What is the Stage-Gate process for product development?
The Stage-Gate® Process, sometimes called a Phase Gate Process, is a methodology where new product development is divided into key milestones (stages or phases) that resolve at major decision points (gates). Projects proceed onto subsequent phases only if they pass the gates, which are at key decision points, also known as milestones.
Originally 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 of these phases, 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 each stage/phase. They then 1) approve the project 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:
- Creating a business case
- Product design
- Product launch
Discovery (aka Ideation, Idea Generation)
During this process phase, team members may engage in brainstorming or other means of idea generation. 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.
Team scopes their project to sharpen the product definition and to remove risk from the project. 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 make sure their offering is properly differentiated and that the basic dimensions and competencies the project entails (budget, schedule, resources) are in place.
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 of these activities. This is a project definition and planning activity. It decreases rework and increases the likelihood of project success.
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.
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 involves metrics designed to remove most of the remaining risk from the project.
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 begin to 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 progress of the project against its plan and make a decision 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 previous 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 in the expectation that it will be revived later.
- Recycle: The project needs fundamental revision, and then it will re-enter the Phase Gate Process.
- Conditional go: The project enters the next phase, provided that certain specified criteria are met.
Benefits and disadvantages of the Phase Gate process
The Stage-Gate Process enables decision-making. Teams make better decisions faster. It is a structured approach that provides a roadmap for the product innovation process. 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 strong definition for the product and strong business case, that is then reviewed by an independent party of gatekeepers. 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.
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 the development process. 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 that has 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 sky, and startling innovations may prove hard to fit into the process. The business case may be difficult 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 gates processes may be made 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 larger management process, teams are able to 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, while 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 not only support the Stage-Gate Process in theory but cooperate with it in practice. Individual senior managers cannot be allowed to game the system to make sure 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, there is a great deal to get done. Sometimes team members tend to step on each other because their roles and responsibilities are ill-defined. Team members may have different expectations and even an entirely different vocabulary that makes coordination difficult. Make sure you know who is doing what at each phase. (It seems basic, 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 to make the best decisions.
4. Make sure the project has the right resources.
Resource allocation across projects is key. Nothing is more frustrating than completing a prototype and learning that the tools you need to test it will not be ready with the result that the project is delayed. Resource planning means having clear communication between teams and the functions to make sure 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 important part of proving the quality-of-execution case at each gate. But metrics have a property that you will get exactly what you measure. If you measure the wrong thing, you’re likely to produce unintended outcomes that may slow you down or prevent your project from reaching its goals. Make sure you’re measuring the right things.