1 WinOvations, Inc. Copyright 2000 [email protected]l: 1-517-832-0075, FAX 1-530-831-5650 Beyond “Stage-Gate:” Beyond “Stage-Gate:” Faster and More Faster and More Profitable New Profitable New Business Development Business Development ECMRA New Contenders, New Approaches Greg Stevens, President, WinOvations SM , Inc. October 9-11, 2000 London
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WinOvations, Inc. Copyright 2000 [email protected] Tel: 1-517-832-0075, FAX 1-530-831-5650 1 Beyond Stage-Gate: Faster and More Profitable New Business.
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A. Stage-Gate® Systems Are “State of A. Stage-Gate® Systems Are “State of the Art” for New Business Developmentthe Art” for New Business Development
Today’s NBD Processes First Published Broadly in 1957-58* SC Johnson, Booz-Allen Little New Today
Widely Adopted in Last 20 Years By 60% of Firms
Per PDMA “Best Practices” Study “Stage Gate ®”: Trademark of Robert G. Cooper
*Booz-Allen & Hamilton Inc., Jones, Ralph W. 1958. Management of newproducts. The Journal of Industrial Engineering. IX (5). October. 429-435.*Johnson, S. C. and Conrad Jones. 1957. How to organize for new products. HarvardBusiness Review. # 57305. May-June. 49-62.
Got the Direction of the Changes Right Only 28% of the time 9 of 32 Forecasts: 1982-1999
When Experts Said Rates Would Rise, 72% of the Time They Fell
30 Technology Companies Highly Recommended in 1968 Lost an Average of 98.3% Value in 3 Years*
Same Happening Today for “Dot Com’s:” Bankrupt:
Boo.com; SurfBuzz.com; Red Rocket; Epidemic Marketing.com
*Devoe, Raymond F., The Devoe Report, “More Bugs on the Windshield of Financial Life (Past Visits To the Elephant’s Graveyard), Vol. 21, #2, Jan 15, 1999.
Doing ActivitiesDoing Activities WellWell in the F.F.E. of NBD in the F.F.E. of NBD Correlates with Success, But Correlates with Success, But Having a Having a
Stage-Gate Process Stage-Gate Process Does NotDoes Not Stage-Gate Process “Success Factor Studies” Are Like Saying: If You
Score a Lot of Points, This Correlates with Winning. But Installing a Stage-Gate System Does Not Ensure that the F.F.E.-NBD
Activities Are Done Any Better than Before: Most of the Stage-Gate Activities Were Already Being Done Before, Just Less
Formally Even After Installation, Most Firms Do Not Rigorously Use the Process (So In
Reality there Is Little Change) & The People Doing & Managing the Activities Are All the Same
Yet the Players Make an Enormous Difference, both in Sports and NBD
Myth #2: “Most NBD Efforts Myth #2: “Most NBD Efforts Do Do Succeed!”Succeed!”
Title of Article, by Robert G. Cooper*Title of Article, by Robert G. Cooper*
Reality: Most NBD Efforts Fail 89% Fail from Early Development Stage
Many Examples Iridium Satellite Phones
• Poor F.F.E. NBD Activity• Now Bankrupt
F.F.E. of NBD Is the Most Difficult of All Business Activities**
*R.G. Cooper et al, Research Management, Vol. 26: 20-25, Nov.-Dec. 1983**G. Stevens et al, “Creativity + Business Discipline = Higher Profits Faster from NPD,” J. Prod. Innov. Management, Vol 16: 455-468, 9/99
** Hultink, Erik Jan; Susan Hart, Henry S.J. Robben and Abbie Griffin. Launching new products in consumer and industrial markets: a multi-country empirical international comparison. Product Development and Management Association Research Conference Proceedings, October, 1997, 93-126
*Reference: G. Stevens and J. Burley, “3000 Raw Ideas = 1 Commercial Success!”
Research•Technology Management, 40(3): 16-27, May-June, 1997. Runner-Up, IRI
Myth #4: Myth #4: NBD Processes Work NBD Processes Work LinearlyLinearly
Mythic Linear View of Traditional “Stage-Gate®” NBD Processes:
Idea >> Stages >> Launch
Myth #5: “Our Stage-Gate Is Unique” Reality: 5-7 Stages in Most Stage-Gate Processes Reality: Most Companies Just Reinventing Cooper’s (or 1958 S.C. Johnson) Linear
“Stage Gate” Models, & Spending Millions Doing It.
Reality: NBD Is Reality: NBD Is Non-LinearNon-Linear in Early Stages. in Early Stages.Requires Requires Leaps of Creativity, Leaps of Creativity,
“Morphing,” “Morphing,” To Identify WinnersTo Identify Winners
Stages & Gates Still Exist but Real View of NBD Process Is Non-Linear, Especially in Fuzzy Front End (F.F.E.)Stages & Gates Still Exist but Real View of NBD Process Is Non-Linear, Especially in Fuzzy Front End (F.F.E.)
Data for New Genetic Paradigm of Creativity:Data for New Genetic Paradigm of Creativity:2 Key Experiments Addressing Effects2 Key Experiments Addressing Effects of of
Nature and Nurture on Personality:Nature and Nurture on Personality:
1. Study of Personality of Identical Twins Raised Apart Same Genetics, Different Environments
Separated at 3 Months Key Review Article: 1990 Science:*
2. Study of Adoptees Different Genetics, Similar Environments
The “Reverse Experiment” of Twins Raised Apart
*Thomas J. Bouchard, Jr., David T. Lykken, Matthew McGue, Nancy L. Segal, Auke Tellegen.. Sources of Human Psychological Differences: The Minnesota Study of Twins Reared Apart. Science. 1990. 12 October. 250. 223-228.
Reality: Identical Twins Reality: Identical Twins Raised Raised ApartApart Are Are As Alike As Those As Alike As Those
Raised TogetherRaised Together Both Fire ChiefsBoth Fire Chiefs Both BachelorsBoth Bachelors Both FlirtsBoth Flirts Both RaucousBoth Raucous
““We kept making the same We kept making the same remarks at the same time, and remarks at the same time, and using the same gestures. using the same gestures. It was spooky.”It was spooky.”
Suggests Zero Suggests Zero Contribution from Contribution from Childhood EnvironmentChildhood Environment
Correlations Between Correlations Between AnyAny Environmental Factors During Environmental Factors During
Upbringing, and Adult Personalities Upbringing, and Adult Personalities Are Totally Lacking: Are Totally Lacking: ZeroZero
True For Adopted Identical Twins Raised Apart & For Adoptees in Same Household Environment
“Reverse Experiment” of Identical Twins Raised Apart: No Genetic Similarity, But Same Environment During Childhood.
*Thomas J. Bouchard, Jr., David T. Lykken, Matthew McGue, Nancy L. Segal, Auke Tellegen.. Sources of Human Psychological Differences: The Minnesota Study of Twins Reared Apart. Science. 1990. 12 October. 250. 223-228.
“Genetics Is the Most Powerful Determinant “Genetics Is the Most Powerful Determinant of Most Psychological Traits*”of Most Psychological Traits*”
“New” Since Plato, Christ, Buddha, Schumpeter, Maslow...
“This Sudden Switch...From a Belief in Nurture, in the Form of Social Conditioning, to Nature, in the Form of Genetics and Brain Physiology Is the Great Intellectual Event ... of the Late 20th Century.”
“The Fix Is in! We’re All Hard Wired.” Tom Wolfe, Author, Forbes ASAP, December 2, 1996, p. 218
*Bouchard, Jr. Thomas J., “Twins and Type,”Presentation at the Association for Psychological Type, 10th Biennial International Conference, July 6-11, 1993, Long Beach, CA
Personality of Analysts in the F.F.E. of Personality of Analysts in the F.F.E. of NBD Was Measured Using MBTINBD Was Measured Using MBTI®®
Instrument & Correlated with Profits Instrument & Correlated with Profits
Two MBTI Personality Measurements Correlated With NBD Profits Earned After Project Was Later Developed & Commercialized by the Business: “N” for Intuition (Vs. “S” for Sensory) “T” for Thinking (Vs. “F” for Feeling)
No Benefit from Including Other Two Personality Measurements: • E/I (Extroversion – Introversion), or • J/P (Judging – Perceiving)
All All Personality Types Needed in Personality Types Needed in Business DevelopmentBusiness Development
“Rainmakers” (With Business Discipline) Needed Having Business Discipline Training & Coaching Starters: For the “Fuzzy Front End” of New Business Development
Many Other Types Also Needed Finishers: For Later Stages of New Business Development and Implementation
In Fact: Need More of Other Types than Rainmakers Because Later Development Stages Take Far More Effort
The New NBD System Provides More Than a Six-SigmaThe New NBD System Provides More Than a Six-SigmaImprovement Vs. The “Universal” NBD Success CurveImprovement Vs. The “Universal” NBD Success Curve
The New NBD System Provides More Than a Six-SigmaThe New NBD System Provides More Than a Six-SigmaImprovement Vs. The “Universal” NBD Success CurveImprovement Vs. The “Universal” NBD Success Curve
Dramatically Increases the Probability of Dramatically Increases the Probability of Success by Selecting Inherently Creative Success by Selecting Inherently Creative
People When Needed People When Needed As in Fuzzy Front End of New Business
Development (F.F.E. of NBD) Creativity Needed Because Starting Ideas Are Rarely
Commercial, & Must Be Morphed Key: Train & Coach Creative Types in Business
Discipline – Described Next “Leash Your CreativitySM”
Steps 3-4:Steps 3-4: Success-Wheel Success-Wheel Project Analysis Project Analysis Forms and Tests Draft Propositions Forms and Tests Draft Propositions
That Must be ProvedThat Must be ProvedA. Internally Tested Propositions:
Fit Vs. Gut-Level-Screen & Sustainable Competitive Advantage
B. Marketplace Tested Propositions Customer Visits: How Done, Spoken Needs, Costs, Value
C. Iterative-PropositionsSM: Unspoken Needs, New Ideas,
Winning Way in World When Know How to Win, It’s Time for Commercial
D. Applications of New System atD. Applications of New System at Honeywell (AlliedSignal): Honeywell (AlliedSignal):
The new approach “combines creativity with a high degree of business discipline. … we ended up with winning business plans that fully identified over $100 million per year in new sales potential.… with the likelihood of developing into several hundred million dollars per year businesses.”
“As a result of their work…we know the costs of the best competitors in the world, and how to beat them, by better meeting customers’ spoken and unspoken needs.”
Reality: Most NBD Systems Need Reality: Most NBD Systems Need Dramatic ImprovementDramatic Improvement
You Know Your NBD System Is Really Working IF: 95% of NBD Efforts Succeed After Early Development
Vs. 11% Per Universal Success Curve
Your Company Greatly Exceeds Your Industry In: Corporate Growth Rates, Profitability & Consistency Stock Appreciation & Book Value You & Most of Your Co-Workers Are Heavily Invested In Your
Company. New Employees Want to Work There, With Options
Economist, Forbes, Fortune, or BW: Picks Your Company as a Gem in that Industry
Six Sigma Improvements in Six Sigma Improvements in Speed and Speed and ProfitabilityProfitability Have Been Achieved in Early- Have Been Achieved in Early-Stage NBD Stage NBD SystemsSystems via Breakthroughs In via Breakthroughs In
1. Personnel,1. Personnel,2. Process &2. Process &3.3. CoachingCoaching
“A Well Directed Imagination is the Source of New Approaches and New Contenders.”
Key Reference ArticlesKey Reference Articles1. Stevens, Greg A. “Shattering Myths and Achieving Higher Profits Faster from Six Sigma Improvements
in New Business Development.” Technology Transfer and Innovation ’99 Conference, September 29, 1999, Melbourne, Australia. Also at the Project Management Institute (PMI) 9-00, Houston, TX.
2. Stevens, Greg, James Burley, and Richard Divine. “Profits and Personalities: Relationships Between Profits from New Product Development and Analyst’s Personalities.” Product Development and Management Association (PDMA) 1998 Research Conference, October 5-7, Atlanta, GA. pps. 157-175.
3. Stevens, Greg. A. and James Burley, “3,000 Raw Ideas = 1 Commercial Success.” Research · Technology Management 40(3), 16-27 (May-Jun, 1997).
4. “Innovation in Industry Survey.” The Economist. Feb. 20, 1999. p. 15. [Shows the Universal Success Curve for New Business Development from Ref. #3.]
5. Bacon, Jr., Frank R. and Thomas W. Butler, Jr. Achieving Planned Innovation®, A Proven System for Creating Successful New Products and Services. The Free Press/Simon & Schuster, 1998.
6. Stevens, Greg, James Burley, and Richard Divine. “Creativity + Business Discipline = Higher Profits Faster from New Product Development.” Journal of Product Innovation Management, 16: 455-468. 1999. [& Selected as “Outstanding Research Paper” from October, 1997 PDMA Research Conference.]
7. Stevens, Tim. “The Nature of Creativity.” Industry Week, Viewpoint Archive. IndustryWeek.com. June 29, 1999. pps. 1-4.
8. Others Are Listed Within the Body of the Presentation