3 tips for turning NPD stage-gate into a benefit, not a burden

Love it or hate it, Stage-Gate is a powerful NPD project management tool used by many large FMCG businesses. When you divide your project into key decision-making milestones, you can collaboratively progress towards a winning product. Seems like a no-brainer, right?

Unfortunately, the process isn’t always optimised within organisations. Companies often complain about clogged gates that feel clunky and inefficient. In this article, I’m sharing three practical ways to solve common Stage-Gate problems. Let’s make innovation lighter, faster and more lucrative - once and for all.

stage-gate perks and pitfalls

Done right, Stage-Gate helps teams make smarter, faster decisions. Its stable structure provides a roadmap for innovation that enables businesses to quickly identify potential problems and kill projects that aren’t viable. All of this facilitates more predictable and efficient product development.

On the other hand, Stage-Gate’s inherently sequential process can make innovation less agile. When you’re following linear steps, it’s harder to adapt to new information or market conditions. Often, there’s a reluctance from teams to re-iterate and redevelop an idea, concept or product that needs more work vs. pushing on with the original solution. The level of scrutiny and formality can slow progress down, too. That being said, years of experience have taught me a thing or two about making Stage-Gate work for you.

1. don’t let the tool become the master

Have you ever witnessed office politics hold up the NPD process? Sometimes, Stage-Gate can be used as a bargaining tool to delay NPD when stakeholder approval stalls. This might occur due to a lack of clarity around an idea’s potential or as a power play to argue a point.

A simple way to remedy this issue is pre-aligning benchmarks for success. Set up financial targets (e.g. revenue or profit) and consumer validation targets at each stage. Think of it like “red light, green light”; you only go ahead if the numbers work. This approach is less subjective and more objective – yes or no. Choose key indicators of success that are important to the business. A senior discussion should only be required if something misses the mark.

While the financial targets are internal, there are also external benchmarks for success on desirability, viability and feasibility criteria. Desirability: What insights and research results will confirm consumer interest? Viability: What business case financial hurdles need to be met? Feasibility: What resourcing and production capabilities must we have? You can set the desirability targets through research (in terms of appeal, purchase intent, likability and uniqueness). The findings will help you establish whether there is a sizeable enough opportunity to proceed.

2. be iterative to move with agility

It’s easy to assume that Stage-Gate requires you to be sequential from start to finish. However, it’s actually much more effective to be iterative during each stage. This way, you can optimise your NPD and explore multiple solutions, rather than just one.

In practice, it simply doesn’t make sense to test and develop each part of a new product sequentially. Instead, you could be iteratively evaluating claims, packaging format, benefit statements, nutritional information, naming conventions and colours. This strategy will help you establish whether a bundle works together.

Design sprints are a fantastic way for consumers to quickly and easily assess a whole bundle. This methodology combines multiple stimuli (e.g. pack, product, flavour, claims, language, branding) in different ways so consumers can share what they like, don’t like and might prefer.

3. develop a funnel, not a tunnel

Have you ever been tempted to charge forward with a specific opportunity or set idea? It happens to the best of brands, but this is tunnel thinking; one idea goes in and one must come out. The problems come when an idea is struggling to become a viable product solution, but your team fights desperately to push it through the gates. You chip away at a single product to make it fit the criteria because you have to launch something. This situation is no fun for anyone.

The solution involves starting broad and using the process to narrow things down by weeding out the weaker offers en route. This way, you can choose the strongest NPD rather than clutching at one (potentially flawed) idea. Imagine you want a new potato chip to compete in a crowded market. This is the perfect opportunity to cast your innovation net wider. Explore other emerging sub-segments to find a new opportunity, such as vegetable chips, gourmet chips, better-for-you chips and kids’ lunchbox snacks.

Attrition is a natural part of innovation. That’s why, in ideation, we like to get over 100 ideas that might funnel down into 10 winning concepts. After testing, one to three of those ideas will hit your benchmarks and make it onto the shelf. That might sound like a lot of effort, but you could end up filling your pipeline for years to come! Now, that’s smart innovation if you ask me.

Just like any other tool, Stage-Gate can be used efficiently or inefficiently. Employed incorrectly, it can feel like a “necessary evil” at best. However, when Stage-Gate is applied skillfully, it’s your secret weapon for creating winning products.

If you’d like to start implementing Stage-Gate with more success, the PLAY Innovation team can help. We’re experts in retuning NPD processes and identifying consumer-led opportunity areas to ensure you create products that consumers love and retail clients range. Email me at becky@playinnovation.com.au to get started.