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Sethi Challenges the Stage-Gate Process

Innovation is a central focus throughout all disciplines at Clarkson, but how does innovation come about? For over 15 years, Professor Rajesh Sethi has dedicated his research to answering this question.

Sethi's latest innovation study examines the widely-accepted Stage-Gate process for new product development and marketing. Challenging the well-established notion that the Stage-Gate process works for every product, Sethi's paper, titled "Stage-Gate Controls, Learning Failure, and Adverse Effect on Novel New Products" was labeled "newsworthy" by its reviewers and published in the Journal of Marketing [date].

A large number of firms have embraced the Stage-Gate process from idea to finished product. The process involves the use of several sequential review meetings to control new product development in order to bring discipline to "chaotic" new product development activity.

"Managing new products is such an important aspect of a business," says Sethi. "We knew that a lot of companies were using Stage-Gate, but we sensed that the process might not work for every new product. We explored the idea further and looked at all kinds of new products using the process."

Sampling 120 new product development projects, Sethi was able to show that the process does in fact have the potential to harm the performance of one type of new product in particular, novel or unique products, such as the CT scanner and cell phones, when they were first introduced into the market.

"We did extensive research, logging hours of interviews with company managers who use the Stage-Gate process," adds Sethi. "We found that because managers eagerly desire novel products, they make their gate evaluation criteria quite rigorous, making these products more likely to fail."

Sethi also concluded from his research that merely tinkering with the Stage-Gate process does not make it work for novel new products. He suggests that firms with these types of products design separate criteria and make the "gates" less stringent.

For the future, Sethi is planning a series of papers on the Stage-Gate process. He is also looking into more areas of innovation, including off-shoring practices in India, China, and Russia.