What Is Stage-Gate® Innovation?
Making Sure Only Your Best Ideas Make It to Market
Rashid is nervous. He started his new job as a product development manager at a medical devices firm just eight months ago, but he's about to make the case to the board that it should pull the plug on several expensive R&D projects. What's more, many of the people at the table signed off on the original ideas.
In Rashid's view, poor management of the innovation process is one of the key reasons for his company's financial difficulties. Too much work is based on unfocused and flimsy research. Some ideas have gone through so many iterations that they've been overtaken by rival products, and yet the investment continues.
Things could have been very different if the company had used a more disciplined and structured creative approach, such as the Stage-Gate® Innovation Process.
In this article, we'll explore what Stage-Gate Innovation is, and see how you can apply it to creative development in your organization.
What Is Stage-Gate Innovation?
The Stage-Gate Innovation Process is a methodology for transforming new ideas into successful products using a structured and systematic creative process. It was originally developed in the 1980s by business academics Dr Robert G. Cooper and Dr Scott J. Edgett.
The approach begins by splitting the often complex and chaotic product-development process into six chunks, or "stages." An idea can progress from one stage to the next only if there's evidence to justify it doing so.
In Cooper and Edgett's terminology, this "Go/Kill" decision takes place at a "gate," which is managed by "gatekeepers." Figure 1 shows an example of the activities that you might conduct during each stage and gate.
Figure 1: An Example of Activities Carried Out During a Stage and Gate.
Properly operated stage-gates can help you to filter a mass of initial ideas until only the best remain, to receive the funds and effort that they deserve. This maximizes their chances of success, and minimizes investment in products or services that will likely fail.
There are other models that borrow from the Stage-Gate process, including Phase-gate and Waterfall. However, these focus more on project management, process improvement, and business change, rather than product innovation.
How to Apply the Stage-Gate Innovation Process
The stages that you'll be working through are shown in Figure 2, below.
Figure 2: The Stage-Gate Innovation Process.
There are six stages in total. Here's what each stage involves:
- Stage 0 – Discovery. First, generate lots of new ideas. Get creative by using ideation tools like brainstorming, design thinking, ethnographic research, and Doblin's 10 Types of Innovation.
- Stage 1 – Scoping. Now explore your ideas' true potential by doing a quick, inexpensive preliminary investigation. Explore the strengths and weaknesses of your ideas, and evaluate the extent to which they are viable business opportunities. SIPOC diagrams and CTQ trees can be useful tools to employ during this stage.
Stage 2 – Build a business case. Next, it's time to delve into the detail. You need to know whether an idea has a real shot at success. So, do some in-depth market research and use this information to develop a business case. Include a definition of the project, its risks and benefits, and the costs and timelines.
Stage 3 – Development. Now you have the exciting job of developing and designing a prototype. You’ll also begin to plan what you need for full-scale production. This stage will likely involve the biggest financial risk so far, so be sure to keep tight control of your budget.
- Stage 4 – Testing and validation. Trial the product with potential customers, and use their feedback to refine it. This stage also involves testing your branding and marketing, as well as the production operations that you sourced in stage three.
- Stage 5 – Launch. Finally, it's time to launch your product on the market. This stage is the beginning of full-scale production, marketing and sales activities.
Unlike many other innovation processes, Stage-Gate Innovation does not divide activities into a research and development stage, a marketing stage, and a production stage.
Instead, project activities are carried out in parallel. This means that multiple teams from across the business can be involved at any stage, which can save time and allow you to gain as much insight as possible into the ideas that you are exploring.
Remember that the purpose of each stage is to gather high-quality information about the likely benefits and pitfalls of your idea becoming reality. So, avoid attempting to "pass" each stage by any means, as you will only undermine the process. Instead, view "failure" as a valuable lesson to feed back into your future innovations, and an opportunity to reallocate investment into something more productive.
Each stage is followed by a gate meeting, in which the activities and findings so far are analyzed or "screened" by key decision makers, or "gatekeepers." They can use this evidence to make a well-informed decision on whether or not to continue investing in the idea. These meetings therefore serve as important quality control checkpoints.
To ensure that this quality is maintained throughout the project, try structuring each gate meeting around the following three factors:
Provide the gatekeepers with the results of the activities that you planned to complete during the previous stage. These could include research findings, your business case, a prototype, or test results. If you have not completed the activities, or you can't present your findings clearly, you'll not be able to go through the gate!
The gatekeepers assess your deliverables against strict criteria, appropriate to your organization and market. These will likely include:
- Strategic fit.
- Product and competitive advantage.
- Market attractiveness.
- Technical feasibility.
- Core competencies.
- Financial reward and risk.
Finally, it's decision time!
If it's a "Go," development is allowed to continue to the next stage, and you'll prepare an action plan to achieve everything in time for the next gate meeting.
If your deliverables fail to meet the criteria, the decision could be to "Kill" the idea and the gatekeepers will withdraw investment. Alternatively, they might opt to "Recycle" the idea and ask you to gather more information by repeating the previous stage, or they could decide to put everything on "Hold."
It's crucial that gate meetings don't just function as project reviews or milestone checks. Use them as robust quality-control checkpoints that decisively filter out ideas that aren't working. This means that only the best ideas move through to the final Launch stage of the process.
The Disadvantages of Stage-Gate Innovation
Stage-Gate Innovation's rigor and structure mean that it can be difficult to implement. The practicalities of organizing long-term, cross-team input, and regular gate meetings with senior decision makers, can be complex. However, skilfully applied change management techniques can encourage people to adopt the process in organizations that have never used it before.
Some people have criticised the process for being too inflexible for the fast-paced and unpredictable modern marketplace. Cooper has addressed these criticisms by developing a "next-generation idea-to-launch" system that incorporates elements of Agile and Lean methodologies, and by modifying Stage-Gate to accommodate Open Innovation.
There is also a common misunderstanding about the nature of the process: many people consider it a project management tool, rather than a methodology for creativity. Cooper argues that Stage-Gate should not be used as a substitute for project management. Instead, he says, project management should take place within an overarching Stage-Gate Process, to organize research, testing and, eventually, launch.
See our many resources on project management to gain a richer understanding of how to structure and run projects.
The Stage-Gate Innovation Process is a creativity tool that is designed to help organizations to invest in only their best ideas, by filtering out the weaker ones.
It does this by splitting the product development process into six "stages." These are:
- Building a business case.
- Testing and validation.
At the end of each stage, deliverables (the results of your research and analysis) are presented as evidence, and the idea is tested against a strict set of criteria by key decision makers, or "gatekeepers." The gatekeepers use this evidence to decide whether to Go, Kill, Recycle or Hold the idea.
A "Go" decision includes a commitment to resource the next stage. A "Kill" decision means that work should stop.