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IPD Processes: Stage-Gate and Cagan/Vogel. Robert Monroe January 23, 2012. Goals - By The End Of Class Today, You Should:. Understand why organizations use a structured method such as Stage-Gate or Cagan/Vogel to direct their innovation investments efficiently and effectively - PowerPoint PPT Presentation
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Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
IPD Processes:Stage-Gate and Cagan/Vogel
Robert MonroeJanuary 23, 2012
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Goals - By The End Of Class Today, You Should:
• Understand why organizations use a structured method such as Stage-Gate or Cagan/Vogel to direct their innovation investments efficiently and effectively
• Understand the concept of stages and gates in the Stage-Gate process
• Be able to use the SET factor analysis to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Innovative Product Development Processes
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
The Stage-Gate Process
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Launch*
The Cagan and Vogel Innovation Process
Realize Conceptualize UnderstandIdentify
* The launch stageis not part of theCagan / Vogel
process but it issomething we will
explore
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
The Good News: Lots of Ideas
CustomerFeedback
EmployeeSuggestions
CompetitiveOfferings
TechnologyBreakthroughs
Lots of Ideas!
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
The Bad News: Limited Resources
OrganizationalResources
NPD
ResourcesAvailable forInnovativeNew ProductDevelopment
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
The Problem: Which Ideas Do We Invest In?
Lots of Ideas
NPDResources
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Resource Allocation: The Stage-Gate NPD Process
• In the early stages of developing new market opportunities and bringing innovative services and products to market, one of the most critical tasks is appropriately backing and funding the most promising opportunities, while eliminating non-promising ideas as quickly and as cheaply as you can determine they are not promising, but no quicker.
• The Stage Gate process [CE09] provides a rigorous, structured way for organizations to do so
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Overview Of The Stage-Gate Process
• Stages are steps in the New Product Development (NPD) process where a specific set of work activities are done to produce a specific set of deliverables
• Gates are decision points that come at the end of each stage.
Stage n Stage n+1Gaten+1
Gaten+2
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
New Product Development (NPD) Stages
DiscoveryStage
Gate1
Stage 1:Scoping
Gate2
Stage 2:Biz Case
Stage 3:Development
Gate2
Gate4
Stage 4:Test &
Validate
Gate5
Stage 5:Launch
Source: [CE09] page 8.
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Gates: Go/No-Go Decision Points
• Gates are key decision points in the process– Always a cross-functional group of gatekeepers– Gates should force a decision to be effective
• Possible outcomes from a gate meeting:– Go: move ahead to the next stage, commit appropriate resources– No-Go: the project does not meet the criteria required to move forward. Stop the
project and reallocate project resources.– Recycle: the project shows promise but has not yet met the criteria for moving to
the next stage. Continue work in the current stage, return with additional information. Resources are allocated as needed to get requested information
DecisionCriteria
DeliverablesFrom Previous
Stage
Decision,ResourcesAllocated,Outputs
Source: [CE09] page 10.
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Managing Risk With Stage-Gate
Level of risk and uncertainty
Time(Stages)
Resourcesallocated
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Launch*
The Cagan and Vogel Innovation Process
Realize Conceptualize UnderstandIdentify
* The launch stageis not part of theCagan / Vogel
process but it issomething we will
explore
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Mapping Stage Gate to Cagan/Vogel Process
Source: [CV02] Chapter 5 and [CE09]
Launch* Realize Conceptualize UnderstandIdentify
DiscoveryStage Scoping
Stage 1 Business CaseStage 2
DevelopmentStage 3
Stages 4 & 5
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 1: Identify The Opportunity
• Goals:– Identify and evaluate a set of promising Product Opportunity Gap (POG’s)– Choose the most appropriate POG to move forward with
• Primary results:– Product opportunity statement (hypothesis)– Initial scenario that illustrates the opportunity
• Methods– Brainstorming, observing, researching Social, Economic, and Technology (SET)
factors– Generating POGs based on SET factors– Evaluating and filtering POG ideas generated– Scenario generation, feedback, and refinement
Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 2: Understand The Opportunity
• Goals:– Much deeper understanding of customer and customer’s Value Opportunities
(VO’s), translated into product criteria
• Results:– In-depth understanding of the customer/user, captured through refined
customer scenarios and VOA’s– List of product characteristics and constraints
• Methods– Primary research: observe, interview, listen, task analysis, stakeholder analysis– Secondary research: human factors, lifestyle reference, dive deeper on SET
factor changes Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 3: Conceptualize The Opportunity
• Goals:– Turn Value Opportunities into product concepts that are perceived as
useful, usable, and desirable– Generate many concepts, evaluate, refine, iterate, reduce to a single
concept to move to stage 4
• Results:– Clearly articulated product concept– Clear market definition– Visual, and/or physical prototypes that can be shown to and evaluated by
potential customers– Demonstration or belief that product is technically feasible
Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 4: Realize The Opportunity
• Goals:– Develop product or service – move from prototype to product– Complete marketing plan, financing, initial production, etc.– Product or service is ready to be sold to customers
• Results:– Production processes defined– Go to market plan completed (marketing, positioning, etc.)– Sales channels lined up– Placement and contracts with distributors, retailers, etc. negotiated
Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 5: Launch the Product
• Goals:– Deliver the product or service to customers– Start generating revenue– Ramp up production– Support organization is up and running
• Results:– Product or service offering is available to customers– Distribution channels functioning– Sales lead to inbound cash flow
Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Managing Risk With Stage-Gate
Level of risk and uncertainty
Time(Stages)
Resourcesallocated
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
SET Factors and Product Opportunity Gaps
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Phase 1: Identify The Opportunity
• Goals:– Identify and evaluate a set of promising Product Opportunity Gap (POG’s)– Choose the most appropriate POG to move forward with
• Primary results:– Product opportunity statement (hypothesis)– Initial scenario that illustrates the opportunity
• Methods– Brainstorming, observing, researching Social, Economic, and Technology (SET)
factors– Generating POGs based on SET factors– Evaluating and filtering POG ideas generated– Scenario generation, feedback, and refinement
Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.
Launch* Realize Conceptualize UnderstandIdentify
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Social, Economic, and Technology (SET) Factors
• Identifying and observing broad Social and Economic changes in a society can help you discover gaps that current products and services are not meeting.
• Likewise, Technological advances can create opportunities to create products and services that would have been previously technically impossible – Technological advances often also create new (and different) problems for
people or societies, which can also be fertile ground for product opportunities
• In general, you are looking for broad, enduring changes to use as a basis for new product opportunities
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
SET Factors
Social• Social and cultural trends• Reviving historic trends
Technical• Introduction of new technologies• Re-evaluating existing technologies
Economic• State of the economy• Change in focus on where to spend money• Levels of disposable income
ProductOpportunity
Gap
Source: [CV02] page 9
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
SET Factor Exercise
• Divide into three groups (one S, one E, one T)
• Work as a group to come up with a list of at least 20 broad forces / changes / trends for your assigned topic (S, E, or T) that affect personal transportation in some way
• Identify trends that are applicable to:– Qatar– The GCC countries– Across Arab League nations – Throughout the world
• Write them down and be prepared to present them for discussion using the whiteboards around the room.
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
SET Factor Discussion
• Do you see some common themes emerging?
• Which of these SET factors are mostly the same throughout the GCC nations? Throughout the Arab League nations? Globally?
• Which of these SET factors vary considerably throughout the GCC nations? Throughout the Arab League nations? Globally?
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
Product Opportunity Gaps (POG’s)
• The next step is to identify Product Opportunity Gaps, or POGs based on your SET factor analysis.
• A Product Opportunity Gap is the gap between what is currently on the market and the possibility for new, or significantly improved, products that result from emerging trends.– Source: [CV02] page xxxi (glossary)
• Identifying product opportunity gaps will be the focus of Wednesday’s class…
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
So What Conclusions Can We Draw?
• Take a few minutes to think about what conclusions you can draw from all of the examples and exercises discussed in class today.
• Write down two conclusions / observations that you are willing to share with the class
Carnegie Mellon Qatar ©2006 - 2012 Robert T. Monroe Course 70-446
References
[CE09] Robert G. Cooper and Scott J. Edgett, Successful Product Innovation, Product Development Institute, Inc., 2009. ISBN: 978-1-4392-4918-5.
[CV02] Jonathan Cagan and Craig M. Vogel, Creating Breakthrough Products, Prentice Hall, 2002, ISBN: 0-13-969694-6.
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