Leavey Professor Sarangee Maps a New Product Development Path for Today’s Digital Gilded Age
The United States is currently witnessing what is being referred to as the "Digital Gilded Age," a period of rapid growth within the technology landscape, reminiscent of the industrial and corporate expansion seen in the late 1800s to early 1900s Gilded Age. Kumar Sarangee, an associate professor of marketing specializing in new product development and innovation, recently shared his insights on the contemporary processes of product innovation through findings of his research Agile transformation in dynamic, high-technology markets: Drivers, inhibitors, and execution.
“New product development is one of the most important activities for any company,” Sarangee began. “It is also an excruciatingly difficult endeavor, which is why new product development processes have been adopted by organizations for decades.”
During the Gilded Age and up through the turn of the 21st century, companies were utilizing what has been termed as a “Waterfall methodology” or “Stage-Gate new product development processes.” This methodology involves a sequential process starting with idea generation, progressing through research, development, testing, and concluding with production. Sarangee argues that in industries like manufacturing, the Stage-Gate method is advantageous, as it allows companies to allocate more time to research and development, thereby minimizing potentially costly mistakes.
“For example, when manufacturing cars and planes, companies are spending billions of dollars to create new products. If a product fails, companies will face huge financial losses in the areas of time, materials, and other resources,” Sarangee cautioned.
While offering many advantages, Stage-Gate processes have limitations such as rigidity, predictability, and an inability to handle shifting customer requirements.
Around 2001, with the shift of production into a new space during the dot-com boom, the Agile methodology emerged. This approach enables teams in the software industry to evolve and rapidly adapt — a necessity in a time when customer demand is high and technology is advancing faster than companies can keep up. Sarangee notes that the ability to bring products to market swiftly and respond to changing market conditions or customer preferences facilitated the widespread adoption of agile processes, particularly in Silicon Valley.
“Agile new product development processes are critical in industries that need to be fast moving,” explained Sarangee. “From software development to the production of COVID vaccines, time sensitivity leads to a prioritization of market reach over exhaustive issue resolution during research and development.”
While the Agile new product development processes might be well-suited for innovation in dynamic settings, this methodology also has its own set of limitations including repeated efforts, overworking, and busywork.
Sarangee and his co-researchers suggest a need for a reevaluation of the current processes. His research observes that some industries are using inappropriate methodologies—adopting a Stage-Gate approach when Agile is more suitable and vice versa. However, little research has investigated how organizations make the transition from old to new processes.
Having been around for three decades, Stage-Gate is familiar and popular among teams and managers and can be more easily aligned with corporate strategy, whereas Agile is more ad hoc or independent and requires a major mindset shift from the entire team and organizational culture in order to make the implementation successful.
Sarangee posits that striking a balance between Agile and Stage-Gate systems is essential to meet that specific challenge. “This balance,” he contends, “would enable organizations to meet the demands of our rapidly evolving society while ensuring that necessary research is incorporated to address societal needs.”
“Taking a pause to incorporate the customer's voice more effectively in the development process, is crucial as markets are inundated with new technologies, products, and software, often at the expense of understanding customer wants and needs,” Sarangee believes.