Past Stage-Gate: Faster and More Profitable New Business Development .

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Beyond “Stage-Gate:” Faster and More Profitable New Business Development. ECMRA New Contenders, New Approaches Greg Stevens, President, WinOvations SM , Inc . October 9-11, 2000 London. Outline. State of the Art: “Stage-Gate” Processes
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Past "Stage-Gate:" Faster and More Profitable New Business Development ECMRA New Contenders, New Approaches Greg Stevens, President, WinOvations SM , Inc . October 9-11, 2000 London

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Outline State of the Art: "Arrange Gate" Processes Killer Myths Inhibiting the Fuzzy Front End (F.F.E.) of New Business Development (NBD) Debunking Myths & Achieving Six Sigma Improvements in New Business Development In Speed & Profitability Specific Applications

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A. Organize Gate® Systems Are "Cutting edge" 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 "Arrange Gate ®": Trademark of Robert G. Cooper

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B. A few Myths Inhibiting New Business Development (NBD) Today Many Grains of Truth In Current NBD Paradigm And Much Confusion "Get the Assumptions Wrong, and Everything that Flows from Them Is Wrong." Peter F. Drucker, "Administration\'s New Paradigms" Forbes, Oct. 5, 1998, pp. 152-177

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Problem: "NBD" (& Other) Experts Are Often Wrong WSJ Survey of Expert Economists Forecasting 30-Year Treasury Interest Rates (WSJ: 1/4/99): 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 "Speck Com\'s:" Bankrupt:;; Red Rocket; Epidemic *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.

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Myth #1: Stage-Gate Processes Work (Better than Nothing)! Reality: No Correlation Between Companies with Stage-Gate or other NPD Processes and Commercial Success* Per Latest IRI/CIMS R&D Database Study: * Research•Technology Management , Roger L. Whiteley, Alden S. Bean and M. Jean Russo. July-August, 1998, 15-16. & Even Per R.G. Cooper\'s Own Research** Stage-Gate®: Trademark of Robert G. Cooper **J. Nudge. Innov. Manag. 1999; 16: 115-133

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Doing Activities Well in the F.F.E. of NBD Correlates with Success, But Having a Stage-Gate Process Does Not Stage-Gate Process "Achievement Factor Studies" Are Like Saying: If You Score a Lot of Points, This Correlates with Winning. In any case, 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 Little Change Brings Little Benefit

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Reality: Stage-Gate Processes Little Changed Since 1950\'s in Either Processes or Results Reality: No Measurable Improvements in 40 Years! In Spite of All the "Progressions" & "Best Thinking" Indicating Few Substantive Changes & Same Globally: Americas, Europe, Asia 60% Success from Launch* Same Globally: Americas, Europe, Asia Per Robert Cooper (3/99 JPIM), & Many Other Studies 11% Success from Early Development Stage One in Nine Success Rates *Cooper et al, J. Goad. Innov. Manag. 1999; 16: 115-133

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Like the Fable of The Emperor\'s Clothes No Better Off With, or Without Them Also Like Medicine in the 1800\'s: When Patients Staying Home Got Well Just as Often as Those Visiting a Doctor And Witch Doctors "If a Factory Produced Such Low Quality, it Would be Shut Down." Cooper et al, J. Push. Innov. Manag. 1999; 16: 115-133

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"Craziness Is Doing the Same Thing Over and Over and Expecting Different Results." Benjamin Franklin (40 Years with No Improvement Would Probably Qualify for the "Again and again" Part)

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Myth #2: "Most NBD Efforts Do Succeed!" 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, "Imagination + Business Discipline = Higher Profits Faster from NPD," J. Push. Innov. Administration , Vol 16: 455-468, 9/99

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Universal Industrial Success Curve Shows Most NBD Efforts Unsuccessful* 10,000 3000 Raw Ideas (Unwritten) 60% Success Rate from Launch Unchanged in 40 Yrs. In Spite of All the "Enhancements" * ** 1000 300 Ideas Submitted 100 Number of Ideas 125 Small Projects 9 Early Stage Devel. 10 4 Major Devel. 1.7 Launches 1 Success 1 *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 "Best Paper of the Year." 1 2 3 4 5 6 7 Stage of NBD Process ** Hultink, Erik Jan; Susan Hart, Henry S.J. Robben and Abbie Griffin. Propelling new items in customer and modern markets: a multi-nation experimental international examination. Item Development and Management Association Research Conference Proceedings , October, 1997, 93-126

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Myth #3: Failures Are Good! Myth: "On the off chance that You Are Not Failing Enough, You Aren\'t Trying Hard Enough" Like Saying "Terrible Quality is Good!" Reality: "There Is a Quality Crisis in Product Innovation" R.G. Cooper: *J. Nudge. Innov. Manag. 1999; 16: 115-133 Because Most New Business Efforts Do Fail Today, We Desperately Search for Excuses! What We Really Need: More Successful Systems; Higher Quality Results, & Profits

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Profiting From Failures Can Happen (the Grain of Truth), But Mostly Failures Are Routine & Devastatingly Wasteful Average Life of Fortune 500 Co\'s is 40 Years One Major Chemical Co.: \'82-\'92: Spent $13 Billion "With No Contribution to Bottom Line" per CEO \'60\'s-\'70\'s: Spent $16 Billion on R&D, "Mechanical Black Hole" per Wall St. Diary While Doing "Everything Right" per Today\'s Standard Practices Frightening Massive Layoffs: Over 30%

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1 2 3 4 5 6 7 Myth #4: NBD Processes Work Linearly 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. *Trade Name of R.G. Cooper & Associates

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Reality: NBD Is Non-Linear in Early Stages. Requires Leaps of Creativity, "Transforming," To Identify Winners 2 3 4 1 2 3 4 5 6 7 2 3 4 Non-Linear F.F.E. Direct Stages & Gates Still Exist however Real View of NBD Process Is Non-Linear, Especially in Fuzzy Front End (F.F.E.)

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Myth #6: Everyone Is Creative! On the other hand Can Be Taught to Be Creative Fa La! Along these lines Everyone Can Create New Products in the "Fluffy Front End" of NBD Just Read the Manual, Follow the Steps

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Myth #6 Restated: "The Environment (Nurture) Largely Determines Personality" 67% of Americans Believe Can Readily Change Personalities* Popular conviction, & "Politically Correct" Standard Psychology Texts of 1970\'s & \'80\'s: Taught Individual Personality Was Determined Largely by Environment, or Nurture: Said: "If Identical Twins Raised Apart Could Be Studied, Their Personalities Would Be " Enormously Different **\'\' * Roper Reports , 1993, 93-8 (November), Roper Starch Worldwide Inc., NY, NY ** Introduction to Personality , Walter Mischel, Holt Reinhart and Winston, 1976, 2rd Ed., p. 290-291

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Reality: ~80% of Core Unchanging Adult Personality & Creativity Determined by Genetics Stable Core Adult PersoNality Overall Personality

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Data for New Genetic Paradigm of Creativity: 2 Key Experiments Addressing Effects of Nature and Nurture on Personality: 1. Investigation of Personality of Identical Twins Raised Apart Same Genetics, Different Environments Separated at 3 Months Key Review Article: 1990 Science:* 2. Investigation of Adoptees Different Genetics, Similar Environments The "Switch Experiment" of Twins Raised Apart *Thomas J. Bouchard, Jr., David T. Lykken, Matthew McGue, Nancy L. Segal, Auke Tellegen.. Wellsprings of Human Psychological Differences: The Minnesota Study of Twins Reared Apart. Science . 1990. 12 October. 250. 223-228.

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Reality: Identical Twins, Raised Apart Have Very Similar Personalities

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Reality: Identical Twins Raised Apart Are As Alike As Those Raised Together Both Fire Chiefs Both Bachelors Both Flirts Both Raucous "We continued making similar comments in the meantime, and utilizing similar motions. It was spooky." Suggests Zero Contribution from Childhood Environment

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EEG Brainwaves of Identical Twins Raised Apart Show 95% Correlations * Similarity Due to Genetics, As Share No Common Nurture After Separation Identical Twins Raised Apart Non-Identical Twins Raised Together 95% Correlation *"How Individual Are Human Brainwave Patterns?" by H.H. Stassen, Psychiatric University Hospital Research Department, Zurich, Switzerland, 1992 p. 75 & 83.

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Correlations Between Any Environmental Factors During Upbringing, and Adult Personalities Are Totally Lacking: Zero True For Adopted Identical Twins Raised Apart & For Adoptees in Same Household Environment "Turn around Experiment" of Identica

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