WINNING at NEW PRODUCTS

Creating Value through Innovation

FOURTH EDITION

Robert G.Cooper

BASIC BOOKS
A MEMBER OF THE PERSEUS BOOKS GROUP New York

CONTENTS

Preface xiii

CHAPTER 1 THE INNOVATION CHALLENGE 1

The Challenge: How to Really Innovate 1 The Solution 4 The Four Innovation Vectorsthe Innovation Diamond 6 New Products: The Key to Corporate Prosperity 9 Huge Amounts at Stake 14 Why So Much Innovation Today? 15 High Odds of Failure 17 Defining Newness and a "New Product" 20 The Path Forward 23

CHAPTER 2 WHY NEW PRODUCTS WIN 26

The Invisible Success Factors 26 Why New Products Fail to Yield the Profits They Should 27 Seven Critical Success Drivers 31 Building the Success Drivers into Your Playbook 55

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Contents

CHAPTER 3 DRIVERS OF SUCCESSWHY THE BEST INNOVATORS EXCEL 56

Seven Critical Success Drivers for the Business 56 Toward a Stage-Gate New-Product System 81

CHAPTER 4 THE STAGE-GATE* IDEA-TO-LAUNCH SYSTEM 83

What Is Stage-Gate? 83 Seven Goals of a New-Product Idea-to-Launch System 86 How to Manage Risk 94 A Best-Practice New-Product System 98 An Overview of the Stage-Gate System 102 Debunking the Myths About Stage-GateWhat Stage-Gate Is Not! 112 Built-in Success Drivers 116

CHAPTER 5 NEXT-GENERATION STAGE-GATE HOW COMPANIES HAVE EVOLVED AND ACCELERATED THE SYSTEM 120
Global Inputs to Reinvent Stage-Gate 120 Scaled to Suit Different Risk Levels and Types of Projects 121 An Adaptable, Flexible, and Agile Process 127 Efficient, Lean, and No Waste 133 Metrics, Team Accountability, and Continuous Improvement 138 Stage-Gate for "Open Innovation" 142 Life Cycle Management and Stage-Gate 146 Automated Stage-Gate Systems 150 Common Errors in Designing a Next-Generation Stage-Gate System 152 Making It Work 154

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CHAPTER 6 DISCOVERYTHE QUEST FOR BREAKTHROUGH IDEAS 156

A Shortage of Blockbuster New-Product Ideas 156 Where to Start? A Product Innovation and Technology Strategy 158 Set Up an Idea Capture and Handling System 159 The Sources of the Best Ideas 160 Voice-of-Customer Methods 161 Strategic Methods for Generating Ideas 172 Open Innovation as a Major Source of Ideas 181 Technology Development and Fundamental ResearchChanging the Basis of Competition 186 Patent Mapping 187 Getting Great Ideas from Your Own Employees 187

CHAPTER 7 THE FRONT-END WORKFROM DISCOVERY TO DEVELOPMENT 192

The First Few Plays of the Game 192 On to Stage 1: Scoping 193 On to Stage 2: Build the Business Case 200 Undertake VoC Research: A User Needs-and-Wants Study 205 Do a Competitive Analysis 212 Revisit the Market AnalysisThis Time in More Depth 215 Time for a Detailed Technical Investigation 215 Test the Concept with the CustomerStart the Spirals 217 Build In the Spirals 225 Business and Financial Analysis 226 Action Plans 228 On to Stage 3: Development 228

Contents

CHAPTER 8 PICKING THE WINNERSINVESTING IN THE RIGHT PROJECTS 229

It's Tough to Make the Right Investment Decisions 229 Project Selection Is But One Component of Portfolio Management 232 The Tools to Use for Effective Gates and Portfolio Reviews 235 Maximizing the Value of Your Portfolio 235 Strategic Portfolio Management 250 Integrating the Governance Elements: Gating, Portfolio Reviews, and Road Maps 261 Data Integrity 262 Popularity and Effectiveness of Portfolio Methods 264 Recommendations for Portfolio Management 266

CHAPTER 9 MAKING THE GATES WORKGATES WITH TEETH 268

Challenges at the Gates 268 Gates with TeethLearn to Drown Some Puppies 272 How Effective Gates Work 279 Tips and Hints in Gate Governance 286 Who Are the Gatekeepers? 289 How to Run Gates 291 Ways to Accelerate the Gates 296 Make the Gates Work! 297

CHAPTER 10 DEVELOPMENT, TESTING, AND LAUNCH 298

Parallel Actions During Stage 3: Development 298 Seek Customer Input Throughout the Development Stage 301 Shortening Development Times 304 On to Stage 4: Testing and Validation 308

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Go for Launch 316 The Final PlayStage 5: Into the Market 316

CHAPTER 11 IMPLEMENTING STAGE-GATE9 IN YOUR BUSINESS 330

Lets Go Do It 330 Designing and Implementing Stage-Gate 330 Stage 1: Laying the Foundation, an Innovation Performance Assessment 331 Stage 2: Designing (or Redesigning) Your Stage-Gate System 336 Stage 3: Implementing Stage-GateChange Management 340 Sustaining the Implementation EffortMaking It Stick 352 Ten Ways to Fail! 354 Moving Forward 355

Appendix A: The Benchmarker Audit Tool 357 Appendix B: The Navigator Stage-Gate System 359 Notes 361 Index 375