I’ve almost always worked in environments where I was doing design and engineering / mechanical design. Only designers would work on the creative phase and then design and engineering would work in parallel on the development to production phases. That was how the work was organized even at the consultants where I worked. I think it’s common where the products have a balance of aesthetics and functional needs.
I think the model that you are thinking about is in industries where the aesthetics are critical and resources are plentiful, like in automotive, although even there nothing is as cut and dry as the model suggests.
I would suggest considering another model which is having a team or at least some time reserved for advanced concept development. Most phase-gate systems effectively shut down research because we can’t associate the research and prototypes with an eventual sku or revenue generating work product. There was a period where I effectively managed myself and I would put aside every other Friday to work on ideas to pitch to the steering committee. If I had a team, I would try to pull for something similar.
One way to pitch that might be to have a negative gate. I know at one transport place, they have two or three negative gates which are meant to give the team the opportunity to experiment and figure out where they want the project to go without the intrusion of engineers analyzing the bolts and accountants running profit analysis. Another way might to be to pitch it as working on ideas in an idea pool (or half-baked ideas as I prefer to call them). That way management still has control, but you change the expectation from having a shop drawing to having a really clear idea for new product.
One last thing is to be careful. Talking to an R&D director in town at one of our biggest design employers, they struggled to make the kind of change you are trying to do. If production is used to coming to designers to get things working, it will take a big management effort to get them to go to engineering only. Plus, management will be under a lot of pressure the first time something is running late and engineering says they are too busy to handle it. Consider the cultural challenges that you will meet.
Good luck and I hope you let us know how it goes!