that Beyond Stage-Gate was introduced, which in turn led to a
reduction of the project lead time by some 30%.
If you think your company’s innovation system might benefit from an update, we
recommend that you first understand “Beyond Stage-Gate” in detail. “Winning at New
Products” contains all the necessary explanations. Alternatively, Professor Cooper will
be holding a seminar near Frankfurt on April 23rd-24th, 2018 and October 4th-5th, 2018.
He will show how Beyond Stage-Gate works in detail. Incidentally, this seminar is also an
excellent opportunity to (re)inspire executives working on new product developments or
who are responsible for the development of the innovation system within their company.
The lubricant of
a Beyond Stage-
Gate system is an
innovation-promoting
environment that is
characterized by lived
intrapreneurship,
learning and
opportunity-oriented
cooperation, and
incorporates these
principles when
learning how to deal
with mistakes or
failures.
8
Beyond Stage-Gate: Bold Innovation in Record Time
Reference Notes
1 Agile methods are widely adopted with the promise of shortened product development, better on-time delivery,
reduced development costs or increased productivity of the development project. The University of the Federal Armed
Forces Munich presented a study (Agile Entwicklung physischer Produkte – Überzogene Erwartung oder tatsächliches
Allheilmittel?) at the Agile PEP Minds 2017, which relativizes corresponding expectations/promises.
About the Authors
Mag. Peter Fürst is Managing Partner of five is innovation management, Consultant and
Trainer. Peter is a practiced hand at devising tailored methodologies for idea generation. He is
also expert at optimizing innovation systems. A Certified Management Consultant and lecturer
in innovation management at the University of Applied Sciences – Vorarlberg, Peter has over 15
years of high-level consulting experience. Peter’s passion is nurturing good ideas and guiding
them to their realization. As a thinker, he’s a bit of a maverick whose unique insights can lead to
bold, effective solutions.
Mail: p.fuerst@five-is.com, Tel: +43 676 552 2506
Dr. Angelika Dreher is Managing Partner of five is innovation management, Consultant and
Trainer. Angelika focuses on the big picture ─ on cultivating and managing meaningful innovation,
on fostering corporate cultures where innovative ideas can flourish. As a coach she leads highly
focused brainstorming sessions. As a consultant she devises effective management structures
for your innovation processes. Coming from the University of Innsbruck’s Institute of Marketing,
Angelika has more than 15 years of experience in innovation and change management. She is a
passionate communicator and an invigorating discussion partner.
Mail: a.dreher@five-is.com, Tel. +43 676 404 3849
About five is innovation management
As leading European experts for innovation and growth, we support our customers in
• finding the right search fields for innovation,
• generating great ideas for new products, services and businesses,
• improving their innovation system through Generation 5 Stage-Gate® principles and portfolio management,
• leveraging their innovation projects with design thinking and voice-of-customer research, business case development,
and agile project management,
• developing and strengthening their innovation culture.