Toyota’s product development system is measurably 2-4 times more effective and efficient than the recognized best practice stage-gate process used in the US and elsewhere (see Michael Kennedy's book on Lean Product Development). Yet the corporate, best-practice New Product Development (NPD) paradigm--the stage-gate process--dominates in those organizations that use a formal product development process. How does a less effective process come to dominate? Why is Toyota virtually the only company using a set-based design process? What is the likely future of NPD process adoption within corporations?

If one likens this situation to the evolutionary process, with corporations being the organisms, then this situation makes sense when viewed from the perspective of the emergence of a new species that is better adapted to its environment.

In this case, Toyota represents a new species with better ‘DNA’ and hence a superior ‘metabolism’ and ‘physique’ that allows it to dominate its ecosystem. Toyota should ‘win’ if it’s adaptations are more suited to the ecosystem. This looks like what is happening. The set-based NPD process that Toyota employs is an advantageous mutation. Toyota is gaining in market share and others, with inferior ‘DNA’ are losing.

Like in nature, the emergence of a new, superior ‘species’ isn’t always obvious at first. It takes a while for the dominance to be clearly seen. As this happens other companies observe, and, those other companies that are adaptive, will eventually copy (and improve) the Toyota process.

An analogy is human evolution at the time when the cortex increased in size and humans suddenly had more ‘cognitive’ ability. Human’s didn’t instantaneously take over, it took a while for dominance to be achieved. The difference in this case is that corporations are composed of intentional agents that can observe and adapt. The organism (the corporation) can mutate and adapt itself. Corporations that mutate their own DNA in the right way will remain competitive. Those that do not, will indeed die out.