Relevance and importance

The benefits of a formal innovation process are:

	Puts discipline into an ad hoc and chaotic process
	Provides a roadmap for the project leader, defining his/her tasks and deliverables
	It is a visible process known and understood by everyone in the company
	Forces more attention to quality of execution. The evaluation points are the quality control checkpoints.
	Creates a complete process - there are no missing steps
	It is multi-functional - it forces input from all parties
	It is faster - activities are done concurrently rather than sequentially

Overview

Different levels of management control are required for each phase of innovation: loose reins and freedom at the idea generation phase, but much tighter control on the subsequent development phase to achieve speed delivery. The most critical decision point is that allowing a project through to development, because development is the most expensive stage and it has a high failure rate. At this point a full business plan is needed, to which marketing, operations, finance and HR have all contributed. Formal discounted cashflow estimates and a clear statement of the project's strategic benefits are required at this point in the process.

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Recommendations and practical tips

The stage/gate process of innovation provides go/kill decisions at five gates, at each of which a project must apply for further funding. At the first gate an idea seeks funding for an initial few days of work, and has to meet only the simple criteria that it appears to be technically feasible, it appears to have market feasibility, and it is in line with company strategy.

Other stages and gates in the process are designed to:

	Manage and support the process for generating, collecting and reviewing new ideas or concepts.
	Estimate the wealth creation potential of each idea and continuously review it if the idea is taken forward.
	Ensure that during the implementation phase the minimum time to final commercialisation is achieved.
	Tear down the walls that separate research, design, and manufacturing.
	Set the criteria for passing, from one phase to another, which is set out in advance. Decision makers include representatives of all company functions.
	Use manufacturing as a respected place where the value of the idea is realised.
	Deliver innovative new products quickly and at competitive price. This requires an efficient and effective supply chain.

An important function of gate committees is to check that not only has the required work been done, but that it has been done with sufficient quality.

Warnings and potential pitfalls

Managers must utilise best practice project management in order to speed the process towards outcome delivery. Scientists are usually wary of this phase, claiming that it stifles creativity. However, a good idea must be taken to market quickly in order to capture its value.

Managing costs during product development is very efficient, but keeping the attention of development teams focused on the critical success factors of time-to-market, technology, and customer needs is also important.

Projects can be hard to kill because of the commitment of their adherents long after facts are available that indicate that the money should be committed elsewhere.

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