Drs Sethi and Iqbal published a very interesting article recently in the Journal of Marketing (vol. 72; January 2008; pgs 118-134) entitled “Stage-Gate Controls, Learning, Failure, and Adverse Effects on Novel New Products”. I led R&D groups and studied radical innovation for many years and this is one of the few studies that examines the impact of managing novel product development using traditional (incremental) tools. In discussion with experienced innovation leaders from large technology companies that have managed radical innovation portfolios, it is intuitively understood that traditional incremental innovation processes are not effective for radical innovation.
Radical innovation carries with it significant uncertainty, not only technically, but also for the market, organization and in the business model. In fact, Dr. Gina O’Connor et al describe a very different innovation process for radical projects in their new book, Grabbing the Lighting. They discuss a model which involves three key steps: Discovery, Incubation, and Acceleration. Grabbing the lighting describes the practices used by twelve large companies to establish and maintain a radical innovation competency, but does not show what would happen if standard innovation processes were used for these projects.
Dr. Sethi’s and Iqbal’s study is one of the first of its kind that I have found. This study suggests that traditional innovation tools like a stage gate process may provide a high degree of comfort and control for management, while actually impeding the development and learning needed to make these novel products successful. Based on this study, a series of management implications are drawn that are intuitive but also profound. Stage gate processes have the possibility of impeding and disrupting novel product development. It is better to design special gate processes for novel product development and it is wise to use the different gate review “committees” to evaluate these products versus incremental projects. Using rigorous gate criteria, especially when the technology is in flux or transition, significantly limits product and market learning and thus lowers the potential of success.
