Beyond “Stage-Gate:” Faster and More Profitable New Business Development ECMRA New Contenders, New Approaches Greg Stevens, President, WinOvations , Inc. October 9-11, 2000 London SM WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 1 Outline A. State of the Art: “Stage-Gate” Processes B. Killer Myths Inhibiting the Fuzzy Front End (F.F.E.) of New Business Development (NBD) C. Debunking Myths & Achieving Six Sigma Improvements in New Business Development D. In Speed & Profitability Specific Applications WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 2 A. Stage-Gate® Systems Are “State of the Art” for New Business Development Today’s NBD Processes First Published Broadly in 1957-58* SC Johnson, Booz-Allen Little New Today Widely Adopted in Last 20 Years By 60% of Firms Per PDMA “Best Practices” Study “Stage Gate ®”: Trademark of Robert G. Cooper *Booz-Allen & Hamilton Inc., Jones, Ralph W. 1958. Management of new products. The Journal of Industrial Engineering. IX (5). October. 429-435. *Johnson, S. C. and Conrad Jones. 1957. How to organize for new products. Harvard Business Review. # 57305. May-June. 49-62. WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 3 B. Several Myths Inhibiting New Business Development (NBD) Today Many Grains of Truth In Current NBD Paradigm And Much Confusion “Get the Assumptions Wrong, and Everything that Flows from Them Is Wrong.” Peter F. Drucker, “Management’s New Paradigms” Forbes, Oct. 5, 1998, pp. 152177 WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 4 Problem: “NBD” (& Other) Experts Are Often Wrong WSJ Survey of Expert Economists Forecasting 30-Year Treasury Interest Rates (WSJ: 1/4/99): Got the Direction of the Changes Right Only 28% of the time 9 of 32 Forecasts: 1982-1999 When Experts Said Rates Would Rise, 72% of the Time They Fell 30 Technology Companies Highly Recommended in 1968 Lost an Average of 98.3% Value in 3 Years* Same Happening Today for “Dot Com’s:” Bankrupt: Boo.com; SurfBuzz.com; Red Rocket; Epidemic Marketing.com WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Devoe, Raymond F., The Devoe Report, “More Bugs on the Windshield of Financial Life (Past Visits To the Elephant’s Graveyard), Vol. 21, #2, Jan 15, 1999. 5 Myth #1: Stage-Gate Processes Work (Better than Nothing)! Reality: No Correlation Between Companies with Stage-Gate or other NPD Processes and Commercial Success* Per Latest IRI/CIMS R&D Database Study: *Research•Technology Management, Roger L. Whiteley, Alden S. Bean and M. Jean Russo. July-August, 1998, 15-16. & Even Per R.G. Cooper’s Own Research** Stage-Gate®: Trademark of Robert G. Cooper • **J. Prod. Innov. Manag. 1999; 16: 115-133 WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 6 Doing Activities Well in the F.F.E. of NBD Correlates with Success, But Having a Stage-Gate Process Does Not Stage-Gate Process “Success Factor Studies” Are Like Saying: If You Score a Lot of Points, This Correlates with Winning. But Installing a Stage-Gate System Does Not Ensure that the F.F.E.-NBD Activities Are Done Any Better than Before: Most of the Stage-Gate Activities Were Already Being Done Before, Just Less Formally Even After Installation, Most Firms Do Not Rigorously Use the Process (So In Reality there Is Little Change) & The People Doing & Managing the Activities Are All the Same Yet the Players Make an Enormous Difference, both in Sports and NBD Little Change Brings Little Benefit WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 7 Reality: Stage-Gate Processes Little Changed Since 1950’s in Either Processes or Results Reality: No Measurable Improvements in 40 Years! In Spite of All the “Changes” & “Best Thinking” Indicating Few Substantive Changes & Same Globally: Americas, Europe, Asia 60% Success from Launch* Same Globally: Americas, Europe, Asia Per Robert Cooper (3/99 JPIM), & Many Other Studies 11% Success from Early Development Stage One in Nine Success Rates WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Cooper et al, J. Prod. Innov. Manag. 1999; 16: 115-133 8 Like the Fable of The Emperor’s Clothes No Better Off With, or Without Them Also Like Medicine in the 1800’s: When Patients Staying Home Got Well Just as Often as Those Visiting a Doctor And Witch Doctors “If a Factory Produced Such Low Quality, it Would be Shut Down.” Cooper et al, J. Prod. Innov. Manag. 1999; 16: 115-133 WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 9 “Insanity Is Doing the Same Thing Over and Over and Expecting Different Results.” Benjamin Franklin (40 Years with No Improvement Would Probably Qualify for the “Over and Over” Part) WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 10 Myth #2: “Most NBD Efforts Do Succeed!” Title of Article, by Robert G. Cooper* Reality: Most NBD Efforts Fail 89% Fail from Early Development Stage Many Examples Iridium Satellite Phones • • Poor F.F.E. NBD Activity Now Bankrupt F.F.E. of NBD Is the Most Difficult of All Business Activities** WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *R.G. Cooper et al, Research Management, Vol. 26: 20-25, Nov.Dec. 1983 **G. Stevens et al, “Creativity + Business Discipline = Higher Profits Faster from NPD,” J. Prod. Innov. Management, Vol 16: 455-468, 9/99 11 Universal Industrial Success Curve Shows Most NBD Efforts Unsuccessful* 10,000 Number of Ideas 3000 Raw Ideas (Unwritten) 60% Success Rate from Launch Unchanged in 40 Yrs. In Spite of All the “Improvements” 1000 300 Ideas Submitted 100 125 Small Projects * ** 9 Early Stage Devel. 10 4 Major Devel. 1.7 Launches 1 Success 1 1 2 3 4 5 6 Stage of NBD Process 7 *Reference: G. Stevens and J. Burley, “3000 Raw Ideas = 1 Commercial Success!” Research•Technology Management, 40(3): 16-27, May-June, 1997. Runner-Up, IRI “Best Paper of the Year.” WinOvations, Inc. Copyright 2000 ** Hultink, Erikgstevens@winovations.com Jan; Susan Hart, Henry S.J. Robben and Abbie Griffin. Launching new products in consumer and industrial markets: a multi-country empirical international 12 comparison. Product Development and1-530-831-5650 Management Association Research Conference Proceedings, October, 1997, 93-126 Tel: 1-517-832-0075, FAX Myth #3: Failures Are Good! Myth: “If You Are Not Failing Enough, You Aren’t Trying Hard Enough” Like Saying “Bad Quality is Good!” Reality: “There Is a Quality Crisis in Product Innovation” R.G. Cooper: *J. Prod. Innov. Manag. 1999; 16: 115-133 Because Most New Business Efforts Do Fail Today, We Desperately Search for Excuses! What We Really Need: More Successful Systems; Higher Quality Results, & Profits WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 13 Profiting From Failures Can Happen (the Grain of Truth), But Mostly Failures Are Routine & Devastatingly Wasteful Average Life of Fortune 500 Co’s is 40 Years One Major Chemical Co.: ‘82-’92: Spent $13 Billion “With No Contribution to Bottom Line” per CEO ‘60’s-’70’s: Spent $16 Billion on R&D, “Technological Black Hole” per Wall St. Journal While Doing “Everything Right” per Today’s Standard Practices Frightening Massive Layoffs: Over 30% WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 14 Myth #4: NBD Processes Work Linearly Mythic Linear View of Traditional “Stage-Gate®” NBD Processes: 1 2 Idea 3 4 5 6 >> Stages >> 7 Launch Myth #5: “Our Stage-Gate Is Unique” Reality: 5-7 Stages in Most Stage-Gate Processes Reality: Most Companies Just Reinventing Cooper’s (or 1958 S.C. Johnson) Linear “Stage Gate” Models, & Spending Millions Doing It. WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Trade Name of R.G. Cooper & Associates 15 Reality: NBD Is Non-Linear in Early Stages. Requires Leaps of Creativity, “Morphing,” To Identify Winners 1 2 3 4 2 3 4 2 3 4 Non-Linear F.F.E. 5 6 7 Linear Stages & Gates Still Exist but Real View of NBD Process Is Non-Linear, Especially in Fuzzy Front End (F.F.E.) WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 16 Myth #6: Everyone Is Creative! Or Can Be Taught to Be Creative Fa La! Therefore Everyone Can Create New Products in the “Fuzzy Front End” of NBD Just Read the Manual, Follow the Steps WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 17 Myth #6 Restated: “The Environment (Nurture) Largely Determines Personality” 67% of Americans Believe Can Readily Change Personalities* Popular belief, & “Politically Correct” Standard Psychology Texts of 1970’s & ’80’s: Taught Individual Personality Was Determined Largely by Environment, or Nurture: Said: “If Identical Twins Raised Apart Could Be Studied, Their Personalities Would Be “Enormously Different**’’ WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Roper Reports, 1993, 93-8 (November), Roper Starch Worldwide Inc., NY, NY **Introduction to Personality, Walter Mischel, Holt Reinhart and Winston, 1976, 2rd Ed., p. 290-291 18 Reality: ~80% of Core Unchanging Adult Personality & Creativity Determined by Genetics Stable Core Adult PersoNality Overall Personality WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 19 Data for New Genetic Paradigm of Creativity: 2 Key Experiments Addressing Effects of Nature and Nurture on Personality: 1. Study of Personality of Identical Twins Raised Apart Same Genetics, Different Environments Separated at 3 Months Key Review Article: 1990 Science:* 2. Study of Adoptees Different Genetics, Similar Environments The “Reverse Experiment” of Twins Raised Apart WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Thomas J. Bouchard, Jr., David T. Lykken, Matthew McGue, Nancy L. Segal, Auke Tellegen.. Sources of Human Psychological Differences: The Minnesota Study of Twins Reared Apart. Science. 1990. 12 October. 250. 223-228. 20 Reality: Identical Twins, Raised Apart Have Very Similar Personalities WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 21 Reality: Identical Twins Raised Apart Are As Alike As Those Raised Together WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 Both Fire Chiefs Both Bachelors Both Flirts Both Raucous “We kept making the same remarks at the same time, and using the same gestures. It was spooky.” Suggests Zero Contribution from Childhood Environment 22 EEG Brainwaves of Identical Twins Raised Apart Show 95% Correlations * Similarity Due to Genetics, As Share No Common Nurture After Separation Identical Twins Raised Apart Non-Identical Twins Raised Together 95% Correlation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *“How Individual Are Human Brainwave Patterns?” by H.H. Stassen, Psychiatric University Hospital Research Department, Zurich, Switzerland, 1992 p. 75 & 83. 23 Correlations Between Any Environmental Factors During Upbringing, and Adult Personalities Are Totally Lacking: Zero True For Adopted Identical Twins Raised Apart & For Adoptees in Same Household Environment “Reverse Experiment” of Identical Twins Raised Apart: No Genetic Similarity, But Same Environment During Childhood. WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Thomas J. Bouchard, Jr., David T. Lykken, Matthew McGue, Nancy L. Segal, Auke Tellegen.. Sources of Human Psychological Differences: The Minnesota Study of Twins Reared Apart. Science. 1990. 12 October. 250. 223-228. 24 New Data Is Remarkably Consistent Supporting Strong Genetic Basis for Personality & Creativity WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 25 Re-emerging “New” Paradigm: “Genetics Is the Most Powerful Determinant of Most Psychological Traits*” “New” Since Plato, Christ, Buddha, Schumpeter, Maslow... “This Sudden Switch...From a Belief in Nurture, in the Form of Social Conditioning, to Nature, in the Form of Genetics and Brain Physiology Is the Great Intellectual Event ... of the Late 20th Century.” “The Fix Is in! We’re All Hard Wired.” Tom Wolfe, Author, Forbes ASAP, December 2, 1996, p. 218 WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 *Bouchard, Jr. Thomas J., “Twins and Type,”Presentation at the Association for Psychological Type, 10th Biennial International Conference, July 6-11, 1993, Long Beach, CA 26 Myth #7: That Personality & Creativity Can Be Lastingly Taught Reality: It Is More Productive to Teach Business Discipline to Creative Types Than to “Teach” Creativity (Largely Genetic) WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 27 So: Is Everyone Creative? Reality: Only In the Sense that Everyone Is Tall We Are All “Tall...” And Can All Be Taught to Jump a Little Higher... But... Only a Few Can Play in the World-Class NBA WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 Willy & Wilt: Differently Gifted 28 C. Achieving Six Sigma Improvements in Speed & Profitability By Incorporating Latest Thinking into the F.F.E. of NBD WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 29 Could Personality Traits of Individual Analysts Involved in the Early Stages 1-4, or “Fuzzy Front End (F.F.E.) of NBD Affect Profits When Later Commercialized? WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 30 Population Studied by WinOvations : SM From Dow Chemical 69 F.F.E.-NBD Analysts & Projects Profiled >95% of Analysts & Projects Measured 267 In a Fortune 500 Chemical Co. Staged Projects Spanning 10 Years 1984-1994: Gave Time to Measure Profits Europe and North America In Effect a 10 Year, $20 Million Experiment WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 31 Consistent Process Used by All F.F.E.-NBD Analysts Evaluated Evolved from Planned Innovation Opportunity Analysis Bacon & Butler, 1982 Testing Critical NBD Hypotheses, or “Draft Propositions:” Need Value Opening Advantage Fit Rigorous Training & Coaching Through 1-2 Projects Staged Analyses, Periodic Management Review “Gates” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 32 “Fuzzy Front End” (F.F.E.) of NBD Process: End of Individual’s F.F.E. Analysis Profits WHAT IS THE VALUE OF MEETING UNMET NEEDS? Winning Actions Unspoken Needs New Ideas Winning Tactics WHAT ARE THE SYSTEM COSTS?` `` Gap-Analysis Ideas Prioritized Draft Propositions Idea Management Gut-Level-Screen Gut-Level-Screen Stages: Ideation WHAT ARE THE SPOKEN UNMET NEEDS? 2. SuccessWheel Shaping WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 HOW IS THE FUNCTION DONE? Analysis Validation Individual Analyst Predominates Develop & Implement Teams Predominate 33 Personality of Analysts in the F.F.E. of NBD Was Measured Using MBTI Instrument & Correlated with Profits ® Two MBTI Personality Measurements Correlated With NBD Profits Earned After Project Was Later Developed & Commercialized by the Business: “N” for Intuition (Vs. “S” for Sensory) “T” for Thinking (Vs. “F” for Feeling) No Benefit from Including Other Two Personality Measurements: • • E/I (Extroversion – Introversion), or J/P (Judging – Perceiving) WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 34 Result: Rainmaker-Index * SM (Based on MBTI ) ® Mean Rainmaker-Index Scores of F.F.E.-NBD Analyst Groups 102 Max -78 Min. Bottom 1/3 (23 Analysts) Middle 1/3 (23 Analysts) Top 1/3 (23 Analysts) = -14.7 = 27.8 = 70.4 An 85 Point Increase in the Rainmaker-Index Correlates with $8.7 Million Additional Profits Earned Per Analyst* Corresponds to the Difference Between the Mean Scores of the Top Third and Bottom Third of the Rainmaker-Index Rainmaker-Index Also Correlates with MBTI Creativity Index: Rainmakers are Highly Creative* *See References: #2 & #6 by WinOvations, At End of Presentation. Selected as “Outstanding Research Paper” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 from October, 1997 PDMA Research Conference Rainmaker-Index: Service Mark, WinOvations, Inc. 35 RainmakerSM Index: Correlates Strongly With Later NBD Profits (Even Better Than MBTI®-CI) Profit per Analyst, $ Millions Personality Index Bottom Third Middle Third N = 23 Analysts N = 23 Analysts Rainmaker Index $0.09 MBTI-CI Index $0.65 $0.93 Top Third N = 23 Analysts $8.23 Times More Effective, Top Vs. Bottom Third 95 X Rainmakers! WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 $1.37 $7.37 11 X 36 All Personality Types Needed in Business Development “Rainmakers” (With Business Discipline) Needed Many Other Types Also Needed Having Business Discipline Training & Coaching Starters: For the “Fuzzy Front End” of New Business Development Finishers: For Later Stages of New Business Development and Implementation In Fact: Need More of Other Types than Rainmakers Because Later Development Stages Take Far More Effort WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 37 Analysts’ Recommendations After Detailed Analyses Stage Consistently Profitable When Later Developed & Commercialized 97% of Positive Recommendations from F.F.E. of NBD Process Later Commercialized Were Profitable Vs. 11% Typically from Stage 4 of 7 Stages on Success Curve More Than a Six Standard Deviation Improvement Vs. Benchmark “Universal Success Curve” for NBD WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 38 Getting the Right Answer Consistently Provides Profits/Unit Effort Nine Times Faster Vs. Benchmark $$ Profits 97% of Time, >Six Sigma Improvement 1 Effort with Best Practices 1 2 3 4 5 6 7 8 9 Profits 11% of Time 9 Efforts Needed with Typical NBD Systems Negative, Discouraging Outcomes: Helps Explain Why Typical Staged-Gate Systems Are Underutilized WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 39 Pick the One in 10 that Wins? Done That More Exciting: Achieve Success With Almost All Early-Stage NBD Projects By “Morphing” Them Done That Too WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 40 The New NBD System Provides More Than a Six-Sigma Improvement Vs. The “Universal” NBD Success Curve 10,000 95% Success Rates From Stage 4 Are Achieved vs. the Benchmark for Traditional StageGate Processes of 11% (1 in 9). This Represents More than a Six Sigma Improvement. Number of Ideas 3000 Raw Ideas (Unwritten) 1,000 300 Ideas Submitted 100 125 Small Projects Benchmark 9 Early Stage Developments From Here 4 Major Developments 1.7 Launches 6s 10 WinOvations 1 Success 1 1 2 3 4 5 6 7 To Here Stage of NBD Process WinOvations, Inc. Copyright 2000 Ref: Stevens & Burley, May-June 1997, gstevens@winovations.com Ref: Stevens & Burley, May-June Research•Technology Management Tel: 1-517-832-0075, FAX 1-530-831-5650 1997, Research•Technology Management 41 Dramatically Increases the Probability of Success by Selecting Inherently Creative People When Needed As in Fuzzy Front End of New Business Development (F.F.E. of NBD) Creativity Needed Because Starting Ideas Are Rarely Commercial, & Must Be Morphed Key: Train & Coach Creative Types in Business Discipline – Described Next “Leash Your Creativity ” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 SM 42 Process Step 1: Determine Top Management’s Gut-Level-Screen SM Manager 1 Manager 3 Manager 2 “Group” Zone of Agreement & Excitement Their Gut-Level-Screen WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 43 Step 2: Prioritize Platforms, Groups & Projects Vs. Gut-Level-Screen Platform A Use Success-Wheel on These Projects First, & Leverage Findings Across Entire Group Platform B Platform C Group 1 Group 2 Group 3 Project 1 Project 1 Project 1 Project 2 Project 2 Project 2 Project 3 Project 3 Project 3 Project 4 Project 4 Project 4 Project 5 Project 5 Project 5 Project 6 Project 6 Project 6 Project 7 Project 7 Project 7 to to to Project “n” Project “n” Project “n” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 Functional Groupings Specific New Product Level Ideas 44 Steps 3-4: Success-Wheel Project Analysis Forms and Tests Draft Propositions That Must be Proved A. Internally Tested Propositions: Fit Vs. Gut-Level-Screen & Sustainable Competitive Advantage B. Marketplace Tested Propositions Customer Visits: How Done, Spoken Needs, Costs, Value C. Iterative-Propositions : SM Unspoken Needs, New Ideas, Winning Way in World When Know How to Win, It’s Time for Commercial Development WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 45 Final F.F.E.-NBD Analysis Step: Cost Per Unit Performance In The Customer’s Eyes Is Key ($/Part, or $/Ft. Bonded: Not $/Lb. Sold) $30.00 Wins! $25.00 $ Per Unit Performance In This Example, the Highest Cost Per Pound Raw Material Still Wins Vs. The Best Global Competitors Vs. Today’s Processes... And More Importantly Tomorrow’s Then Go!! Activate Teams, Develop & Commercialize $ Per Unit Performance $20.00 Overhead w/ G&A Capital $15.00 Plant Labor Raw Materials $10.00 $5.00 $0.00 1 2 3 4 5 Best Global Approaches Best Global Approaches WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 46 D. Applications of New System at Honeywell (AlliedSignal): The new approach “combines creativity with a high degree of business discipline. … we ended up with winning business plans that fully identified over $100 million per year in new sales potential.… with the likelihood of developing into several hundred million dollars per year businesses.” “As a result of their work…we know the costs of the best competitors in the world, and how to beat them, by better meeting customers’ spoken and unspoken needs.” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 47 Application of New Approach at Dow Chemical, in (Insite®) Metallocene Polymer Catalysis: Helps Identify “Starters” and “Finishers” Key Personnel Issue Has Resulted In Over 3 Billion Pounds of New Polymer Capacity, Much in New Areas & Projected in 1991, and Now Come True It’s Just the Beginning WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 48 Myth #8: “We’re Already Doing Something Pretty Much Like This” With Due Respect, Saying the Traditional Staged-Gate Approach and the New Approach Are Alike… “Is Like Saying Veterinarians And Taxidermists Are In the Same Business, Because Either Way You Get Your Dog Back.” WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 Sen. Joe Lieberman, Wall St. Journal, 8/22/00, p.1. 49 Reality: Most NBD Systems Need Dramatic Improvement You Know Your NBD System Is Really Working IF: 95% of NBD Efforts Succeed After Early Development Your Company Greatly Exceeds Your Industry In: Vs. 11% Per Universal Success Curve Corporate Growth Rates, Profitability & Consistency Stock Appreciation & Book Value You & Most of Your Co-Workers Are Heavily Invested In Your Company. New Employees Want to Work There, With Options Economist, Forbes, Fortune, or BW: Picks Your Company as a Gem in that Industry WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 50 Six Sigma Improvements in Speed and Profitability Have Been Achieved in EarlyStage NBD Systems via Breakthroughs In 1. Personnel, 2. Process & 3. Coaching “A Well Directed Imagination is the Source of New Approaches and New Contenders.” Chinese Proverb WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 51 Key Reference Articles 1. 2. 3. 4. 5. 6. 7. 8. Stevens, Greg A. “Shattering Myths and Achieving Higher Profits Faster from Six Sigma Improvements in New Business Development.” Technology Transfer and Innovation ’99 Conference, September 29, 1999, Melbourne, Australia. Also at the Project Management Institute (PMI) 9-00, Houston, TX. Stevens, Greg, James Burley, and Richard Divine. “Profits and Personalities: Relationships Between Profits from New Product Development and Analyst’s Personalities.” Product Development and Management Association (PDMA) 1998 Research Conference, October 5-7, Atlanta, GA. pps. 157-175. Stevens, Greg. A. and James Burley, “3,000 Raw Ideas = 1 Commercial Success.” Research · Technology Management 40(3), 16-27 (May-Jun, 1997). “Innovation in Industry Survey.” The Economist. Feb. 20, 1999. p. 15. [Shows the Universal Success Curve for New Business Development from Ref. #3.] Bacon, Jr., Frank R. and Thomas W. Butler, Jr. Achieving Planned Innovation®, A Proven System for Creating Successful New Products and Services. The Free Press/Simon & Schuster, 1998. Stevens, Greg, James Burley, and Richard Divine. “Creativity + Business Discipline = Higher Profits Faster from New Product Development.” Journal of Product Innovation Management, 16: 455-468. 1999. [& Selected as “Outstanding Research Paper” from October, 1997 PDMA Research Conference.] Stevens, Tim. “The Nature of Creativity.” Industry Week, Viewpoint Archive. IndustryWeek.com. June 29, 1999. pps. 1-4. Others Are Listed Within the Body of the Presentation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 52 Contact, & Additional Background Information Greg Stevens, President WinOvations , Inc. 240 W. Main St., Suite 1200 Midland, MI 48640 USA Tel: 1-517-832-0075 FAX: 1-530-831-5650 email: gstevens@winovations.com www.winovations.com SM WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 53 WinOvations Projects Done In: Americas, Japan, Australia, Western Europe, Eastern Europe, Russia, Middle East SM Clients Since 1995 Include: l l l l l l l l l Baker Oil Tools Destec Energy Dow Chemical Co. Dow Corning Essex Specialty Products GM Honeywell (AlliedSignal) Huber Irwin Seating l l l l l l l l l Johnson & Johnson 3M NCR Owens Corning Reilly Industries Solutia Velsicol Wacker Chemical Others Results Published Internationally: Associations: IRI, PDMA, PMI, ACA, ASC, TTI, SIRF, CDMA, CMRA Journals: The Economist, Industry Week, The Journal of Product Innovation Management, ResearchlTechnology Management WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 54 Project & Training References from Large, Medium & Small Businesses WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 55 Honeywell (AlliedSignal) Project Recommendation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 56 Honeywell (AlliedSignal) Training Recommendation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 57 Essex Specialty Products, Subsidiary of Dow Chemical Project Recommendation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 58 Oliver Products P Training Recommendation WinOvations, Inc. Copyright 2000 gstevens@winovations.com Tel: 1-517-832-0075, FAX 1-530-831-5650 59