Explain how stage-gate systems are used by companies to manage innovation and new product launches.
Answer: Many top companies use the stage-gate system to divide the innovation process into stages, with a gate or checkpoint at the end of each. The project leader, working with a cross-functional team, must bring a set of known deliverables to each gate before the project can pass to the next stage. To move from the business plan stage into product development requires a convincing market research study of consumer needs and interest, a competitive analysis, and a technical appraisal. Senior managers review the criteria at each gate to make one of four decisions: go, kill, hold, or recycle. Stage-gate systems make the innovation process visible to all and clarify the project leaders and team's responsibilities at each stage. The gates or controls should not be so rigid, however, that they inhibit learning and the development of novel products. Many firms have parallel sets of projects working through the process, each at a different stage. Some firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.