Preston Smith's Corner

Stage Gate* Process Versus Time to Market

Phased development processes, today frequently called stage gate* processes, are used in some form by perhaps half of the companies developing new products. Stage-and-gate processes  have a great deal of appeal to management, because, basically, they restrict investment in the next stage until management is comfortable with the outcome of the current stage. The gate can be effective in controlling product quality and development expense.

Unfortunately, they also have several characteristics that lead to delay when time to market is paramount. Below we describe these characteristics, but let’s look at their history first. Such systems can be traced back to phased project planning, created by NASA decades ago for managing massive aerospace projects. According to product development expert, Robert G. Cooper, who has popularized a stages-and-gates process since 1988, his third-generation process encourages time to market because it incorporates the six Fs: flexibility, fuzzy gates, fluidity, focus, facilitation, and forever green (see pages 145-150 of his Winning at New Products).

phased and gated process

Stages-and-gates processes break work up into sequential phases, thus thwarting parallel, overlapping activities, especially when they cross the decision points. Such processes do not encourage completing tasks in earlier phases to keep them off of the critical path. In fact, they foster a mindset in which the work proceeds sequentially step by step, so it becomes difficult to even conceive of highly overlapped, iterative rugby-type processes. Although one of the features of the Robert Cooper’s third-generation process is “fuzzy gates,” this doesn’t clarify to management or the developers just which activities are supposed to proceed or stop at these decision points. For more on this, see the stages-and-gates discussion (Beware of Phased Development) on page 3 of our article, “Shortening the Product Development Cycle” or pages 164-166 of Developing Products in Half the Time.

For another, very insightful view on how gates really work, download Don Reinertsen’s article, “Don’t Ask, Don’t Tell” (3 pp., 207 KB).

A newer alternative to stage-and-gate processes is the bounding box approach, which is essentially a management by exceptions technique in which certain critical parameters of the project, such as profit margin, project budget, product performance level, and launch date, are negotiated as the bounding box. Then the team is free to move ahead unimpeded as long as it stays within the box. Management regularly checks that the team remains within bounds, and it is also the team’s responsibility to notify management quickly if it finds that it is leaving the box. If the team leaves the box, then a management review considers whether the project should continue, and if so, the box’s limits are reset. For more on bounding box, see Laura Doyle’s presentation.

Another shortcoming of stages-and-gates processes is that they inherently force fundamental project decisions to be made earlier than necessary, thereby restricting your flexibility to respond to change and raising your cost of change. If change in markets, customer desires, technology, or management direction is characteristic of your development projects, consider flexible development techniques rather than phased approaches.

Development processes do not have to be sequential, in fact they cannot be sequential. For years, software developers used a so-called waterfall process, which was quite similar to a stages-and-gates process. But today, leading firms developing object-oriented software use a process with preplanned iteration (looping); see our Revisiting Iterative Product Development. More fundamentally, MIT professor Steven Eppinger has found that new product innovation has built-in iteration, some of it essential. When we don’t plan for the iteration, it occurs late in the project as a surprise. For details, see our Quick Tip “I know that innovation is naturally chaotic, but can’t we anticipate problems better?

If you want both speed and predictability in your development process, consider project risk management.

You can also pursue the topic of cycle time and when it is appropriate. Or you can explore the connections between phased processes and project management. If time to market is relatively unimportant and you prefer a sequential process which ensures that all steps are followed, consider Cooper’s Stage-Gate process.

* Stage-Gate® is a registered trademark of the Product Development Institute Inc. We use the term only in its generally used sense of a phased development process that provides alternating stages and gates.

(c) Copyright 2013 Preston G. Smiths. All Rights Reserved.

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