By David Stokes, New Product Development and Innovation Professional
Hi
I mentioned in one of my earlier blogs about
decision making, that it was based on a paper I presented at a conference. In fact, it was a project management conference. I had been in project management for over 10 years, but at Navman I got more involved in implementing product development best-practices (Stage-Gate) across the organisation (which included project management best practices). Because I had learnt a lot about techniques to improve the effectiveness of decision making decision due to its importance in Stage-Gate, I thought that other project managers would be interested in it – after all, don’t all projects involve some sort of decision making?
While the paper seem relatively well received, I got a question from a couple of the people who had never worked in a product development environment, which stumped me at the time: why are product development projects done in that way, with so much focus on the decision making at the gates? In fact, I could sense their unease that the power and control of the project manager was significantly diminished by having multiple gates throughout the duration of the project in which the project could potentially be killed.
So that got me thinking.... why are product development project different from other projects, eg: IT, construction, etc ?
Here’s some ideas:
• Multidisciplinary
Product development projects often involve quite a number of people across many functional areas, eg: product management, marketing, financial, operations, manufacturing, support, supply chain, marcoms, etc. Therefore it requires the coordination of a wide range of functional areas and interdependent activities across the organisation. In order to ensure that all these come together in perfect unison at the launch of the product, there are a number of check points (AKA Gates) in the projects where it is validated that each of the disciplines are where they should be at that point in the project.
• It’s a funnel!
Early on in a product development project, it’s not always known whether the product is going to be a success or not. There are many factors, internal (cost, technical, resource availability, etc) and external (market trends, competitors, regulatory, etc) that can impact whether a product will be a success. So early on, the focus is on trying to determine whether if the company develops the product, it will be a success or not, eg: market assessment, business case, etc. But this check is done not just at the start, but all the way through the project. As the project progresses through the stages, more accurate and reliable information becomes available which may influence whether the project should continue. Also, things change! An assumption made about the market earlier on in the project proves to be incorrect – now the business case doesn’t stack up. So rather than the project continue with the risk of being a failure, a decision is made to kill the project and those resources can then be focused on another project that has greater likelihood of being successful.
• Product Launch
Once the project is complete there are a number of operational support activities that need kick-in and operate smoothly as the product is launched into the market
• New Product Development
Products can have unique requirements and may be reliant on technologies that don’t currently exist or still need to be commercialised
Stage-Gate
Over the years product development best-practices have been developed and improved/refined across a significant number of companies and industries. One of the most widely used is Stage-Gate.
In trying to explain Stage-Gate from a project management perspective, what I say is that Stage-Gate is Project Management for Product Development Projects.
So here’s a list of some of the key attributes of Stage-Gate and I’ve highlighted the aspects of project management they cover:
-
Stage deliverables contain the information required to make a go / no-go decision at the gate at the end of the stage. This include key metrics - “if you can’t measure it, you can’t manage it”, eg: cost - Cost Management
-
Project governance is provided via the Gate-Keepers, a cross-functional decision making team, who review the project at each of the scheduled gate reviews. Their decision is based on the information provided by the project team in the form of predefined stage deliverables for the particular stage in the product development lifecycle
-
Stage-Gate is a Risk Management technique that focuses on reducing risk throughout the product development lifecycle
-
Focus the early stages on scoping the project and product requirements
-
At each of the gates, risk is assessed across each of the functional disciplines by the gatekeepers
-
The gates provide standardised review points that facilitate more effective decision making. It clearly defines what information is required (based on a standardised set of deliverables), the decision that needs to be made (go / no-go / redirect) and the roles & responsibilities of the decision makers in making the decision Human Resource Management
-
Stage-Gate can be applied to the “front-end” of the product lifecycle, to evaluate product ideas to select the ideas that have the most likelihood of being successful. Additionally, it allows for the management of the projects as a portfolio, selecting the projects that provide the best “mix” of projects (eg: risk, innovativeness) that will generate the best “value” for the company (eg: revenue, market share, etc)
So what do you think – do you agree? Are there aspects of project management that are not covered in some way by Stage-Gate?
Cheers
David
