How Black & Decker and Xerox Corporations Used the Corning’s Five-Stage Stage Gate as Innovative tool to Stay Competitive

The five-stage stage-gate process is a five stage conceptual and operational roadmap as well as a quality control tool for moving a new product from initial idea to product launch.  This is a carefully designed business process widely accepted as a comprehensive research methodology into understanding what discriminates product success and failure and what quality standards can be imbedded to meet regulatory and customer needs. Stage one is the idea screening stage, stage two is the business case building stage, stage three is the development stage, stage four testing and validation, and stage five is the launch or post-launch review stage.  Each of these gates is very important.  Individuals and inter-organizational network must work collaboratively to ensure that their objectives are achieved at every gate of the process.  The stage-gate process is not an individual initiative; however, it involves the efforts of inter-organizational network or functional teams across all the functional areas in an organization.

            Stage-gate divides tasks into distinct stages separated by management decision gates.  “This model is a part of the new product development portion process where the products are screened through different levels of management to ensure that it is qualitatively sound.” (Petroy, 2007, class notes).  The cross functional teams that screen the processes are called gatekeepers; and each stage of development is called a gate. The cross functional team in this process includes: marketing, finance, sales, research and development, transportation, and all those           functionalities that are indirectly involved.  However, there is no specific stage labelled Research and Development or Marketing; what is gathered at those stages from all these functional areas is vital information or input in order to minimize risks and maximize returns on investment.  These cross functional teams must carefully complete and follow a rigorous quality and process standards in each stage or gate prior to obtaining management approval to proceed to the next stage of product development. 

            When properly implemented, the stage-gate promises to deliver tremendous success to organizations as illustrated below in Black and Decker’s case study.  Black and Decker has used the stage-gate process to revitalize its production line to eliminate competition, cut costs and made its drilling machines more cost effective and safer for consumers.  Black and Decker was not the only company to use the stage-gate process to improve processes and product quality, as well as reduce cost and and stay competitive.  Xerox has used this innovative product development and quality enhancement strategy to stay competitive in the copier industry when it realized that digital technology was a major threat to its lens copier line and needed to develop a new generation of copiers and printers based on digital technology.  Xerox used the stage-gate process effectively to produce state of the art  digital technology copiers and printers in a cost effective manner by involving learning teams and cross functional network within the organization.  Below is an industry position and case study of Black and Decker:

             Black & Decker (B&D) is a public corporation based in Towson, Maryland.  It is the world’s largest producer of power tools and accessories. B&D is also a major supplier of information systems and services to government and commercial clients worldwide.  “Founder in 1910 by S. Duncan Black and Alonzo G. Decker.  B&D is a piooner and leader in the hand held power tools and accessories with over $2 billion in revenues.” (Black and Decker Corporate Profile, 2005)  

Black and Decker has been very succesful in implementing Corning’s five-stage stage-gate process in its single product single market environment.  The development of a universal motor with a fixed width and variable length that can be used by the company in all of its drills, circular saws, and hedge trimmers was a success with the use of Corning’s five-stag stage-gate process.  Instead of producing different motors on different production lines to fit all the products mentioned above, a single universal motor was innovated which had resulted in a change of a single product architecture; and had given the company the ability to market a lighter and more profitable drills at half the price.  “The adoption and implementation of Corning’s five-stage-state-gate process had enabled B&D to gain dominant market share and drove many competitors out of business.” (Koen, 2004 p.4) 

B&D had to dramatically revitalize its product line to fight less expensive offshore manufaturers making inroads into the power tools industry.  The company’s strategic mission and vison was to redesign all of its power tools at the same time redesign manufactuing processes to achieve cost advantage and be compliant to new safety regulatory requirements at no added costs to its consumers.  B&D had met the tough safety regulatory requirement, had gained market dominance and improved revenues with the implementation of Corning’s five-stage stage-gate process. This was a critical value added innovative strategy as well as a qualtiy control measure for B&D to regain market dominance. 

One of the common debating topics when implementing five-stage stage-gate strategic management tool is, how does this process impact leadership and individual?  The answer is simple.  Individuals contribute or submit their input to the team through the stage gate process review meetings. This review team includes leadership and or management.  The team reviews a single project which could result in a Go/Kill/Hold/Recycle decision. The implication is that a project focused team determines whether a project should continue and how leadership can commit resources to ensure its smooth continuance.  If a product is determined to move to the next gate, it is the responsibility of leadership to make a broader resource prioritisation decisions.  This means leadership will determine how much funding will be allocated to monitor the new product in the next gate.  “The impact of this on leadership is that, leadership has to make prudent decision in ensuring that the right amount of funding is allocated as well as other leadership support.” (Espino, Kamienski, & Yapps, 1998 p. 37).

Apart from the stage-gate process, Total Quality Management (TQM) is another quality control tool widely used by organizations worldwide.  “TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design, engineering, customer service, and production) to focus on meeting customer needs and organizational objectives.” (Hashmi, 2002  p.1) This is a very similar process with the corning’s stage-gate process because they both seek to improve prooduction processes and increase quality.  TQM involves all inter-organational network just as the corning’s stage gate. It seeks to involve senior management and empower employees to immediately stop the production line when a defective component is detected.  Everyone asks as a watchdog to quality and waste.  Waste and reworks are unacceptable and this holds everyone to higher standards.

One of the production activities of TQM is Just in Time inventory and benchmarking.  This is where cost saving activities and quality standards are matched with the industry standards.  At this activity level, production inputs arrive just in time for production.  No warehouse of inventory to worry about and this could a major cost saving for the organization.

Organizations that implement corning’s five-stage stage gate process and TQM effectively will always be the dominant organization in their industry irrespective of competion.  This is clearly illustrated in Black and Decker’s case; and also how Xerox corporation implemented these innovative quality tools to meet the demand of its varied customers worldwide. Inter-organizational network and leadership must be motivated to be involved in every gate or process of these groundbreaking innovative cost saving and quality tools. Without the active involvement of these groups and leadership, the implementation of TQM and corning’s stage gate process will be a total failure.  In addition, for the implementation of these innovative quality tools to be successful, organizations will need both quality systems and a quality culture. 

References

Black and Decker Wikipedia (2005).  Company information.  Retrieved November 20, 2007

            from http://en.wikipedia.org/wiki/Black_&_Decker

Cooper, G.R., Edgett, J.S., & Kleinschmidt  J.E. (2002). Optimizing the stage-gate process: 

What best practice companies are doing?  Retrieved January 20, 2008 from

http://www.stage-gate.com/downloads/Optimizing_the_Stage_Gate_Process_Part_1.pdf

Davila, T., Epstein, M.J., & Shelton, R. (2006). Making innovation work. Upper Saddle River, NJ, Wharton School Publishing.

Dooley, L., O’Sullivan, D. (2001). Structuring innovation: A conceptual model and implementation methodology. Enterprise and innovation management studies

Espino, R.L., Kamienski, P.W., & Yapps L. (1998).  “Gates system focuses industrial basic research”

Hashmi, K. (2000). Introduction and implementation of total quality management (TQM).  Retrieved  January 21, 2008 from http://www.isixsigma.com/library/content/c031008a.asp

Koen A. (2004).  The fuzzy front end for incremental, platform and breakthrough products and