innovation process implementation

This document may contain information which is confidential and can not be reproduced --- Guy Laliberté, 2010

Guy Laliberté, February 2010

Innovation Process Implementation in High-Tech CompaniesOverview Session

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Implementing an Innovation Process


■ Innovation in High Technology Companies■ Many companies focus on Product development and not product innovation

■ They put money in developing products before knowin g if the product can become “ an innovation ” and be launched with success on the market.

■ Many companies spend money on the development and f orget the market■ They spend a lot of money on designing the technolo gy and forget about launching it.

Resources must be allocated to all aspect of a prod uct and not only the technology.

■ Product Development and Management Association (PDM A)■ In 2007 : 60 % of firms surveyed in the US are now using some form (partial

or extended) of a Stage-Gate Process for their prod uct innovation. A direct link has been observed between companies performing well and how far the Stage-Gate process has been implemented.

■ Innovation must become part of the culture of compa nies to target growth■ Product Innovation ≠ Technology Development■ Rapidly evolving markets require a structured produ ct innovation approach

Introduction

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■ Culture of Innovation■ To be resilient and target growth, a high-tech company must “deeply integrate”

innovation in its culture.

■ A culture of innovation must be present at all levels of the company.

■ Innovation “as a mean of reaching company objectives” must be understood and part of the strategic and operational plan of the company.

■ Innovation is more then “new technology = new product”. A product is more then only technology (technology + commercial spin + price)

■ Innovation can be only “internal” and still impact results on the market (i.e. : implementing new processes or equipment to reduce cost and thus price of a product on the market)

■ Key Factors■ First step is to work on “integrating” innovation in the culture of a company. From the

executive to the middle management, all must obliged by it. ■ Key to innovation is the collaboration between marketing and engineering.

■ An invention badly launched on the market will never become an innovation.■ You can have the best technology but without the adequate means to target the right

markets, you will not succeed.

■ Understanding the life cycle of a product is key in taking decisions for success.

■ More and more innovations are “completed with external means” such as partnership and use of third party technologies.

Innovation in High-Tech Companies

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Stage-Gating Model �� A structured innovation approach

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1

3 4 5

Discovery

Scoping Business Case

Development Test & Validation

Launching

Post Launch Review

2 Gate : A decision point in the product innovation p rocess

Stage : An activity of the product innovation proce ss.

Go toBusiness Case

Go to Development

Go to Test & Validation

Go to Launch

Initial Idea Screening

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■ The Stage-Gating process is:■ a way to formalize and structure the innovation pro cess within a company;

■ a way to reduce financial risk for the companies

■ a way to increase chances of success with the new p roduct

■ a way to have the buy-in of all stakeholders within a company

Stage-Gating Model

2

1

3 4 5

Discovery


Development Test & Validation

Launching

Post Launch Review

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■ Gates■ Gates are positioned at key decision points in the product innovation process

in order to make an assessment of the project.

■ Questions (to be answered are each gate)

■ Quality of execution : Was the previous stage execut ed with the required quality level ?

■ Business Rationale : Is the project still attractive on an economic and business perspective ?

■ Action plan : What is the action plan and the requir ed resources to perform the next stage ?

■ Decision (to be decide are each gate

■ At each gate the decision can be : Go, Kill, Hold o r Recycle

■ Structure■ Deliverables : What was delivered by the project te am following the

previous stage.

■ Criteria : Metrics on which the project is judged fo r the Go/Kill/Hold/Recycle decision and projects are prio ritized.

■ Output : Result of the gate review (Go/Kill/Hold/Rec ycle); an action plan for the next stage; a list of deliverable for the next gate and a date for the review.

Stage-Gating Model2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stages■ A stage is a predefined step in the product innovation process:

1. Discovery2. Scoping3. Business Case4. Development5. Testing & Validation6. Launching7. Post-Launch Review

■ A stage is executed based on the action plan decide d at the previous gate.

■ A stage is a set of cross-functional and parallel activities performed by a team of people from different functional areas in a comp any.

■ Approach1. A stage is composed of activities (done by the people from the functional areas)

2. These activities are integrated in a common analysi s3. The result of this analysis is outlined in the deli verables for the next gate.

Stage-Gating Model2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 0 : Discovery■ The first step in all innovation project is to have an idea on what

to work on.■ Idea Generation Activities

■ Stimulate creativity

■ Brainstorming

■ Group Thinking exercise

■ Look internally for ideas■ Management team

■ R&D Experts and Designers

■ Testing Engineers

■ Manufacturing Technicians

■ Etc.

■ Look outside the company for ideas■ Customers & Lead Users

■ Suppliers

■ Competitions

■ Products outside the company normal market

■ Etc.

Stage-Gating ModelDiscovery

Not all companies have formal activities to generate product ideas but ways exist to stimulate creativity…

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Gate 1 : � This gate is to formally present an idea to the exe cutive

team to get the authorizations to proceed with the first stage �� Scoping

■ Stage 1 : Scoping■ Evaluate the idea

■ The product itself

■ The targeted market

■ The business opportunity

■ What are the product strengths & weaknesses ?

■ What would be competition ?■ What are they doing ? Their current focus ?

■ In which market ?

■ What could be the threat ?

■ Why should the company invest in this idea ?

Stage-Gating Model

1

Scoping

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 2 : Business Case■ Step 1 : Product Definition and Analysis

■ What creates value for the client ?

■ Market Analysis (size, segmentation, trends, sales channels)

■ Competitive Analysis (Technology Gap, Market Share, Business Strategy)

■ Technical Concept (PRD)

■ Current Patents Analysis (which patents could have an impact ?)

■ NRE + Manufacturing + Product Launching Costs Estim ates

■ Step 2 : Building the Business Case■ Result of Step 1

■ Legal & Regulatory Requirements

■ Health, Safety and Environment considerations

■ Assumptions used for the analysis & Out-of-bounds c riteria

■ What is the window of opportunity ? (how much time do we have ?)

■ Step 3 : Building the project plan■ Schedule, Budget and required resources

■ Step 4 : Feasibility Review

Stage-Gating Model

Very difficult stage based on anticipation and

consuming a lot of resources

2Business

Case

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 3 : Development (technology & marketing)■ Execute what was decided in the previous stages

■ Focus on the technology and align the marketing

■ Do not forget to develop your manufacturing process

■ Do not forget the Maintenance, Support & Logistic A pproach

■ Perform specific pre-launch activities

■ Define key milestones for interim decisions/re-alig nment

■ Use a structured technology development process■ V-Model or else

■ Keep it as lean as possible

■ Use people from all areas of the company■ Engineering, Production, Procurement, Logistics, CM , Etc.

■ Use a structured project management process■ Project Management Institute (PMI)

■ Use prototypes to validate concepts■ technology and marketing

Stage-Gating Model

Execute what was previously decided and planned

3 Development

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 4 : Testing & Validation (technology & marketing)■ Evaluate what was done previously

■ The technology itself

■ The manufacturing process & approach

■ The maintenance and support concept (ILS)

■ Evaluate customer acceptance■ Use lead user or key customer to get their inputs

■ Fully test/validate what was done■ Near Testing

■ Test the product including the technology (bugs)

■ Field Testing■ Have it tested by customers (in a controlled enviro nment)

■ Market Testing (optional)■ Test your launching plan in a controlled market

■ Only required because you have doubts �� could jeopardize your strategy by giving information to your competition !

Stage-Gating Model

4Test &

Validation

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 5 : Product Launching■ Finalize and execute the marketing strategy

■ Create market awareness

■ Generate market demands (before launch)

■ Announce launching date

■ Finalize collaterals

■ Have adequate and sufficient marketing units to support market requests

■ Last chance to decide on the price !!!

■ Train the sales channels (internal & external)

■ Train the support team

■ Manufacture your initial production run■ Based on the anticipated market share

■ A mitigation plan is a good idea if you have more d emand than anticipated.

Stage-Gating Model

5 Launching

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1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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■ Stage 6 : Post Launch Review■ Review if the project/product objectives have been reached in

order to have a continuous improvement approach.

■ Objectives■ To instill a culture of accountability for results

■ Use metrics for all team members

■ To have performance metrics measuring how well a ne w product project performed■ Are the profits on target ?

■ Was it launched on time ?

■ To build-in learning and improvement

■ Focus on fixing the cause rather than putting a ban d-aid on the symptom, or worse, punishing the team.

Stage-Gating Model

Post Launch Review

2

1

3 4 5

Discovery


DevelopmentTest &

ValidationLaunching

Post Launch Review

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Stage-Gating Model �� Adaptation & Flexibility

Discovery

2 3 4 5Scoping Business Case

Development Test & Validation Launching

1Scoping &

Business CaseDevelopment

& Testing Launching3 5Post Launch

Review

Scoping & Business Case

Development, Testing & Launch3

Major New Product Development

B

A

C

B

A

C

Improvements & Modifications

Sales Forces & Marketing Requests

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■ Winning at New Products: Accelerating the Process from Idea to Launch■ Author: Robert G. Cooper

■ Product Innovation and Technology Strategy■ Author: Robert G. Cooper & Scott J. Edgett

■ Strategic Business Planning■ Author: Geoff Linton

■ Diffusion of Innovations� Authors: Everett M. Rogers

References

innovation process implementation

Technology

culture of innovation

product development

new product

new technology

guy lalibert

culture of companies

high technology companies

best technology