Stage-Gate Escalation

Abstract

In this article, we review resource allocation at former handset maker Sony Ericsson. Three observations reveal how innovation projects can escalate through a stage-gate process that is meant to minimize initial commitment. First, uncertainty makes business cases hard to disconfirm in the early stages of project development. Second, as information that can be used to disconfirm business cases becomes more readily attainable in later stages of development, an increasing focus on project completion discourages the updating of business cases. Third, if business cases are revised negatively, the heightened organizational attention appears to make discontinuations less likely. We contextualize these three findings, replicate them with data from a second company, and discuss their potential implications for organizing innovation under uncertainty.