23 May Keepers of the Gates

Ask almost anyone in a new product development function and they’ll tell you they’ve had experience with what I call a “staged approval system” model. For those who haven’t dealt withstaged approval systems, they are, as the name implies, models that break up the new product development process into stages with approval “gates” allowing progress onto the next stage. Different users and different companies have different stages, but they usually look something like ideation, develop analysis, develop business case, develop prototype, test, and launch. Each stage has a “gate” – a thorough management or steering committee review to decide if the project should go further.

Staged approval systems processes can be managed with software packages as offered by companies like Stage-Gate International (www.stage-gate.com), or through simpler charts and spreadsheets. Frequently, the stages mentioned above are divided into several smaller sub-stages, which may include detailed risk analysis, resource analysis, or customer testing; in some cases I’ve seen companies try to manage products through 10-15 stages.

As I mentioned earlier, staged approval systems do help complex organizations manage complex projects. But all too often, the process, not the customer, becomes the master. Everyone works to satisfy the needs of the gatekeepers, and the gatekeepers tend to feel like they’re doing their job if they say no. In many examples I’ve witnessed, they have too much power, and they are too disconnected from customers to make the best gate-keeping decisions. In addition, it’s not hard to see how the extra bureaucracy and layers of approval bog down the process in addition to stifling creativity.

For the users, and especially the gatekeepers of staged approval systems, the old saying “If you have a hammer, everything looks like a nail” may apply. While the gates help to allocate resources and to weed out obviously bad projects, they are often held up to the task of measuring the immeasurable – the customer value, the customer passion , the innovator’s passion – that make breakthrough innovation work. It’s too hard to get a “good” project through all the approvals.

Still, as I said, I do see the need for some process control, to make some order out of chaos and to allocate resources efficiently. But somehow the organization needs to also be able to embrace breakthrough projects, to take chances, to open gates that might not be opened with a hard, numbers-oriented risk analysis – for projects that have breakthrough potential and obvious customer value. On top of that, the gatekeepers need to be at the forefront of customer connectivity, not isolated, internally-focused individuals we usually see in those positions.

When staged approval processes run the show, incrementalism is the likely result. Incremental improvements are relatively easy to measure, and since they build on existing products, the “gates” are usually already partly opened. In fact, staged approval approaches are often applauded for managing incremental innovation; in fact, it’s what they’re best at. But in many instances, they break down altogether and nothing happens at all. Risk-adverse managers rule the day, and innovations are shot down at the business-case stage or earlier. Some may get patents, but it ends there; innovators and R&D departments are happy because they got a patent, but nothing gets to market. If your organization grinds through a lot of resources but has little to show at the end of the day, save for a few incremental improvements (“Paint it blue, call it new”), it’s time to question your staged approval process, if you use one.