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stage-gate

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Stage Gate® Process

  • A systematic process (blueprint) for moving a new-product project through the various stages from idea to launch.
    • Adopted by over 70% of companies (best practices)
    • Risk managed
    • Decision process is incrementalized
stateDiagram-v2
    direction TB
     full system
    f: Full System
    state f {
        state "Stage 2: Business Case" as s2f
        state "Stage 3: Development" as s3f
        state "Stage 4: Testing" as s4f
    }
    note left of f
        High Risk
    end note

    s1 --> s2f : Gate 2
    s2f --> s3f : Gate 3
    s3f --> s4f : Gate 4
    s4f --> s5 : Gate 5
    
    s1 --> s1 : Spiral/Iteration
    s2f --> s2f : Spiral/Iteration
    s3f --> s3f : Spiral/Iteration
    s4f --> s4f : Spiral/Iteration

     lite
    l: Lite
    state l {
        s2l: Stage 2
        s34l: Stage 3&4
    }
    note left of l
        Low Risk
    end note
    s1 --> s2l
    s2l --> s34l: Gate 3
    s34l --> s5

Agile Stage Gate® Hybrid Model

model

Concepts

  • Stages
    •  Teams of people (core team)
    • Completing critical activities
    • Followed by analysis
    • Leading to an interim Decision
  • Gates
    • Between each stage
    • The team huddles
    • Review deliverables
    • Staffed by senior leaders
    • Make decision: Go/Kill/Hold/Recycle
  • Gate Reviews
    • Critical product and project characteristics reviewed
      • Progress to schedule
      • Product performance metrics
      • Projected product cost, margin, revenue, life-cycle costs
      • Development program budget and schedule
      • Important market, competition, and industry information
    • Make decisions
    • Successful Gate Reviews
      • Gates must have teeth! — Some project must be ended.
      • Provide a clear and consistent process for making major decisions.
      • Empower and provide resources for project team to execute the project
  • Gatekeepers
    • Key leaders
      • P&L Leader (GM or VP etc.)
      • Product Development
      • Manufacturing
      • Marketing and Sales
      • Finance
    • Activities
      • Ensure that products fit the company’s strategy
      • Review status of project activities versus commitments
      • Approve, Cancel or reprioritize projects for next stage
      • Allocate product development resources

Myths or Weaknesses?

  • Not a relay race with hand-offs (and dropped batons) between functions
  • Not a rigid set of rules …. It’s a roadmap with detours common
  • Not a linear process …..spirals and loops are critical
  • Not a project control system … although project management techniques are used when needed
  • Not more bureaucracy … not intended to generate unneeded paper
  • Not stagnant … Stage-Gate is constantly evolving

Stage 0: Idea Generation

  • Fundamental research (perhaps directed)
  • Voice of Customer (VOC) inputs
  • Competitive analysis
  • Internal brainstorming/ idea development
  • Open Innovation
  • Market disruptions (disruptive technologies)

Gate 1: Idea Screen

  • First decision to commit resources — Preliminary and tentative
  • Gentle screen with typical criterion
    • Is there strategic fit?
    • Is the market attractive?
    • Is the project technically feasible?
    • Are there any showstoppers?
  • Gatekeepers both business and technical
  • Commit to spend a little money for information

Stage 1: Scoping

  • Quick scoping of project
    • Preliminary technical assessment
    • Analyze market opportunity and strategic fit
    • Preliminary business assessment
  • Small team
    • Product champion
    • Marketing
    • Engineering/Technology
  • Short duration (10-20 person days)

Gate 2: Second Screen

  • Criterion similar to Gate 1 but more rigorous
  • Based on results of Stage 1
  • Includes “simple” assessment of financial return
  • Decision: Do we commit additional resources ($) for more in-depth analysis

Stage 2: Business Case

Critical homework!

  • Clearly defined product
  • Determine feasibility of development
  • Confirm Stage 1 estimates
    • Product costs
    • Selling price/revenue
    • Quality/reliability
    • Projected unit sales
    • Detailed project plan — resources, schedule, costs
    • Detailed financial analysis
  • Completed by cross-functional team… the Core Team

Gate 3: Go to Development

  • Review of all Stage 2 actions
  • Sign-off on product specifications and project definition
  • Approval of resource allocations and staffing
  • Last point to “kill, hold or redirect” project before major expenditures — The “money gate”

Stage 3: Development

  • Design the product
    • The “money phase”
    • Execute project plan… meet commitments
  • Includes concurrent engineering
    • Manufacturing/procurement
    • Quality
    • Environmental
    • Product marketing and launch plans
    • Customer service processes
  • Continuous customer feedback
    • Build-test-feedback-revise loops
    • Many spirals

Gate 4: Go to Testing

  • Stage 3 activities reviewed in detail
    • Quality of work
    • Is product consistent with definition approved at Gate 3?
  • Review of revised financial projections based on Stage 3 work
  • Review of current status of market, competitive offerings etc.
  • Decision to go to test

Stage 4: Testing and Evaluation

  • Validate product, production processes, customer acceptance and financials
    • In-house product tests
    • Field trials
    • Pilot production
    • Test market
    • Revised financials
  • Prepare for volume production

Gate 5: Go to Launch

  • Opens the door to commercialization
  • Focuses on test results from Stage 4
    • Are test results positive
    • Are launch and start-up operations solid
    • Are all commercial operations ready
  • Makes decision to produce and market product

Stage 5: Launch

  • Logistics pipeline is filled — Materials and products flow
  • Broad scale selling and production efforts — Market reaction to product benefits, price etc.
  • After sale support and follow-up — Feedback on product performance, market acceptance, product adjustments required etc.
  • Post Launch Review
    • Project ended
      • Typically 1 - 6 months post launch; Team disbanded
      • Product now part of “normal offerings”
    • Project and Product Performance Review
      • Revenues, project expenditures, product costs, profits and timing versus commitments
      • Strengths and weaknesses of project
      • Lessons learned
    • Project leader and team responsible
    • Sometimes two reviews
      • Right after launch
      • 12 to 18 months after launch

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