The last few years have played witness to the broader business community’s near obsession to Innovate Faster and Cheaper. For far too many companies, this singular focus has produced more problems than results. I am all for faster and cheaper and, yes, our innovation methodologies and frameworks are purpose-built to continuously improve an organization’s speed, in-market success, profitability and productivity. However, I am not a fan of the approach I see many companies take as it typically results in teams slashing project timelines, reducing resources, cutting corners, and compromising the holy grail of innovation, the differentiated product, for the skinny scope that achieves fast and cheap. The reward? Poorly performing products in the marketplace, a portfolio of low-value (but fast and cheap) new product projects and a drop in return on innovation investment (not to mention dissatisfied customers).
I am a fan of learning from the best. Our best practice research confirms that the companies that are getting faster and becoming more profitable are going about it differently. Top performing businesses first place emphasis on a well-designed, structured Innovation Management Framework to enable flexibility in their strategy and agility in their decisions – contributions typically performed by the most senior leaders in an organization. Does it feel counterintuitive to rely on structure to achieve speed and flexibility? How does this work?
Organizations with a structured Go/Kill decision framework like Stage-Gate can forgo the development of a detailed strategic operating plan that produces a finite list of development projects to execute. Strategy is more directional in nature and you can get away with a high-level list of ‘placeholder’ projects, initially. For example, we will hold xx resources in place to execute approximately xx # of projects that will approximately generate xx revenue. This placeholder expresses the leaders’ innovation agendas and expectation for pace and return on investment. The Stage-Gate framework is used to initiate and guide the initial projects through execution as quickly as possible, but one Stage and one Gate at a time. With time, the strategy begins to firm up and reflects changing market conditions. As this happens, Gates are used to accelerate projects that continue to advance the strategy, new projects are initiated to close gaps and projects that no longer demonstrate good fit or value are killed. This behavior shifts from finalizing a detailed list of projects to execute in the coming year to managing a dynamic pipeline that is a hallmark behavior of Stage-Gate. This is how top performing businesses approach innovating faster and cheaper. The leaders themselves are driving faster, more profitable and more strategic innovation by engaging at the Gates. The teams follow suit and apply the right amount of process rigor to support each project’s unique needs.
Will your Strategic Plan for the next year allow you to commit to do fewer (more strategically important) projects and to do them very, very well…? ‘Right Projects Right’?
Contact Bernd Becker at firstname.lastname@example.org to learn more about using Stage-Gate to manage a dynamic pipeline.
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