N e w Product P r o c e s s e s at Leading Industrial Firms

Robert G. Cooper Elko J. Kleinschmidt

This article is about game plans for new products. The

strategic importance of product development coupled with high risks and failure rates has led many companies to reconsider the way they 3o about conceiving, developing, and launching new products. Some firms have adopted a formal new product process or "stage-gate system" for moving new product projects from idea to launch [1]. This article reports the performance results that a handful of leading firms--IBM, 3-M, GM, Northern Telecom, and Emerson Electric--have had with implementing such new product game plans.

INTRODUCTION
New products are critical to the long term success of the industrial firm. Faced with increasing competition, especially from foreign firms, the heightened pace of technological change, and increasing demands from their own customers, more industrial firms are looking to product innovation to help them achieve a sustainable competitive advantage. A Coopers and Lybrand study [2] revealed that industrial product companies, particularly those in mature markets, are deemphasizing product modification and focusing on developing unique products as their strategy for the '90s.

A company's ability to improve the product innovation process--to drive new products from idea to launch faster and with fewer mistakes--is critical. But new products continue to fail at an alarming rate: only one product development project in four becomes a winner; almost 50% of the resources that U.S. firms spend on product innovation are spent on commercial failures [3]; and 63% of senior executives are somewhat or very dissatisfied with their firm's new product performance [4]. Institution of formal new product processes or stagegate systems is one way to improve the efficiency and effectiveness of industrial product innovation. For example, a Booz-Allen and Hamilton study [3] shows that new products perform better when firms have adopted such game plan approaches; and those firms with the longest experience with formal new product processes achieve the highest success.

FORMAL NEW PRODUCT PROCESSES

The research reported in this article explores the performance results achieved by five leading firms which have implemented new product processes or stage-gate systems. A stage-gate system is both a conceptual and operational model for moving a new product project from idea to launch [1, 5]. It is a game plan or blueprint for action for improving the effectiveness and time efficiency of the new product process. While the details of each

Address correspondence to Elko J. Kleinschmidt, Associate Professor of Marketing, McMaster University, 1280 Main Street West, Hamilton, Ontario, Canada. L8S 4M4.

Industrial Marketing Management20, 137-147 (1991)

Elsevier Science Publishing Co., Inc., 1991 655 Avenue of the Americas, New York, NY 10010

137
0019-8501/91/$3.50

Preliminary

Detailed Investigation {Business Case) Preparation

Development

Testing & Validation

Full Production ~ Market Launch

Idea

Initial Screen

Second Screen

Decision on Business Case

PostDevelopment Review

PreCommemlellzatlon Business Analysis

Post Implementation Review

FIGURE 1. Overview of a Typical Stage-Gate New Product System, company's system varied, a typical model is illustrated in Figure 1. Although new product processes vary from firm to firm, stage-gate systems generally have the following characteristics: 1. Stage-gate systems break the innovation process into a standard series of stages (typically three to seven stages). Each stage is comprised of a set of prescribed activities, such as: conduct user needs-and-wants market study; perform extended, controlled user field trial; undertake patent search; Often, hundreds of identifiable activities are defined and assigned to the various~stages. 2. The stages cut across functional and departmental boundaries: they are multifunctional and multidisciplinary, involving R&D, Manufacturing, Marketing, Quality Control, and others within any one stage. No stage is dominated by any group; there is no such thing as a "Marketing stage" or an " R & D stage." 3. Decision points or gates separate the stages. The gates provide for review of the project at the completion of each stage, and include a set of inputs or deliverables--what the project leader must accomplish or deliver before entering a gate. These are the project leader's and team's objectives, and are fairly standard for any one gate. Gates control the innovation process: here Go/Kill decisions, project prioritizations, and quality of execution checks are made based on a preset list of criteria. Gates also have a list of criteria against which the project will be judged for the Go/Kill decision, prioritization, and quality check. . Organizationally, the project is undertaken by a multifunctional team headed by a team captain or project leader. The team and leader see the project through the process from idea to post launch. Hand-offs are not a part of this game plan! Senior managers watch the gates, making critical Go/Kill and resource allocation decisions. . The process is designed for speed and quality of execution: parallel processing of activities (many activities occurring concurrently within a stage, rather than sequentially) and efficient, timely gate decisions keep the project moving along; effective project evaluations focus resources on meritorious projects, and quality control checks ensure that the project is well executed.

THE R E S E A R C H A formal new product process promises many things: better discipline, project evaluation, and prioritization; fewer errors of omission and commission; and provides a road map for the project leader and team. For the manager considering implementing such a process, these and other potential benefits are largely speculative. The real issue remains: what are the concrete results, if any, of actually implementing a stage-gate system? The answers can only be obtained by observing those firms where new product processes have been implemented and by questioning managers who use the process. The research reported in this article explored the performance results achieved by five leading firms which have implemented new product processes or stage-gate

ROBERT G. COOPER the Lawson Mardon Professor of Industrial Marketing at McMaster University in Hamilton, Ontario, Canada. ELKO J. KLEINSCHMIDT is Associate Professor of Marketing and International Business at McMaster University.

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"The importance of a company's new product process."

systems, and entailed in depth personal interviews with 29 managers in nine different industrial divisions across the five companies. The nature of firms and managers interviewed is provided in Table 1. The interviews were based on a lengthy questionnaire with open-ended and scaled questions. The questions dealt with performance results, nature of the process, rationale and triggers for its implementation, and implementation issues. "The process requires Marketing people to do analysis up front--what the market needs is very clearly defined n o w . " No system designed to improve product innovation is without its weaknesses. There were some cautious assessments, too: "A positive contribution.., a little bureaucratic, but otherwise good." "It has created some time-consuming steps, but the overall effect is good." The specific performance results achieved by implementing stage-gate systems are impressive. Managers were asked to describe the actual results of implementing a new product process in their own firm. The comments from these open-ended, top-of-mind discussions were coded and categorized to identify and rank the areas of major impact. Improved product success rates, higher customer satisfaction and meeting time, quality and cost objectives were the most frequently cited areas of positive impact (Table 2). More than one third of managers, without prompting, indicated that the process' strongest impact

PERFORMANCE RESULTS
Stage-gate systems are a success, accordi~g to the managers interviewed. Managers were first asked to assess the overall contribution of their formal new product process to their company's development program. A scale ranging from one ("highly negative") to five ("highly positive impact") was used. The results are clear: managers wholeheartedly endorsed the new product process, the mean score being 4.25 out of 5. Comments were enthusiastic: "It's critical for success, t'' "It keeps us on track and streamlines the process [of product development]."
TABLE 1 Breakdown of Firms/Divisions and Respondents Type of Firm
Telecommunications Automotive Computers Machinery Materials

Nature of Divisions
Research division Product group Software development Software development Compressors Power tools Packaging materials Occuaptional safety Materials

General Management*
1 1

Marketing Management~
1 1

Technical Management*
1 2 2 1 2 1 2 2 13

1 2 1 1 1 1 9

1 1 1 1 1 7

Total

*General Management includes divisional General Mangers, senior VPs, etc. *Marketing Management includes VPs or Directors of Marketing. *Technical Management includes VPs of Technology, R&D or Engineering.

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TABLE 2 Impact of Formal New Product Process % Managers Citing* 34

34 31 28 24 21

Impact
Improved product success rate and higher customer satisfaction Product developed on target (meets time, quality, and cost objectives) Faster to market Improved profit performance (sales and margins) A learning tool: educates our people Improved cooperation and coordination among people involved in the project, e.g., different departments or functions Fewer errors; less recycling; less redesign Improved communication Better project control *Totals more than 100% due to multiple responses.

that stage-gate approaches do work. The degree of improvement in six key areas was rated on a five-point scale (1 = no improvement, 5 = great improvement) to provide quantitative and consistent measures of performance impact. The results, given in Table 3 are provocative, and provide strong support for implementing a formal new product process. There was significant improvement in all six dimensions of performance. Although answers varied, there were very few instances where " n o improvement" was cited. The major benefits of implementing a new product process, in rank order are:

17 17 10

1. Improved teamwork. Managers saw significant improvement in interfunctional teamwork. The fact that new product processes stress multifunctional activities and use multifunctional criteria at each gate promotes and demands this teamwork: "There is a much smoother transition from lab to manufacturing. Manufacturing is involved [in the project] almost from the beginning." "Common priorities are now supported by all functions." "There are more multifunctional discussions and information exchange, and earlier commitment by Marketing and Manufacturing." 2. Less recycling and rework. The amount of recycle and rework--going back and doing it again--was greatly reduced. New product processes generally have a number of quality checks built into the process to ensure that critical activities are carried out, and in a quality fashion, thereby reducing the incidence of recycle: "There are fewer design changes late in the proje c t - w e get the specs definition right."
TABLE 3 Rated Improvements Achieved by Implementing a Formal New Product Process Mean ~mprovement* Range
4.11 3.83 3.80 3.41 3.35 3.32 2-5 2-5 2-5 1-5 1-5 1-5

was on the success rate of new products and the customer satisfaction achieved. Managers revealed that a much stronger market orientation had been built into their new product game plan, and that key activities, such as market studies and concept tests, were now an integral facet of their product development efforts. The comments were positive:

"Product success is more likely now." "We've managed to greatly improve customer satisfaction." "Our products really meet market needs, and they succeed more often--fewer failures."
Thirty-four percent of managers cited being on time and on budget--meeting project/product objectives--as another payoff. New product processes brought discipline into product development, where previously there had been chaos; and more attention was focused on time schedules and deadlines, as well as project costs and objectives:

Performance Dimension
Improved teamwork/better communication Less recycling/rework Improved new product success rate

"The projects are on target [now]: on time, and on quality and cost targets."
Respondents also volunteered that the process brought new products to market faster and resulted in better profit performance (see Table 2). There were virtually no negative comments in this open-ended discussion of the impact of the formal new product process. These top-of-mind comments provide some assurance

Better launch Earlier detection of failures Improved time efficiency/shorter elapsed time to launch

*Mean of 29 managers; 5 = great improvement, 1 = no improvement.

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"deficiencies of new product processes"

"The number of engineering change notices after release to manufacturing has dropped. We keep a detailed record of these." 3. Improved success rates. Managers noted that the proportion of new products that succeeded was higher, and the profitability from new products was also better. Stage-gate systems build in better project evaluations at the gates, hence culling out potential failures earlier; they focus more attention on key success activities, such as market studies, sharper and earlier product definition, and customer tests: "The number of projects that exceed (sales and profit) targets has risen considerably." "There are fewer customer complaints now. Our products are 'right' when production starts." " W e measure our new product performance based on profit contribution.., we know the success rate is up." 4. Earlier detection oJfailures. Potential failures were spotted earlier, allowing managers to kill the project outright or take steps to avert disaster. The use of gates with clear Go/Kill criteria, typical of most firms' processes, helped to sharpen the project evaluations: "Checkpoints throughout the process are key to spotting failures." " W e actually kill projects now. In the past, we'd just let them continue." 5. Better launch. Marketing planning and other market oriented activities are integral to most firms' new product processes, resulting in more involvement in the project by Marketing, and a better launch: "There is better internal coordination between Marketing and Manufacturing." " W e meet launch dates now, and on budget." "Customer launch]." acceptance levels are higher [at 6. Shorter elapsed time. This result was surprising: the common view is that a more thoroughly executed new product project takes a longer time. Not so, according to the managers interviewed. Better homework, more multifunctional inputs, better market and product definition, and less recycle all shorten the idea-to-launch time: "Compared to similar projects prior to having our new process, our times to launch are down." "The number of iterations in development has been reduced." "We stay on schedule more often n o w . " What are the potential weaknesses of stage-gate systems? Managers were asked to reflect on deficiencies of their new product processes. The results, based on an openended discussion and top-of-mind responses, are given in Table 4. There were no long lists of weaknesses cited, nor were the weaknesses considered devastating. Indeed, 10% of managers could not think of any weakness at all. The concerns voiced most frequently included: 1. Reliance on inter-functional communication. For any new product process to work well, there must be multifunctional inputs. Clearly, and in spite of the formal new product process, problems securing

TABLE 4 Deficiencies in the New Product Process

Weakness
Too much reliance on interfunctional cooperation Takes too long Stifles creativity Lack of real control Problems in developing and applying Go/Kill criteria Limited to only certain types of projects
Other weaknesses

% Managers Citing*
28 14 14 10 10 10 17 10

No weakness at all *Totals more than 100% due to multiple responses.

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"the process should be formal not rigid"

ii

but

this interfunctional cooperation remain in some companies. Note, however, that better teamwork and improved communications among functions and departments was rated as the number one benefit of implementing a stage-gate system. 2. Takes too long. This comment refers more to the time commitment required to execute the new product process well, and not so much to the elapsed time of projects. Elapsed time was actually reduced, but the person-days required to do a quality job were higher in some cases. 3. Stifles creativity. A minority of managers believed that their new product processes did nothing to encourage creativity, invention, and entrepreneurship. This is a valid concern, and a warning to other firms. Steps can and should be taken to ensure that creativity and invention flourish within a system that requires some degree of discipline. Suggested improvements that managers offered for their own new product processes are outlined in Table 5, and cover a broad range. Over one third of managers could see no improvement needed at all. But there were calls for improvements in terms of more discipline and better front-end or pre-development homework activities.

THE NATURE AND USE OF THE NEW PRODUCT PROCESS

The performance results of a new product process are impressive. But what are the characteristics of the process used? Figure 1 depicts the typical stage-gate process, and common characteristics are described. But certain features unique to each firm were explored during the interviews. Time in use. New product processes are rclatively recent developments in most companies studied. The mean time in operation had been 5.6 years, and only one firm had used the system for more than ten years. Universal vs. specific use. About half the processes studied are used universally throughout the division or company (see Table 6). That is, all new product projects, with the exception of very small projects and minor modifications, require use of the process. For half the firms, however, the new product process is used less consistently. For example, some firms use the process for certain classes of products, but not for others; there were differences from department to department in the use of the process; and certain types of projects, such as technology development projects, were exempt from the process. Formality. The formality and rigidity of processes varies from firm to firm. On average, managers thought that their process was quite formal, but not overly rigid (see Table 7). Of managers addressing this issue, 52% said their process includes formal gate meetings, complete with Exit or Go/Kill criteria, and with sign offs required; 34% said their process provides detailed descriptions of the tasks and activities to be completed at each stage or phase; 14% said their process requires careful documentation and reports; and 10% said their process specifies a set of "deliverables" or inputs for each gate which become the objectives of the project team. (Percentages total more than 100% because comments are not mutually exclusive.) Many managers commented that although the process was formally laid out, paperwork was kept to a minimum.

TABLE 5 Suggested Improvements for New Product Processes

Improvement
No improvements needed A more disciplined approach Better up-front homework prior to development
More decision-making authority lower down in the

% Managers Citing*
38 24 14 10 10 7

organization Broader applicability (across more product or project types; for other divisions) More contribution and commitment from Marketing *Totals more than 100% due to multiple responses.

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TABLE 6 Universal Versus Selective New Product Processes

% Managers Citing
Universal Totally universal: used for all projects within division Universal: except for small projects or minor improvements TOTAL Selective Inconsistent: used for some but not all projects Inconsistent: depends on department handling project Inconsistent: decision by management TOTAL 31 14 7 52 34 14 48

TABLE 7 Perceptions of Rigidity, Formality, and Expected Changes in New Product Processes Perception
Formality Rigidity Expected change * I = not formal; 5 = extremely formal *1 = not rigid; 5 = extremely rigid 1 = expect no changes; 5 = expect major changes

Rating
3.82* 2.59 * 2.43 $

tional areas, and the need for teamwork was frequently mentioned: "We needed a common understanding among the different departments involved in the project."

Lack of flexibility in the process was not a major concern. Table 8 summarizes the nature of flexibility or latitude allowed. Only 11% of managers saw their processes as totally rigid: that is, all stages and all gates must be adhered to, regardless of the project and situation. Typical comments were: "Each project has its own requirements and hence differing degrees of adherence to the total system." "The decision to bypass certain activities or review points can be made with the approval of management." Major changes were not generally expected in these new product processes in the near future, indicating a fairly high degree of user satisfaction. Almost two thirds (62%) of managers foresaw minor modifications and adjustments only; and another 13% foresaw no changes at all (Table 7). Of those expecting major changes, the nature of the changes included increased Marketing involvement (10% citing); and a simplified process (7% citing).

"We wanted Marketing and Manufacturing to be more involved and much earlier." "We needed to 'blur the lines' between different departments so that we could work as a team." "We desired a system to coordinate activities and improve communication, because many people are involved in a project, and over a long period of time." A second major motivation was the desire to improve the quality and timing of the activities that comprise the project. A total of 59% of managers cited a need for more effective and efficient execution of project tasks: "We wanted to improve our efficiency, product quality and timing." "[The need was] to accelerate the new product process for faster market entry." "[The process would] provide for better homework at the front end, yielding sharper product definition prior to development." "We had too much recycling.., going back and doing it again. We wanted better quality of execution the first time." The desire for a control and information system yielding discipline, controlling activities, and providing information for top management was the third major reason for implementing a stage-gate system. This was cited by 55% of managers. Typical comments included: "[The process] was needed to ensure that projects met company goals.

RATIONALE FOR A NEW PRODUCT PROCESS

What were the motivations underlying the implementation of a stage-gate system? The majority of reasons cited lie within six main categories; three motivations dominate (Table 9). The most cited motivation was the desire for better cooperation, communication, and coordination among people directly and indirectly involved in a new product project. Most often, these people report to different func-

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TABLE 8 Flexibility of the New Product Process % Managers Citing

39 29 1I 7 4 11

TABLE 9 Principal Motivations for Implementing a New Product Process

Nature of Flexibility
The process is flexible: it is situationally dependent The process is flexible and deviations are permitted, providing management approves The number of stages or phases depends on the project The activities and tasks are flexible provided major requirements are met The gates are fixed but their application is flexible The process is rigid--all stages and all gates are set and fixed

Reason
Better cooperation, coordination, and communication among those involved in the project Better, faster quality of execution of key tasks in the project: greater effectiveness and timeliness More control, discipline, and information: a management information and control system More structure: a road map or layout of key tasks so that none are overlooked or left until too late Better resource allocation decisions Lower level decision-making; team empowerment *Totals more than 100% due to multiple responses.

% Managers Citing*
69 59 55 24 10 10

"We needed better check points throughout the process." "Top management wanted to be kept informed and involved in the development process." "We desired a tracking of the status of all projects."
The need for structure--a road map to guide the proje c t - w a s mentioned by a minority of respondents (24%). Here the major concern was that key activities or tasks not be left until too late, or forgotten altogether. A new product project is complex, often entailing hundreds of tasks at different phases; standardized lists of tasks, broken down by stage, help to guarantee no critical errors of omission. Other reasons cited for implementing a new product process included the desire to improve resource allocation or budgeting decisions (10% citing) and the need to move decisions lower in the organizational structure to the project team level (10% citing).

work units had become larger, and projects more complex and involving more departments, revealed serious deficiencies in the way that new products were developed and launched. The dynamics of the marketplace--rapidly changing customer needs, increasing competitive pressures, and advancing technologies--was the catalyst for 31% of managers. A typical comment was:

"We weren't responding to changing markets fast enough. Our old approach couldn't handle the shorter life cycles of products."
The desire to introduce new products more quickly, to shorten the elapsed time from idea to launch, was the catalyst for another 24% of managers. This trigger is closely related to a changing market and competitive environment. Changing and more aggressive company objectives precipitated the switch to a more formal system for 17% of the companies. Most often the objective was for more new products and more growth from new products. Government, regulatory, and legal challenges were the catalysts for another 17% of firms. The complexities of dealing with government regulations, safety requirements, and product liability exposures had grown to the point where an ad hoc, informal process was no longer adequate. Occasionally the trigger was the result of several major errors in previous products. Product quality concerns-where insufficiently-tested products had gone to market without all the bugs worked out--initiated the quest for a better and more formal new product process in 10% of

THE SPECIFIC TRIGGER

A rapidly changing environment, new operating challenges, and deteriorating performance were the catalysts that led management to adopt a new product process. Managers were asked to describe the specific circumstances or events that precipitated the implementation. Results are shown in Table 10. The most frequently cited catalyst was a total lack of communication, coordination, and understanding that plagued new product projects (48% citing). The fact that

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"Previous s y s t e m s lacked cross-functional coordination and took too long."

the firms. The fact that the "old process" was simply inadequate was cited by another 7% of managers. that their old process had been highly structured, rigid, and restrictive: "We had very rigid procedures coupled with ad hoc interventions by senior managers." "[It was] a very structured process, with laborious check-off procedures." When asked what was wrong with the previous innovation method, the majority of managers pointed to a lack of coordination between functional areas (Table 12). Comments such as "there was enmity among different groups" and "there were heated disagreements among functions" were common. The length of time required to complete the process was also a frequent complaint: "The [old] process was simply too burdensome and bureaucratic to meet the time pressures--it took forever to get products to market." Other complaints were that the previous process was inefficient and costly (16% citing); that key steps and activities were often missed (16%); that there was lack of top management involvement and control (11%); and that there was insufficient flexibility (11%).

THE PREVIOUS PROCESS

What system did the new stage-gate system replace? Managers were queried about the process that had been in place prior to the current formal one (Table 11). Almost one-third indicated that they had had no process, or at best a very informal, ad hoc process. Another 24% said that a particular process was used, but that key phases of the project, important activities, and needed functional groups were not a part of the process: "We focused on getting the design to production, but not the product to market. Marketing was not a part of our [old] process." Some managers (21%) said that they had always used the current process, and that the "old process" was used too long ago to remember. Yet another 10% complained
TABLE 10 Catalysts Triggering Implementation of a New Product Process % Managers Citing*
48 31 24 17 17

IMPLEMENTATION
A vital question is how such stage-gate systems were implemented. For example, was it a management edict,
TABLE 11 Type of New Product Process Used Previously Process
Ad hoc, informal, or no process

Catalyst
Poor communication, coordination, and understanding of/in product development Rapidly changing markets, technologies, and competitive pressures Time pressures: too many products too late to market Changing company objectives: higher growth, more new products Government/legal/regulatory complexity, concerns, and liabilities Poor product quality/serious previous errors Old process simply inadequate *Totals more than 100% due to multiple responses.

%
31 2'4 10 21 14

Partial process (did not include all functions, groups, activities) 10 7 A rigid, restrictive process Have always used the current process Don't know

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TABLE 12 Problems with Previous Methods/Processes for Developing New Products % Managers Citing* 37
26 16 16 11 1I

Main Problem
Lack of cooperation/disagreements between functional groups and departments Process too slow Inefficient and costly Missing steps; key activities not done Too inflexible Lack of top management involvement and control

Data are percentages of firms which previously employed an alternate method. *Totals more than 100% due to multiple responses.

Most managers (90%) indicated that there had been start-up problems when the new product process was first implemented. In 80% of these cases, the problems were not deemed serious (Table 13). When queried further, 55% of managers confessed that the problems were with applications rather than with the process per se. That is, they or their staff had difficulty undertaking some of the tasks that the game plan required; the process itself was not problematic. Again, this may be due to the lack of education and training. But 45% of managers saw the process itself, not its application, as the root of the problem. A number of steps were undertaken to overcome these problems in initial implementation. Seventy-eight percent of firms worked on team building and teamwork solutions, 17% saw organizational redesign; 17% obtained greater involvement of more senior managers, and 10% simplified the system's design.

or was there bottom-up development and support? The most common mechanism used in 26% of firms was via a New Products Committee, which made the decision to implement, and then designed a process. Other approaches included a top-down directive (15% of firms), and in another 15% the process developed gradually--it simply appeared and grew over time. Initial response to the new system was by no means universally positive within firms. On a five-point scale, the initial response averaged above midrange (3.5), where 1 meant "poorly received" and 5 meant "very well received." Fifty-eight percent said the new product process was well or fairly well received, 14% said it was perceived as bureaucratic by many people, and 10% said the process needed revision initially. Another 7% reported that the reception of the new system was mixed: some liked it, others did not; and in 3% of firms the new product process was poorly received. The range of responses suggests that even the best-designed new product process will meet with mixed reviews on introduction. The subsequent positive results achieved, however, changed the views of the skeptics. The majority of firms did not provide formal training for their people when the stage-gate system was introduced. Fifty-five percent said the process was learned on the job, 24% provided some formal training combined with on-the-job learning, and 11% held meetings and discussions when the system was introduced. Only 10% of firms provided formal training. Perhaps the lack of training and education might explain some of the initial skepticism when the system was first introduced.

CONCLUSION
The goals of higher new product success rates, shorter development times, and more profitable new products will continue to be elusive. Those companies that lack a formal new product process, but hope to compete in the '90s with an ad hoc approach, may find themselves at a decided disadvantage. Now is the time to take a hard look at adopting a game plan approach to industrial product innovation. Not only have a handful of North American firms adopted stage-gate systems, but leading Japanese and European firms such as Toyota, Canon, Philips, and others, have also discovered the benefits. Finally, the design and implementation of stage-gate new product processes has produced enviable results for the

TABLE 13 Problems in Implementation of the New Product Process % Managers Citing

38 28 7 7 3 17

Problems on Start-up
Difficulties in applying the process Lack of cooperation and communication among those involved Lack of training/education in use of the process Too bureaucratic Too time consuming No problems

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firms that we studied. The evidence is clear: formal new product processes work!

REFERENCES
1. Cooper,
Products, R. G., Stage-Gate Systems: A New Tool for Managing Business Horizons, May-June 1990. New

2. Coopers and Lybrand Consulting Group, Business PIarming in rhe Eighties: The New Marketing Shape of North American Corporations. Coopers & LybrandiYankelovich, Skelly & White, New York, 1985.

ACKNOWLEDGMENT
This research was supported by grants from: The ACcounting Research Centre, McMaster University, and Esso (Exxon) Chemicals Canada Ltd.

Booz-Allen & Hamilton, New Product Management for the 1980s. BoozAllen & Hamilton, New York, 1982. Hopkins, D. S., New Products Winners and Losers, The Conference Board Report no. 773, New York, 1980. Cooper, R. G., Winning alNew Products. Addison-Wesley, 1986. Reading, MA,

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