Gated development processes are often compromised by bias and blind spots
Could a Blind Spot be hiding in your gated product development process? Every company has a development process. They go by different names, but each involves a process that guides a team through a series of gates from concept to launch. At each gate, the team presents its update and asks for permission to go on to the next step. The process is supposed to place rigor around activities that help define, develop and launch products. In theory one of the best ways to get a launch right is through the use of a good stage gate process that is data driven, governed by senior managers experienced enough to avoid biases and remain objective.
These processes are an integral part of business and product development. Yet despite this widely accepted practice, new products have a failure rate of 25 to 45%. In many cases, the issue can be traced to a “blind spot”.
Avoiding “The Blind Spot” According to Andrew Campbell, Jo Whitehead, and Sydney Finkelstein in their 2009 HBR article “Why Good Leaders Make Bad Decisions” unintentional biases creep in to the decision making processes, often with tragic results. They postulate that a simple solution to eliminate biases that causes a blind spot is to involve someone who has no attachments or self-interest in the team, the management, and/or projects goals and objectives.
Case in point A $300 million Healthcare group known as Envision Health (Not the Real Name) acquired a new technology from a small entrepreneurial company. Upon first glance the product value proposition and recent sales history indicated its potential as a rising star. That data looked good, everyone was on board with the project and it breezed through their development process. Contracts were signed, payments made, manufacturing begun, the launch was eminent.
Identifying the “Blind Spot” Soon after Envision acquired and launched the product it became clear that something was wrong. Initial sales and pricing were lagging far behind expectations. They called in the Launch Advisory Team to analyze the situation and bring an outside perspective to the process. The analysis exposed a “blind spot”.
The analysis showed that initial sales and higher ASP were the result of a nationwide backorder caused by a recent epidemic that coincided with the launch of the product prior to acquisition. Customers snapped up the product regardless of price, but once the backorder ended, the market quickly returned to its normal state, dominated by 2 large competitors.
Making the Hard Choices Sometimes it is hard to identify the blind spot, particularly when there are pressures to move ahead with the project and show results. In this case, poor launch sales had cause the leadership team to take a step backwards and reevaluate the program. With the blind spot exposed the company was able to make adjustments to their launch strategy on the fly, but more than likely would not have acquired the product in the first place.
Knowing what could go wrong sooner would have complimented the stage gate process by introducing an unbiased analysis, and would have gone a long way in making the right decision. That’s why we are the Launch Advisory Team.
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