Your NPD process is stuck in the 80s when…
- Your organization still calls it ‘stage-gate’.
- Your teams think NPD is about project management.
- Your portfolio of projects consists of an Excel spreadsheet.
- Projects get into the process and never get killed.
- Concepts are generated from random brainstorming or are management pet projects.
- Your product line roadmap is a powerpoint that someone from marketing created.
A marketing friend of mine called me last week to complain about the behavior of his executive team during a recent gate meeting. The gate meeting turned into a senior leadership debate on business and product line strategy.
My friend was frustrated and indicated they didn’t have an innovation problem or even a lack of ideas. He indicated they knew how to run a project effectively through the development process. Clearly, NPD was not working though. What was the problem?
The answer, I explained to my friend, was that they did not have a stage-gate process problem. Instead, they had a product line strategy and roadmapping problem. There was no alignment on product line strategy and no working product line roadmap that guided new products into the pipeline, allowed decisions to be made on product projects, or a process for projects that didn’t meet strategic and risk criteria to be killed. Without that alignment, gatekeepers and portfolio managers have no framework in which to make decisions. What a mess!
When everyone knows it’s not working, and no one knows how to get it back on track, “Where do you start?”
Let’s go back and look at some of the components of the new product development (NPD) process. Phase-gated and stage-gated new product development processes are only subprocesses of a full architecture of NPD and innovation. If any of these subprocesses are suboptimal then your results will not be as strong as they could be, you are not gaining the benefits, and the competition may be winning the game.
The full architecture of NPD and innovation links the following processes together:
- Business strategy
- Product line strategy
- Product line roadmapping
- Concept generation
- Stage gate project management
- Lifecycle management
- Portfolio management
Let’s start with my friend’s executive declared ‘stage-gate’ problem. Gated processes have been around for decades now. They started in the 1950s with NASA and have gained momentum in industry since the 1960s. Over the past 30 years these processes have become a mainstream staple of new product development project management.
The stage-gate type process lays out an effective way to manage a single project at a time.
The gated process is considered by many practitioners to be mature in its lifecycle. Because of its mature lifecycle, many companies have come to understand that stage-gate alone is inadequate to achieve strategic new product development and innovation goals. If your company is stuck at the stage-gate capability level you have some catching up to do.
While the stage-gate type process helps streamline work flow, information flow, and decision flow of single projects, it is portfolio management that allows organizations to manage sets of many projects effectively, especially given the usual constraints of time and money. When trade-offs need to be made and resources need to allocated, it is portfolio management that optimizes the allocation of human resources, expense dollars, and capital expense, to achieve the product line and business strategy. If your portfolio management still consists of rolling up a list of projects into a view and report-out of all projects, and stops there, your company may need to take portfolio management, portfolio analysis, scenario building, and portfolio recommendations for management decision, to the next level.
Using portfolio management work flow and information flow to make strategic portfolio decisions is critical to maximizing your creation of value and conversion of products to cash flow.
In order to make portfolio recommendations, portfolio managers, analysts, and review teams need to have a framework from which to reference the gaps in the product line and business strategy. This is what product line roadmapping provides.
However, if the product line roadmap is simply a powerpoint created by someone from marketing, without cross organizational input and alignment, then the framework is a house of cards that has not been embedded into the organization and is not understood by the senior leadership team.
In addition, without the framework of the product line strategy and product line roadmaps, concept generation is random and not targeted to the gaps in your strategic plan and you increase the risk of missing your goals.
Roadmapping links the front end, stage-gate, and the portfolio to product line strategy to carry out the execution of business strategy for the purpose of converting products to cash flow.
My marketing friend asked if they really had to shut everything down to fix the process. The answer is NO. Companies build skills in these areas in parallel and one level of capability at a time. If a company conducted the implementation of each of these subprocesses sequentially it would take decades to gain the benefits. This frustrated marketer was relieved. I gave him an outline of areas on which to focus to help move his organization to the next level.
How to start:
- Everyone needs to be involved. Form a cross functional and cross organizational team to assess capabilities.
- Conduct work in parallel. Build capabilities in each sub process in of the full architecture of NPD one level at a time.
- Keep it simple. Don’t burden the organization with unnecessary steps.
Are you ready to take your NPD process out of the 80s and use the current best practices to create maximum value for your company? What are you waiting for? Let’s get going!