“Top performing companies focus on the four drivers of the Innovation Performance Framework” says Dr. Scott Edgett, Co-Founder and CEO of Stage-Gate® International. These fours drivers are Strategy, Portfolio Management, Process, and Culture and Leadership.
In this blog I want to address the importance using a Product Innovation and Technology Strategy, aka PITS. PITS is the component of the Innovation Performance Framework that ties the business goals to those of the new product development (NPD) effort. Otherwise, how much, and, on what, will we spend our resources on and in what order or when?
Organizations that take the time to develop a product innovation and technology strategy have fully evolved into an enterprise that is thinking long term and is focused on those product innovations that will sustain growth. This Product Innovation and Technology Strategy is a component of an organizations overall business strategy, it is an enabler, the essential link between the business goals of the organization and its innovation and product development efforts.
Unfortunately, in my experience most organizations prefer the “spray and pray” approach. You know the one, where the product development pipeline is flooded with projects and nothing ever gets killed! The one where every idea ever conceived gets launched. The one that looks like a bloated tunnel versus the much more desirable funnel.
How do you avoid the “spray and pray” approach? You ensure that your product development efforts are in alignment with your PITS.
How? First, the strategy must be clearly communicated and widely known. The gatekeepers of the organization are often spread across several levels of management and serve as the decision makers for product development efforts. Therefore, they must have a clear understanding of the PITS, so they can fairly evaluate the strategic alignment of product development projects quickly and accurately at the gate level. For example:
- Which markets are we focusing on?
- How are we attacking those markets?
- Are we an industry leader or a fast follower?
Second, use the scorecard. In my opinion, Strategic Fit/Alignment should be the first critical evaluation criteria on every scorecard. The scorecard is the vehicle that the gatekeepers need to identify those that are aligned versus, those that are not. Most importantly, those that are not. Those aligned should be pushed through, however, not so fast, this is not a free pass to development, but that is a topic for another time. Those not so aligned need to be identified as early as possible and stopped, or to use Stage-Gate lingo, Killed!
This increased focus (fewer) on only those projects that are most likely to succeed will create an environment where your resources are appropriately spread allowing for high quality of execution (better) which will ultimately increase speed to market (faster). It is the combination of these three benefits of applying strategy, “Fewer, Better, Faster,” that will drive sustainable growth and revenue back to the organizations business strategy.
Clearly understanding and applying an organization PITS has been found to be the most effective way of ensuring the product development teams are working on the “right stuff”. Focusing on the “right stuff” will ensure that you have a portfolio that is not over loaded with projects that are consuming your most valuable resources, both people and money. Dr. Cooper has coined this phase when discussing the two-pronged approach to product development, “it not just about doing projects right but also doing the right projects.”
To learn more about this topic, I invite you to read the new eBook “Top 5 Evaluation Criteria for your Product Portfolio: Advancing your Stage-Gate Process with Portfolio Management.”