Preston Smith's Corner

Book Review: Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition

by Robert G. Cooper (Perseus Publishing; Cambridge, Massachusetts; 2001; ISBN 0-7382-0463-3) US$27.50

Robert Cooper is probably the leading authority on effective product development practices, and Winning at New Products as been a best seller in the product development field for years. This edition replaces one published in 1993. Professor Cooper has studied over 2000 new-product projects in 450 companies, many countries, and countless industries since 1975. His research theme has been consistent throughout: what distinguishes the winners (commercially successful products) from the losers? All of his earlier publications are based on this research, but in this new edition, he starts to share with us his actual consulting experience in applying the research to real companies. If your consulting practice involves new product development, this is the premier reference available on “best” practices in this field.

Despite its 438 pages, the book is easy to read because of Cooper’s lively, irreverent style for an academic. He describes dysfunctional cross-functional teams as “fake teams,” and one section is headed, “Lame Excuses for No Action.” Unfortunately, the comprehensive endnotes are done in normal academic style to substantiate the points made, so they provide few leads to alternative viewpoints or other sources of enrichment.

The core of this book, as you might expect, deals with Cooper’s voluminous research findings (Chapters 2–4). I found these bewildering, because he presents so much material that he slices in so many ways to produce apparently conflicting lists of main causes, weaknesses, key factors, critical success factors, and key drivers. As I distill it, his conclusion is that about 2/3 of new products that enter the development phase are failures, and 46 percent of the resources devoted to product development in the U.S. result in product failures. This waste occurs, Cooper claims, mainly because activities critical to success are skipped or executed poorly, activities such as

  • Preliminary market assessment
  • Detailed market study
  • Prototype testing with the customer
  • Test marketing
  • Preliminary technical assessment
  • Detailed business analysis.

Cooper’s prescription is to install a well-defined, consistently executed development process, which he has coined Stage-Gate™. Such sequential processes are very popular with management, being used today by 68 percent of firms, by Cooper’s estimate. If you would like to install such a gated process, this book is the place to start. Chapters 5, 6, 7, 9, and 10 describe the stages in detail. As intended, these gated processes bring order to chaos, and many companies find that quality of execution improves, the waste of rework diminishes, and consequently, cycle time will likely shorten.

However, I find that gated processes also have side effects that receive less attention. One is that they play into many managers’ command-and-control style, which does not empower the development team or encourage members to think for themselves. Basically, what happens is that the team produces deliverables, which management approves at the gate, whether or not these deliverables are the best way to bring a particular new product to market. The process is an attempt to inspect quality into the product, which is something we are trying overcome in modern manufacturing.

My other concern with gated processes is that they have inherent speed limitations, because they are sequential and gated. Object-oriented software development, which formerly used a sequential “waterfall” process, is now moving to an intentionally iterative process. In fact, MIT Professor Steven Eppinger and his colleagues are showing that a natural characteristic of innovation (product development) processes is iteration, and when we deny the iteration, it appears disruptively late in the process (see Harvard Business Review, January 2001, pp. 149–158). Thus, the mantra of do-it-right-the-first-time chanted by Cooper and many others is at odds with innovation.

This edition reflects some additions to and new insights on the Stage-Gate process. One is a new stage, Discovery, added to the front of the process, although unfortunately, many of the diagrams in this edition, including a critical one on the end paper, still omit the new stage. Discovery activities should go a long ways toward strengthening what Cooper calls doing the “solid upfront homework” that his studies show to be critical to winning. Another addition is a package of six Fs intended to speed up the process: flexibility, fuzzy gates, fluidity, focus, facilitation, and forever green. However, Cooper warns not to apply these advanced techniques until the basic process is well established.

Chapter 11 is perhaps the most valuable part of this new edition. It provides detailed advice on implementing a gated process in an organization. Implementation consultants will love it, because the author trades in his mortarboard for a consultant’s cap and offers hard-hitting advice from his personal experience:

  • “For every dollar and every hour you spend designing your new product process, expect to spend ten times that amount on implementation.” (p.323)
  • “One serious trap . . . is failure to keep the rest of the organization informed.” (p. 326)
  • “Getting (senior management) signoff at this point is absolutely critical; you’re wasting your time without it.” (p. 329)
  • “If people have not had a hand in crafting the process, there’s not much likelihood that they’ll willingly adopt it!” (p. 329)
  • “My personal observation is that there has never been a successful implementation of a formal new product process without the commitment and dedication of top management.” (p. 334)

He also offers excellent advice on documenting the process, naming it, marketing and selling it, and training people in the hard and soft skills involved. In case all of these gems escape you, he closes the chapter with “Ten Ways to Fail!”

All of the above deals with tactical matters, or what product developers call “doing the product right.” “Doing the right product” is just as important, and Cooper covers this in Chapter 8: Portfolio Management. His research here shows that the least-successful companies rely on financial analysis to assess projects, which is particularly dangerous early in the project, when such models are most likely to be used. Financial models are inappropriate because their input data is subject to large errors and because the models do not reflect the sequence of the decision-making process; options pricing theory is much more appropriate. For more on portfolio management, see Cooper’s 1998 book, Portfolio Management for New Products.

In his earlier writings, the portfolio management process was an appendage that didn’t seem to fit into the gating process, but Chapter 8 now suggests two ways of marrying the two smoothly: either let the gate reviews dominate, or let the portfolio reviews dominate. Along these lines, the last chapter of the book covers innovation and technology strategies, but these are not integrated into the other processes covered in the book. This is a perhaps a good place to end with the “areas for further research” for the fourth edition being to link all of this into corporate strategy.

Reviewed by Preston G. Smith CMC

(Reviewed in Consulting to Management, September 2002, pp. 54-56.)

(c) Copyright 2013 Preston G. Smith. All Rights Reserved.

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