1. Henkel’s Stage-Gate Process (Portugal Division)
NYU, New Products & Services Development
March 25th, 2006
MCM

2. Henkel’s Vision
Henkel
is a leader with brands and technologies that make people's lives easier, better and more beautiful.

3. Three Areas of Competence
Home
Care
Personal
Care
Adhesives, Sealants
& Surface Treatment
Consumer
Industry
Quality with Brands & Technologies

4. We do not develop new products
Henkel in Portugal
We do not develop new products
But...
We are able to launch in Portugal NEW brands or products that the company owns.

5. The Stage-Gate Process
Post
Launch
Review
Discovery
Stage 1
Scoping
Stage 2
Building the
Business Case
Stage 3
Testing
Stage 4
Gate 1
Idea Screen
Go / Kill 2
Second
Screen 3
Third 4
Forth

6. The Stage-Gate Process
Discovery / Ideation
Pre-work designed to discover and uncover opportunities and generate ideas
Promote internal campaign for ideas
Create a “bank Idea”
Assign a team member to manage
Ideas generated
Gate 1 – Idea Screen
Go/Kill decision point
This gate is a “gentle screen” and amounts to subjecting the project to a handful of key “must-meet” and “should-meet” criteria.
Is the idea aligned with the company’s mission, goals and strategy?
Is the market attractive?
Does the idea offer competitive advantage over competitors?
Is the idea part of the product portfolio of the company?
Does the company have expertise to manufacture the product (technical feasibility)?
Does the product fit with company’s policies?
Are there any killer variable (environment issue / legislative action)?
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill

7. The Stage-Gate Process
Stage 1 - Scooping
A quick, preliminary investigation of the projects – largely desk research
Preliminary market assessment to determine market size, market potential and market acceptance.
Internet search, library search, internal reports, customers, focus groups
Preliminary technical assessment to establish product objectives & feasibility
Quick and preliminary in/house appraisal of the proposed product
Preliminary business & financial assessment to map out strategic & competitive rationale
Gate 2 – Second Screen
Go/Kill decision point
The Idea is reevaluated in the light of the new information obtained in Stage 1.
Does the product respond to a customer need?
Is the competition moving to the same direction?
Is the company capable of manufacturing the product?
When would be the payback period?
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill
Scoping
Preliminary
Assessment:
Market
Technical
Financial
For the 3
“winners”
Stage 1
Second
Screen
- MKT
Manager & Country Manager
Go / Kill
Gate 2

8. The Stage-Gate Process
Stage 2 – Building the Business Case
A much more detailed investigation involving primary research – both market an technical – leading to a business case, including product and project definition, project justification and a project plan. It is the “critical homework stage”!
Define the “winning” new product (concept and positioning):
- Target market
- Benefits
- Desired features, attributes, requirements and especifications
Competitive Analysis
- Determine strength and weakeness
Detailed Technical Appraisal
- Manufacturability / cost to manufacture
- Detailed legal, patent, and regulatory assessment.
- Investment review
Business and financial analysis
Gate 3 – Third Screen
Go/Kill decision point
This is the last point at which the project can be killed before entering heavy spending. Here the full project team is design and it must be headed by a leader with authority!
Is the marketing still attractive to justify the investment?
Can the customer’s inputs be translated into technically and economically feasible solution?
Is the company responding to a competitor’s weakness?
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Scoping
Preliminary
Assessment:
Market
Technical
Financial
For the 3
“winners”
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill
Second
Screen
- MKT
Manager & Country Manager
Stage 1 2
Building the
Business Case
Detailed
Investigation for
the “winner idea”
Stage 2
Third
Screen
- Country Manager & Intl. SBU Manager
Go / Kill
Gate 3

9. The Stage-Gate Process
Stage 3 – Testing and Validation
Tests or trials in the market-place, lab, and plant to verify and validate the proposed new produxt and its marketing and production/operations
Carry out an extensive validation of the entire project
Implement in-house product tests
User or field trials of the product
Trial, limited, or pilot production
Pretest market, test market or trial sell
Reviewed business and financial analysis
Gate 4 – Forth Screen
Go/Kill decision point
This final gates open the door to full commercialization – market launch and full production or operations start-up. It is the final point at which the project can still be killed.
Was the testing & validation activities properly executed?
Were the results from the Testing and validation satisfactory?
Were required improvements implemented in the product?
Is the expected financial return according to the plan?
Are the operations and marketing plans reviewed and approved for implementation?
Testing
Test the product in 1 supermarket chain for 1 month
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Scoping
Preliminary
Assessment:
Market
Technical
Financial
For the 3
“winners”
Building the
Business Case
Detailed
Investigation for
the “winner idea”
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill
Second
Screen
- MKT
Manager & Country Manager
Third
- Country Manager & Intl. SBU Manager
Stage 1 2
Stage 2 3
Stage 3
Forth Screen
- MKT Manager & Sales Manager
Go / Kill
Gate 4

10. The Stage-Gate Process
Stage 4 – Launch
Commercialization – beginning of full operations or production, marketing, and selling
Implement of the marketing launch plan and the production or operations plan
Post Launch Review
Review product launch performance
Market acceptance
Ability to support technical product
Market trends
Finances
Revise financial review with updated information
- Review sales & profits
Review strengths & weakness
- Identify successful actions
- Identify mistakes/unsuccessful actions
Evaluate what changes (lessons learned) need to be made for future launches
Evaluate whether launched met criteria and fulfilled mission, goals & strategy of corporation & department
Forth Screen
- MKT Manager & Sales Manager
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Scoping
Preliminary
Assessment:
Market
Technical
Financial
For the 3
“winners”
Building the
Business Case
Detailed
Investigation for
the “winner idea”
Launch
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill
Second
Screen
- MKT
Manager & Country Manager
Third
- Country Manager & Intl. SBU Manager
Stage 1 2
Stage 2 3
Stage 3 4
Stage 4
Testing
Test the product in 1 supermarket chain for 1 month
Post
Launch
Review

11. New Product and Services Development
Conclusions:
The Stage-Gate is a plan that focuses on quality of execution, builds in the up-front homework, is strongly market-oriented and is backed by appropriate resources
This model brings discipline to the new product process
It is relatively simple and easy to understand and communicate.
The process provides a road map to facilitate the project and it defines the project leader’s objectives and tasks (include senior executives from the beginning)
Increase investment as risk decreases
Check acceptance with customer during the whole process
It gives you the opportunity to “Win by a nose!”
Post
Launch
Review
Forth Screen
- MKT Manager & Sales Manager
Discovery
Bank idea (Ideas Generation)
- The Product Manager manages the group
Scoping
Preliminary
Assessment:
Market
Technical
Financial
For the 3
“winners”
Building the
Business Case
Detailed
Investigation for
the “winner idea”
Gate 1
Idea Screen
- PM & Marketing Manager
Go / Kill
Second
Screen
- MKT
Manager & Country Manager
Third
- Country Manager & Intl. SBU Manager
Stage 1 2
Stage 2 3
Stage 3 4
Stage 4
Testing
Test the product in 1 supermarket chain for 1 month

13. ANNEXES - The Stage-Gate Process: The Development Stage
Stage 3 – Development
The actual detailed design and development of the new product, and the design of the operations or productuction process
Product development in parallel with corporate marketing & technical product development
- Rapid prototype, working model, or first prototype are taking to the customer for feedback / assess.
- Continue market analysis
- Map out a market launch plan involving corporate marketing and technical area.
Undertake lab tests, in-house tests and alpha tests
Revise financial analysis with update information
Assess legal issues (approval patents, regulations)
Gate 4 – Forth Screen
Go/Kill decision point
Is the developed product consistent with the original quality definition specified at Gate 3?
Does the product continue to be attractive to the market?
Is the product ready to move forward to Testing?
Are revised financials still with Budget?
Are the marketing and operation plans reviewed for probable future execution?