Articles
Get Fat Fast: Surviving Stage-Gate® in NPD
Journal of Product Innovation Management, November 2010
Kishore Sengupta ; Luk Van Wassenhove ; Kim Van Oorschot and Henk A. Akkermans
Stage-Gate® is a widely used product innovation process for managing portfolios of new product development projects. The process enables companies to minimize uncertainty by helping them identify—at various stages or gates—the “wrong” projects before too many resources are invested. The present research looks at the question of whether using Stage-Gate® may lead companies also to jettison some “right” projects (i.e., those that could have become successful). The specific context of this research involves projects characterized by asymmetrical uncertainty: where workload is usually underestimated at the start (because new development tasks or new customer requirements are discovered after the project begins) and where the development team's size is often overestimated (because assembling a productive team takes more time than anticipated). Software development projects are a perfect example. In the context of an underestimated workload and an understaffed team, the Stage-Gate® philosophy of low investment at the start may set off a negative dynamic: low investments in the beginning lead to massive schedule pressure, which increases turnover in an already understaffed team and results in the team missing schedules for the first stage. This delay cascades into the second stage and eventually leads management to conclude that the project is not viable and should be abandoned. However, this paper shows how, with slightly more flexible thinking (i.e., initial Stage-Gate® investments that are slightly less lean), some of the ostensibly “wrong” projects can actually become the “right” projects to pursue. Principal conclusions of the analysis are as follows: (1) adhering strictly to the Stage-Gate® philosophy may well kill off viable projects and damage the firm's bottom line; (2) slightly relaxing the initial investment constraint can improve the dynamics of project execution; and (3) during a project's first stages, managers should focus more on ramping up their project team than on containing project costs.

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