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What is the Stage-Gate process for product development?
The Stage-Gate Process divides product development into 5 stages where progress to the next stage is approved at the gate. Projects proceed to the next stage only if they pass the gates at key decision points, also known as milestones.
Initially developed by R. G. Cooper (Stage-Gate is a registered trademark of Stage-Gate Inc.), a Stage-Gate process is a method where a project proceeds through a phased, sequential process where teams conceive and scope new products; they build a business rationale around the idea, and then develop a product; they then validate the product and launch it.
After each phase, gatekeepers, be they senior managers or members of a steering committee or other board, conduct a gate review where they confirm that the development team has met all of the goals of the different stages of development projects. They then 1) approve the project scope to continue into the next phase, 2) discontinue the project, or 3) request more work and hold another gate review.
The 5 Stages of the Stage-Gate Model
A typical Stage-Gate model of the product development process begins with an ideation or discovery activity where new ideas are forged. If the new product concept is approved, a project enters the Stage-Gate or Phase Gate Process. Typically, there is a pre-phase, which consists of discovery followed by five phases of the Stage-Gate process:
- Scoping
- Creating a business case
- Product design
- Testing/Validation
- Product launch
[Stage 0] Discovery (aka Ideation, Idea Generation)
During this process phase (also called the Ideation stage), team members may brainstorm or generate ideas. They then perform some preliminary research to ensure product/market fit. Cross-functional teams might visit customers or other stakeholders. They may assess customer needs and the concept’s fit with the company’s existing product portfolio. The most promising ideas enter the Stage-Gate Process.
1. Scoping
Working within the product management framework, project team members scope their projects to sharpen the product definition and remove risk. Teams scope projects to better understand the market conditions and assess the concept’s strengths and weaknesses. Project team members may use tools such as a SWOT analysis to ensure their offering is differentiated correctly and that the project’s basic dimensions and competencies (budget, schedule, resources) are in place.
2. Creating a Business Case
After scoping the project, the team creates a detailed business case. This usually includes a detailed definition of the product, a market strategy, a project plan, and a technical feasibility assessment, with deliverables associated with each activity. This is a project definition and planning activity. It decreases rework and increases the likelihood of project success.
3. Product design
The design or development phase usually involves creating a prototype. This is the engineering portion of the production process, where a new product takes shape. At the same time, the marketing team may begin its preliminary work according to the marketing plan. The team may review a project timeline with minor checkpoints to ensure the project is on schedule before proceeding to the next phase.
4. Testing/Validation
During this phase, the prototype or minimum viable product (MVP) is put through its paces. The testing phase may include field testing and market testing. The team may test and validate the financial viability as well as the technical viability of the product. This phase of the innovation process, which frequently sees iteration, involves metrics designed to remove most of the remaining risk from the project and move to the next stage.
5. Product Launch
In the next development stage, the project enters the idea-to-launch process. For a hardware/tangible products company, this phase may involve marketing and sales strategy, distribution plans, manufacturing plans, plans for quality control, and other business processes that will ensure a smooth and successful launch. The launch process may also look to the future and plan the product’s life cycle. For a software development company, the focus is usually on meeting quality and functionality goals.
The 5 Gates of the Stage-Gate process
At each phase, decision-makers assess the project’s progress against its plan and decide to move to the next gate. Managers or board members assess the quality of the previous phase and approve the project to proceed. They may make a go/kill decision about the project at each juncture.
There is a gate for each stage or phase in which the decision-makers assess the quality of execution of the previous phase. They assess the inputs from the last stage in the form of the data generated during the phase in question. They use metrics and other criteria to judge whether the goals of the phase have been met and may create action plans for improving the project as it continues.
They then have an output that typically looks like this:
- Go: The project moves on to the next phase.
- Kill: The project is judged unviable and is discontinued.
- Hold: The project is suspended and expected to be revived later.
- Recycle: The project needs fundamental revision and will re-enter the Phase Gate Process.
- Conditional go: The project enters the next phase, providing specific criteria are met.
Benefits and disadvantages of the Phase Gate process
Benefits
The Stage-Gate Process enables decision-making. Teams make better decisions faster. It is a structured approach providing a roadmap for product innovation. It allows teams to identify risks and potential problems quickly.
Phase Gate processes also allow companies to kill projects that aren’t viable. It guides teams to make a firm definition for the product and robust business case; an independent party of gatekeepers then reviews that. This eliminates risky and expensive projects that will not provide a return on the product development investment.
The Stage-Gate Process is stable and consistent. It provides a structure that can smooth execution and make product development more predictable and timely.
Pitfalls
Some argue that the Stage-Gate process is not agile. It is a sequential process that may struggle to respond to new information or new market conditions that crop up during development. It may involve freezing the spec too early, thus missing out on emerging opportunities.
Stage-Gate models may also entail too much management process, especially for smaller companies. Some companies may favor a lightweight process with fewer check-ins and fewer formal deliverables. Some companies may allow good project management techniques to substitute for formal stages and gates.
Also, some projects do not fit within the phases and gates structure. For example, an incremental improvement to a product may not require such formality. Also, blue skies and startling innovations may prove challenging to fit into the project process. The business case may be complex to make in a way that convinces decision-makers because the market for innovation has not yet matured.
Agile in the Stage-Gate Process
While some see Stage-Gate processes as so-called “waterfall” models, other approaches to phases and gate processes may be compatible with Agile.
We have helped teams to develop a hybrid approach where a process with stages and gates is designed to be compatible with Agile sprints. Teams may divide a long project into sprints and then nest the spirits within the phases of their Stage-Gate process.
Project Management and Agile Management
By encompassing sprints within a more extensive management process, teams can leverage the decision-making advantages of the phased approach while having the flexibility and agility of Agile/Scrum-type processes. In this hybrid approach, the development teams are engaged and productive as they become in an Agile environment. At the same time, management preserves the oversight they need to protect their investment in new product development and gain a competitive advantage.
5 Tips for Improving Stage-Gate Processes
1. Management support and compliance is crucial.
Management must support the Stage-Gate Process in theory and cooperate with it in practice. Individual senior managers cannot be allowed to game the system to ensure that their favorite project makes it through the process if it’s not worth it. Gate reviews must be conducted based on objective metrics and criteria. It’s up to management to preserve the integrity of the process.
2. Define roles and responsibilities.
With a defined process and a cross-functional team involved, a great deal must be done. Sometimes, team members step on each other because their roles and responsibilities are ill-defined. Team members may have different expectations and vocabulary, making coordination tricky. Make sure you know who is doing what at each phase. (It seems essential, but you’d be surprised…)
3. Master process design.
Knowing how to design and map a process is a precious skill. Clear, well-designed process templates will help you to navigate a project through the stages and gates. It will help you consider all aspects of the project, from product definition to release plans and guide the team and managers in making the best decisions.
4. Make sure the project has the right resources.
Resource allocation across projects is vital. Nothing is more frustrating than completing a prototype and learning that the tools you need to test it will not be ready, which will result in the project being delayed. Resource planning means clear communication between teams and functions to ensure you have everything necessary for success.
5. You will get what you measure, so choose metrics wisely.
The Stage-Gate model is evidence-based. This means that data is necessary each step of the way. Metrics are an essential part of proving the quality-of-execution case at each gate. However, metrics have a property that allows you to get exactly what you measure. If you measure the wrong thing, you will likely produce unintended outcomes that may slow you down or prevent your project from reaching its goals. Make sure you’re measuring the right things.
