Carnegie Mellon Qatar © Robert T. Monroe Course Selecting An Opportunity: Stage-Gate Processes, Customer Scenarios, and POGs Robert Monroe Innovative Product Development February 10, 2011

Carnegie Mellon Qatar © Robert T. Monroe Course By The End Of Class Today, You Should: Understand the concept of stages and gates in the Stage- Gate process Understand why organizations use a structured method such as Stage-Gate to direct their innovation investments efficiently and effectively Understand how an organization can use scenarios to illustrate a Product Opportunity Gap, the Job Statements, and the Value Opportunities that underlie the POG proposed for further investigation

Carnegie Mellon Qatar © Robert T. Monroe Course The Good News: Lots of Ideas SETJTBDJob ScopingNine Boxes Lots of Ideas (POGs)

Carnegie Mellon Qatar © Robert T. Monroe Course The Bad News: Limited Resources Organizational Resources NPD Resources Available for Innovative New Product Development

Carnegie Mellon Qatar © Robert T. Monroe Course The Problem Lots of Ideas (POGs) NPD Resources

Carnegie Mellon Qatar © Robert T. Monroe Course Resource Allocation: The Stage-Gate NPD Process In the early stages of developing new market opportunities and bringing innovative services and products to market, one of the most critical tasks is appropriately backing and funding the most promising opportunities, while eliminating non-promising ideas as quickly and as cheaply as you can determine they are not promising, but no quicker. The Stage Gate process [CE09] provides a rigorous, structured way for organizations to do so

Carnegie Mellon Qatar © Robert T. Monroe Course Overview Of The Stage-Gate Process Stages are steps in the New Product Development (NPD) process where a specific set of work activities are done to produce a specific set of deliverables Gates are decision points that come at the end of each stage. Stage nStage n+1 Gate n+1 Gate n+2

Carnegie Mellon Qatar © Robert T. Monroe Course Gates: Go/No-Go Decision Points Gates are key decision points in the process –Always a cross-functional group of gatekeepers –Gates should force a decision to be effective Possible outcomes from a gate meeting: –Go: move ahead to the next stage, commit appropriate resources –No-Go: the project does not meet the criteria required to move forward. Stop the project and reallocate project resources. –Recycle: the project shows promise but has not yet met the criteria for moving to the next stage. Continue work in the current stage, return with additional information. Resources are allocated as needed to get requested information Decision Criteria Deliverables From Previous Stage Decision, Resources Allocated, Outputs Source: [CE09] page 10.

Carnegie Mellon Qatar © Robert T. Monroe Course New Product Development (NPD) Stages Discovery Stage Gate 1 Stage 1: Scoping Gate 2 Stage 2: Biz Case Stage 3: Development Gate 2 Gate 4 Stage 4: Test & Validate Gate 5 Stage 5: Launch Source: [CE09] page 8.

Carnegie Mellon Qatar © Robert T. Monroe Course Mapping Stage Gate to Cagan/Vogel Process Source: [CV02] Chapter 5 and [CE09] Launch * Realize Conceptualize UnderstandIdentify Discovery Stage Scoping Stage 1 Business Case Stage 2 Development Stage 3 Stages 4 & 5

Carnegie Mellon Qatar © Robert T. Monroe Course Managing Risk With Stage-Gate Level of risk and uncertainty Time (Stages) Resources allocated

Carnegie Mellon Qatar © Robert T. Monroe Course Exercise: Gate 1 is where we go from idea generation (discovery) to the scoping (starting to really understand the customer) What criteria should we use for exiting gate 1? Who should your gatekeepers be for this gate?

Carnegie Mellon Qatar © Robert T. Monroe Course Question: Who should your gatekeepers be for later gates? How should you go about selecting the proper people to participate in the gate meetings?

Carnegie Mellon Qatar © Robert T. Monroe Course Scenarios – Making Your POG Resonate POGs, on their own, can be very abstract and dull By illustrating your POG with scenarios, which describe a real person, in a real situation, dealing with the real problems or challenges you have identified, you can bring the idea you have to life for your audience, and convince them that this is an idea worth pursuing Scenarios are short (1-2 paragraphs) descriptions of a person or people in a specific situation. A scenario should illustrate who your target customer is, what their need is, why they have that need, how the task is currently accomplished, and when it happens. Source: [CV02] pp

Carnegie Mellon Qatar © Robert T. Monroe Course Scenario Example: Ron The Construction Contractor “Ron is an independent contractor. He typically works alone or with a crew of one or two. When Ron arrives at the work site in the morning, he drops off his larger equipment as close to the work area as possible. Setting up a work area typically means carrying sawhorses and boards as well as large ladders and tools. Most of the equipment is heavy and many trips to a destination far from the truck can be time- and energy- intensive. If Ron can work near his truck, he often uses the tailgate as a cutting or work surface, even for eating lunch. Ron’s truck has side-mounted toolboxes that he installed and both a ladder rack and a towing hitch that were installed professionally. This means that Ron has no free space within his truck bed and that his tools often have to be put on the ground during unloading, which is damaging to both the tools and Ron’s back.” Source: [CV02] pp

Carnegie Mellon Qatar © Robert T. Monroe Course Gate 1: Exiting Discovery Stage Deliverables –Statement describing the Product Opportunity Gap –Scenario description of one or two paragraphs that illustrates and brings to life the who, what, why, how, and when for the identified POG Criteria:

Carnegie Mellon Qatar © Robert T. Monroe Course Outputs Of Discovery Stage Required: –Statement describing the Product Opportunity Gap –Scenario description of one or two paragraphs that illustrates and brings to life the who, what, why, how, and when for the identified POG Optional (but useful as resources for later stages): –Job statement(s) for the Job(s) To Be Done we are targeting –Description of identified SET factors that lead to the conclusion this is a promising opportunity –Job scoping worksheets and conclusions –Nine boxes exercise output

Carnegie Mellon Qatar © Robert T. Monroe Course References [CE09] Robert G. Cooper and Scott Edgett, Successful Product Innovation, Product Development Institute, 2009, ISBN: [SSD09] David Silverstein, Philip Samuel, Neil DeCarlo, The Innovator’s Toolkit, John Wiley and Sons, 2009, ISBN: