H\Y=bbcjUh]cb8]UacbX
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id i]Z hijY^Zh! VcY VgZ ^aajhigViZY Vh [djg ed^cih d[ eZg[dgbVcXZ ^c i]Z >ccdkVi^dc
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(# 6
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Exhibit 1: The Four Points of Performance in the Innovation Diamond –
the four main factors that drive NPD performance results
Product
Innovation &
Technology
Strategy for the
Business
Climate,
culture, teams
& leadership
Based on a major APQC study
into NPD best practices 2
Business’s
new product
performance
Idea-to-Launch
System:
Stage-Gate®
Resources:
Commitment
& Portfolio
Management
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Stage-Gate® is a trademark of
Product Development Institute Inc.
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
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^ccdkVi^dchigViZ\nYZVahl^i]gZhdjgXZVaadXVi^dck^VhigViZ\^XWjX`Zih!VcYbVee^c\
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Exhibit 2: Best performing businesses develop a Product
Innovation & Technology Strategy, which includes these elements
34.6%
38.1%
Clearly defined NPD goals
Worst Performers
51.7%
Average Business
Best Performers
30.8%
Role of NPD in Business
goals
46.3%
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58.6%
Strategic arenas defined –
areas of strategic focus
53.8%
64.8%
69.0%
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23.1%
Long term comm itment
38.1%
58.6%
15.4%
Use strategic buckets
26.9%
41.4%
19.2%
Product roadmap in place
27.6%
37.9%
10%
20%
30%
40%
Reads: only 27.6% of businesses on
average develop a Product Roadmap.
Best performers are about twice as
likely to use roadmaps as poor
performers – 37.9% versus 19.2%.
50%
60%
70%
Percentage of Businesses with Each Strategy Element
80%
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
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Exhibit 3: The ABC’s of defining your business’s Product Innovation Strategy
a. Define Goals for
Your NPD Effort
Define:
• Role of NPD in Business
Strategy & Goals
• Your Goals for NPD
Industry
Analysis
Arenas of
Strategic
Focus
Company
Analysis
b. Select Strategic Arenas –
Areas of Strategic Focus
Attack Plans
• Innovator
• Fast Follower
• Low-Cost
• Differentiator
• Niche
• Defender
c. Attack Strategy &
Entry Strategy
Optim um Entry Strategies
T e c h n o lo g i e s e m b o d i e d i n t h e p r o d u c t s
B ase
Ne w , f a m il ia r
N e w , u n f a m ili a r
V e n tu r e c a p ita l
Ne w ,
Jo int ve n tu r e s
un fa m il i ar
V e n t u re ca p it a l
o r V e n t u re
o r V e n tu r e
N u rt u r in g o r
N ur t ur in g or
E d uc a ti o na l
Ne w ,
f a m i lia r
E d u ca tio n a l
a c qu isit io n s
a cq u is it io n s
In t er n a l m a r ke t
I n te r n a l v e n tu r e s
V e n t u re ca p it a l
d e v e lo p m e n t o r
o r A c q u isi tio n s o r
A c qu i sit io n s (o r
L ice n s in g
o r V e n tu r e
n u r tu r in g o r
Jo i nt V e n tu r es )
E d u c at io n a l;a
a cq u is it io n s
Ba s e
I n te r na l b a se
In te r n a l pr o d u c t
Jo i nt V e nt u r e s
d e ve l op m e nt s
d ev e lo p m e nt o r
( la r g e fi r m w it h
(o r A c qu i sit io n s )
A cq u is itio n s o r
s m a ll f irm )
L ice n s in g
d : Resource Commitment &
Strategic Portfolio Decisions:
R
es o urc e Commitment
C om m itm en tto
toNPD
NPD
Resource
P ro d uc t R oad m a p
S trategic Buckets
Ext en sio n s i nto C he m ica l M i xers
O ri gi n al Ag i tator P l atf o rm - Ex ten si on
Che m i cal M i xer s: B a
s ic L ine
Pl an
e xten si o ns
& ne w
p a
l tf orm s
•• T4HE
h e Str
ateg ic 2OLE
R ol e OF
o f 9OUR
Yo u r
3TRATEGIC
B"USINESS
u sin es s
• S tr ate gy,
G oa ls
a nd
T ask
• 3TRATEGY 'OALS AND 4ASK
A p p ro ach
!PPROACH
• C o m p etitiv e Par ity
• #OMPETITIVE0ARITY
• S p end in g L evel B as ed on
• 3PENDING,EVEL"ASEDON
D e man d fro m A ctive P ro jects
Che m i cal M i xer s: Sp eci al I m p el le sr
C he mi ca l M ixe r s: H i - Po wer
Ex ten si on s i nto Pe trol eu m B le n de rs
Pl a tf orm E xte ns io n
Deployment, Strategic Buckets &
the Strategic Product Roadmap
Pet r ol eu m Ble nd er s : L ow P ow er R ang e
Pet r ol eum B len de r s : H ig h Pow er
N e w P ro du ct P lat f orm: A era tor s
A e rato r Pl atf o rm
P& P Ae r ato r s: Lin e
#1 ( f i xed m o unt )
P & P Aer a t ors : L in e # 2 ( f lo at i ng)
P& P Aer a t or s: H i - Pow er
Ex ten si on s i nto A e rato rs f or C he mi ca l W aste
P la tfo rm
P roj e c t s
P roj e c t s
( ch ang e th e basis of
co mpe tition )
O th er :
$EMANDFROM!CTIVE0ROJECTS
Exte n s
io n
Ch em i cal Aer a to rs : L in e# 1
Pl a t f o rm
N e w P rodu c t
E xten sions, M odifica tions,
Impr ovem ent s, Fixes ,C ost Red uctions
C he mi ca l A er at or s: Li ne # 2
e. Tactical Portfolio
Decisions
Project selection (Go/Kill),
prioritization, & resource allocation
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cdi!i]Zci]Z^ccdkVi^dchigViZ\nh]djaYWZÐgbana^c`ZY
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Exhibit 4: The Product-Market Matrix delineates possible Strategic
Arenas on which to focus your NPD or R&D efforts
Voice
Data
Internet
Wireless
Long
Distance
Small - Home
Office
Medium
Business
Large
Business
Multinationals
Residential
Products
The axes of the diagram are “Products” and “Markets.” Each cell represents a
potential strategic arena.
Arenas are assessed for their potential and the company's business position. Stars
designate top-priority arenas – where new product efforts will be focused.
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
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I]Z Ðghi iVh` ^h dcZ d[ ^YZci^[n^c\ V edhh^WaZ hZi d[ VgZcVhÄVgZVh i]Vi d[[Zg i]Z
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Exhibit 5: The Strategic Map – arenas are plotted on two dimensions
Each circle represents a possible
strategic arena – a possible area
of focus for NPD
10
Arena Attractiveness
9
8
High Risk
Bets
Flotation
Aerators
Good
Bets
Chemical
Aerators
for P&P
Aerators
Waste
Cells
7
Chemical
Mixers
6
Petroleum
Aerators
5
Petroleum
Blenders
4
Agitators
3
2
1
0
High Density
Stock
Hydro-M et
Slurry
Pumps
Pumps
Conservative
Bets
10
8
Home
Base
Chemical
No
Bets
Specialty
Pumps
6
4
Business Strength
2
0
™ 6
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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ide^XcZmi^ci]ZhZXi^dcdcedgi[da^dbVcV\ZbZci#
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Exhibit 6: Strategic Portfolio Management practices in best performing
businesses
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Wjh^cZhh [VXZh h]Vaa ^i [jcY4 6cY l]^X] dcZh h]djaY
3.8%
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21.2%
management system in place
31.0%
gZXZ^kZ ide eg^dg^in VcY WZ VXXZaZgViZY id bVg`Zi4
46.2%
Projects are aligned
57.2%
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with Business’s strategy
65.5%
8.0%
egdYjXi egd_ZXih YZX^YZ idbdggdlÈh egdYjXi"bVg`Zi
Resource breakdown reflects
30.7%
Business’s strategy
65.5%
egdÐaZ d[ i]Z Ðgb# ;^cVaan! ^i ^h VWdji WVaVcXZ/ VWdji
0.0%
Portfolio has excellent balance
19.4%
in project types
i]Zdei^bVa^ckZhibZcib^mWZilZZcg^h`kZghjhgZijgc!
31.0%
12.0%
Sold job of ranking &
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26.6%
prioritizing projects
41.4%
Worst Performers
adc\iZgbcZlegdYjXiegd_ZXih#
Average Business
Portfolio contains high 0.0%
22.8%
value projects
Balance – sufficient resources
for number of projects
0%
Best Performers
37.9%
4.0%
21.5%
37.9%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of Businesses W here Each
Portfolio Management Practice is in Place
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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Exhibit 7: The two levels of decision-making in portfolio management
Business Strategy &
Product Innovation
Strategy
1. Strategic Portfolio
Decisions:
Strategic Buckets &
Strategic Product
Roadmap
S trate gic B uck ets
Pla tform
New Produc t
Pr ojects
Proje cts
( chan ge the ba sis o f
com p etition )
Other :
E xte nsio ns, Mod ifica tion s,
Imp r ovem en ts, Fixe s, Co st Re duc tion s
P ro duc t R oa dm a p
Ex ten si on s i nto C h em c
i al M i xers
O ri g i nal A gi tato r P l at f orm - Ex ten si on
Ch em i cal M i xe r s: B asi c L in e
Pl an
e xte nsi o ns
& ne w
Ch em i cal Mi xe rs : Sp eci al I m pel le r s
RResource
es o urc e C
om m itm en t to
to NPD
N PD
Commitment
• • T4HE
he Str
ateg ic R
o le OF
o f 9OUR
Y ou r
3TRATEGIC
2OLE
B"USINESS
u sine ss
• • Stra
teg y,
G
o als
an d
T ask
3TRATEGY
'OALS
AND
4ASK
A!PPROACH
p pr oac h
• • C#OMPETITIVE0ARITY
o mp etitive Pa rity
• • Sp
en d ing L evel B ased o n
3PENDING,EVEL"ASEDON
D$EMANDFROM!CTIVE0ROJECTS
em an d fr om A c tive Pro jec ts
Resource
Commitment to
NPD
Che m ic a l M i xer s: Hi - Po w e
r
p la tf orm s
E xten si on s i nto P etrol e um B l en de rs
P la tf orm E xt ens io n
Pet r o leu m Bl end er s : L ow P ow e r R an ge
Pet r ol eu m B le nde r s : H ig h Pow e r
Ne w Pro du ct P a
l tf orm : A er ator s
Ae rat or Pl a tfo rm
P& P Ae r at or s: Li ne
#1
f( i xed mo un t )
P& P Ae a
r t or s: L in e # 2 ( f l oat i ng )
P& P Ae r at or s: Hi - Po wer
Ex ten si o ns i nto A e ra o
t rs f or C h emi c al W as e
t
P la tf orm
Exte n si on
Ch em i cal Aer a to r s: L in e #1
Che m i ca l A er at or s: Li ne # 2
2. Tactical
Portfolio
Decisions: Project
Selection (Go/Kill),
Prioritization, &
Resource
Allocation
Portfolio Review:
 Holistic
 All projects in auction
Right priorities?
Right mix?
Alignment?
Sufficiency?
Resource adequacy?

Stage-Gate® Process:
Individual projects
 In-depth evaluation
 Quality data available
 By senior management
 Go/Kill decisions
 Resources allocated

By senior management
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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www.stage-gate.com
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VcY i]jh igVchaVi^c\ higViZ\n [gdb i]Zdgn id gZVa^in ^h VWdji bV`^c\ YZX^h^dch dc
l]ZgZi]ZgZhdjgXZhh]djaYWZheZciÄhigViZ\^XWjX`Zih#>ci]ZZmVbeaZ^c:m]^W^i-!
bVcV\ZbZciWZ\^chl^i]i]ZWjh^cZhhÈhhigViZ\nVcYi]ZcbV`ZhhigViZ\^XX]d^XZh
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Exhibit 8: The Strategic Buckets method split resources into different
envelopes or buckets to ensure resource splits mirror strategic priorities
Project
$2 M
$3 M
Ran
k
Project
Gate
Score
Rank
Savings/
MD
150-C
1
88
Jeanie
1
88
97-D
2
85
Monty
2
85
149-F
3
80
Kool-Flow
3
80
1402
4
77
Pop-Up
4
77
98-DD
5
75
Regatta
5
75
1267
6
70
Slow-Brew
6
70
1230-D
7
69
Widget-4
7
69
Project
Rank
Sales/
MD
New Products
=$2 M
Improvements
& Modifications
= $3 M
Cost
Reductions
= $2 M
Sales
Requests
= $3 M
Project
Rank
Mktg
Score
1542
1
42.3
Walco-43
1
Pop-Redo
2
37.3
Mini-Pkg
2
68
Quick-Fit
3
31.2
Asda Refill
3
65
1498-K
4
25.5
Regen-3
4
61
Flavor-1
5
24.1
Small-Pack
5
55
Xmas Pkg
6
18.0
Tesco-Lite
6
52
Lite-Pkg
7
6.7
M&S-41
7
50
4 portfolios, fire-walled
Rank projects until out of
resources in each bucket
$2 M
79
$3 M
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6ai]dj\]\V^c^c\^cedejaVg^in!ZheZX^Vaan^c]^\]"iZX]cdad\nWjh^cZhhZh!i]ZjhZd[
gdVYbVeh^hVlZV`VgZV\ZcZgVaan!l^i]dcan',#+d[Wjh^cZhhZhYZkZade^c\egdYjXi
gdVYbVehVahdh]dlc^c:m]^W^i'#6Wdjiil^XZVhbVcnWZhieZg[dgbZgh(,#.jhZ
egdYjXigdVYbVehi]VcldghieZg[dgbZgh&.#'#
© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
-
Exhibit 9: The Strategic Product Roadmap lays out the major development
initiatives
Extensions in to Che mical M ixe rs
Major development
projects are mapped out
for the foreseeable future.
Placemarks for these
projects are established &
resources tentatively set
aside or ear-marked.
O rig ina l A g itator Platfo rm - Extension
Ch em ical Mixers: Basic Lin e
Plan
e xtensio ns
& new
p la tfo rm s
Ch em ical Mixers: Sp ecial Im p ellers
C hem ic al M ixers: Hi-P ow er
E xte nsions into Petroleu m Blend ers
P la tform Extension
P etro leum Blend ers : Low P ow er Ra ng e
P et ro leum Ble nd ers : Hig h P ow er
Ne w Platform : A erato rs (fo r P& P I nd ustry)
A era to r P la tfo rm
P &P A erat ors: Lin e # 1 (fixed m ou nt)
P& P A erat ors: Line # 2 (floati ng)
P&P Aerato rs: Hi-Po wer
Platform E xtension: A erato rs fo r Che mi ca l W aste
Pla tfo rm Ex tensio n
Ch em ical Aerators: Lin e # 1
Ch em ical Aerators: Lin e # 2
0
12
24
36
48
60
Months
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
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egd_ZXiineZ0VcYZVX]edgi[da^ddga^hiXVci]jhji^a^oZ^ihdlceg^dg^i^oVi^dcdg<d$@^aa
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Exhibit 10: The Productivity Index – an index used to rank development
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projects
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• Take what you are trying to maximize
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– Example: NPV
• Divide by what the constraining resource is
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– Example: People (expressed as person-days)
<d$@^aaYZX^h^dchbjhiWZbVYZ#
– Or Development funds ($000)
•
And rank your projects by this index until out of resources
•
Example:
Productivity
Index
=
Output
Input
=
NPV
Person-Days
NPV= forecasted NPV of the
project
Person-Days = resources
required to complete the project
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
&%
Exhibit 11: Determination of Expected Commercial Value of a Project
A model of a two-stage investment decision process: First, invest $D in development, which may yield a
technical success with probability Pt . Then invest $C in comm ercialization, which may res ult in a com mercial
success with probability P cs. If successful, the project yields an income stream whose present value is $PV. More
sophisticated versions of this model would entail more stages than the two shown here, and an array of possible
outcomes from each stage.
Commercial
Success
Technical
Success
P ts
Pcs
$PV
Yes
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Technical
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ECV = [(PV * Pcs - C) * Pts ]- D
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$D
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$D
Yes
No
No
Commercial
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
L^cc^c\ViCZlEgdYjXih/EVi]lVnhidEgdÐiVWaZ>ccdkVi^dc
www.stage-gate.com
&&
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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www.stage-gate.com
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Exhibit 12: An Overview of a typical
Stage-Gate® idea-to-launch
system
Stage-Gate®: A 5-stage, 5-gate framework
for significant new product projects
Driving New Products to Market
Idea
Screen
Idea
Stage
Gate
1
Discovery
Stage 1
2nd
Screen
Go to
Dev’mt
Gate
2
Gate
3
Scoping
Stage 2
Business
Case
Go to
Launch
Go to
Test
Gate
4
Stage 3
Development
Stage 4
Testing
Gate
5
Post-Launch
Review
Stage 5
Launch
Stage-Gate® is a trademark of
Product Development Institute Inc.
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Exhibit 13: Key elements of an effective idea-to-launch system
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XdcigVhi!eddgeZg[dgbZghiZcYbjX]bdgZidYZkZade
15.4%
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33.4%
work; identify customers needs/problem s
69.0%
jcY^[[ZgZci^ViZY!kVc^aaVegdYjXihl^i]a^iiaZXdbeZi^i^kZ
38.5%
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44.8%
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homework prior to Developm ent
62.1%
15.4%
Develop products superior to
competitors’ in m eeting custom er needs
34.4%
23.1%
Tough, rigorous Go/Kill decision
points thru-out the process
15.4%
NPD project performance metrics
(e.g. NPV, sales, on-time launch)
Average Business
10%
20%
52.5%
33.3%
30.0%
23.1%
A Process Manager in place
Worst Performers
58.6%
18.7%
Excellent quality-of-execution:
all activities, idea-to-launch
0%
38.8%
30%
51.7%
44.8%
42.5%
40%
50%
51.7%
60%
70%
Percentage of Businesses
that Embrace Each Best Practice
Best Performers
80%
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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www.stage-gate.com
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Exhibit 14: An Overview of NexGen Stage-Gate®
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PLR
2nd Screen
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Stage-Gate® Regular
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for major new product
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developments
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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Exhibit 15: Spiral Development: A series of “build-test-feedback-revise”
Iterations move the project team quickly to a fact-based product definition
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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Exhibit 16: The climate & culture for innovation, and the role of senior
management, are keys to success in NPD
26.9%
Senior management
strongly committed to NPD
79.3%
14.3%
NP metrics are part of senior
management’s annual objectives
34.3%
50.0%
7.7%
Business's climate supports
entrepreneurship & innovation
0.0%
Senior management provides strong
support & em powerment to team s
NPD team rewards or recognition
for projects
Worst Performers
Average Business
37.1%
62.1%
3.8%
Skunk works & unofficial
projects encouraged
Tim e-off for creative work;
Friday projects
50.5%
0%
15.6%
21.4%
13.7%
27.6%
7.7%
40.0%
65.5%
7.7%
30.1%
55.2%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percent of Businesses W ith Each Element of Climate
Best Performers
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© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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Exhibit 17: How best performing businesses organize their teams for NPD
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53.8%
Team is cross-functional: Technical,
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72.1%
Marketing, Sales, Operations
79.3%
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38.6%
Projects undertaken b y cleared
61.6%
identified team of players
79.3%
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Team does project from
48.6%
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beginning to end – no hand-offs
72.4%
50.0%
Identifiable project team leader
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10% 20%
30% 40% 50% 60% 70% 80% 90%
100%
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Percent of Businesses W ith Each Organizational Element
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63.8%
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Leader from beginning to end
Team has central & shared
inform ation system, IT based
Team members accountable for
project’s end results
0%
Worst Performers
Average Business
Best Performers
© 2000-2014 Product Development Institute Inc.
Product Development Institute Inc. and Stage-Gate International are registered trademarks.
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