Staged Gate accepts failure instead of ensuring success

June 16, 2010 · Posted in innovation 

Innovation projects have many risks. Some of these risks are controlled with project management techniques. Other risks are assumed unavoidable. Staged Gate attempts to limit the impact of the risks by setting up regular intervals to fail and start over. That is a fancy way of saying trial and error. Predictive Innovation® can prevent the failures, thus saving time and money.

Projects like constructing a building have well known steps. Budgets and schedules can be accurately estimated because the tasks have been performed before. Innovation projects always deal with some aspect that has never been done before. That newness introduces two types of risk, first is what to do and second is how to do it. This breaks down into 6 mandatory sequential outcomes. All 6 must be completed successfully for the innovation project to succeed.
How Staged Gate Fails Innovation

The first and most important step is defining the criteria for achieving innovation. Since most processes assume that innovation depends on creativity, this step is most often left up to chance. Errors made at the first step have impacts on every step of the process and aren’t always realized until the end. Staged Gate is an attempt to limit the effects of these errors by cutting the losses. Since the criteria for real success is not established at the beginning, Staged Gate allows failures to progress too far and potential successes to be killed too often.

Most innovation Staged Gate processes start with a Concept or Idea stage. Creative people brainstorm or managers sift through the suggestion box to select a concept to try. Without a clear definition of the problem being solved or the objective criteria of success, concepts are approved based on emotional reactions.
Marketing research attempts to put numbers to the emotional reactions by asking potential customers to rate the concepts. Opinion polling is expensive and introduces many sources of error.

Objective criteria are frequently selected without a clear understanding of the real problems customers want solved. Declaring, “the new product must be 20% faster than the old product”, does not ensure the product will be successful if speed was not the most important concern facing customers.
Poorly defined criteria leads to poor designs. Concepts for products frequently exceed the capabilities of current technology. That causes designers to waste time on the impossibly futuristic product when a perfectly viable product would be successful.

The development stage is often the first point that failures are apparent. A large investment has already occurred so failure at this stage is expensive. Since the investment at this stage has already been significant its painful to decide to start over. Typically failures in development will loop back through design causing the final result to be very different from the originally approved concept. Assuming the concept had merit, changes to get it developed erase the potential for success.
Communicating the value of the innovation depends on having the criteria the customers demand. Without the criteria for innovation marketing devolves in to hyperbole such as “new and improved” and expensive repetitive advertising. Furthermore, without a way to measure how well the new product satisfies the customers criteria, its difficult to communicate the changes needed to improve results.

Finally, products must be delivered at the correct time to be successful. Too late is obviously a problem, resulting in a complete loss of investment. Delivering too soon can also cause a complete loss of investment or worse. The single most important way to ensure successful delivery of a product just-in-time is to select the correct concept based on the correct criteria.

Staged Gate can’t help prevent delivering too late. If a product is late the only solution is to start over with a new concept. For small businesses that is usually not possible.

Staged Gate can help manage a product that is too soon. However, without the criteria for innovation defined Staged Gate can only catch the problem after the full investment is made. If the innovation criteria is not defined, the business usually wastes time an money to develop a market that is not ready. This increases the total cost and increases the risk that a competing product will be introduced and capture the market.

The only way to ensure successful innovation is to define the correct criteria then select the correct concept based on those criteria. Predictive Innovation® first accurately defines the criteria for products that will be innovative when they are delivered. To successfully innovate you must design products that will satisfy desires when the product reaches the market. Designing for today’s desires will open you up to delivering too late.

As the name suggests, Predictive Innovation® predicts innovations. The key to this is defining the innovation criteria. All innovations can be described with an objective set of criteria that customers use to decide their desires have been satisfied. In English the criteria forms a statement like,
“When A and B and C, then my desires are satisfied.”

When the current satisfactory values for A, B, & C are met customers will require more. This pattern repeats until the Ideal Criteria is reached. Beyond that point customers won’t be satisfied any further by increases to those criteria. Since its possible to describe the Ideal Criteria for a product at any state of its life cycle, you can predict all successive innovations for a product. We call this the Future Map.

By knowing the Future Map you can accurately plan your work so that you deliver the right product at the right time.

Future Maps help you decide what to make and when to make it, but it also helps you know how to make it. Since you can see all the possible innovations for a product, you can choose concepts you are certain you can design and develop. This greatly streamlines the process. And if you do have a problem a Staged Gate has a way to recover. You simply switch to the next closest innovation from the map. The majority of your investment is re-used.

Predictive Innovation® ensures successful innovation, minimizing risk and maximizing profits.