Does Stage-Gate Product Development still offer value?

For years, companies have been using the Stage-Gate Product Development process developed by Dr. Robert Cooper in the mid 1980’s. It was developed as a roadmap for conceiving, developing and launching new products. In my own career, Stage-Gate was the adopted norm and widely used by the Product Development teams at Steelcase, Allsteel etc. As software startups begin to explode onto the scene in the late 2000’s, many founders began adopting parts of Lean Product Development into their software development. This eventually evolved into what is known as Agile Development today. Today, many companies and consultants are encouraging a move away from the Stage-Gate process. So, does Stage-Gate Product Development still offer value?

What is Stage-Gate Product Development?

Stage-Gate, also known as Phase-Gate or Waterfall Product Development, is a Project Management technique that provides a road-map for new product development from idea to launch. Every Project is divided into distinct stages or phases, each separated by decision points or “Gates”.

Phases

New Product Development projects typically go through 5 phases –

Phase 1 – Scoping focuses on evaluating and understanding the Product-Market fit. Typically, teams research strengths and weaknesses of the product, its offering to the customers, the competition etc.

Phase 2 – Building the Business Case involves the company’s business rationale for developing the product and launching it. This phase usually involves setting the Product definition and requirements, evaluating legal and regulatory requirements, setting the conditions and criteria that define a project emergency. Usually, companies will also work on a detailed development and launch schedule and timeline in this phase.

Phase 3 – Development involves the execution of plans detailed in the previous 2 phases. The product’s design begins to be fleshed out through the development phase, including some early testing and customer validation. Development teams try to meet the various deadlines outlined in the project plan or timeline.

Phase 4 – Testing and Validation includes in-house testing, field testing of the developed product from Phase 3. In some companies, this manifests as just product testing, but other companies include Manufacturing Pilot-Runs as part of their Testing Phase. Some companies also choose to include a market test, where they validate their marketing plans. 

Phase 5 – Launch is the culmination of all previous gates with a final, validated product being launched into the market.

Many companies use a Phase 0 for Ideation and a Phase 6 called Post-Launch Review.

Gates

Gates follow every phase and are check-points where the information gathered over the preceding phase is reviewed by a team of managers, and critical go/kill and prioritization decisions are made on projects. They are intended to prune out the weaker projects, and also help cull product development pipelines from having too many projects. Gates must have clear and visible criteria, so tough decisions can be made objectively.

Pros of Stage-Gate

1. Provides a process road-map to follow
2. Brings discipline to a chaotic, ad-hoc process. If your company has no process today, then starting with Stage-Gate is a good way to bring discipline to your process before evolving into using Lean Product Development.
3. Increases the ratio of successful products launched due to the focus on understanding Product-Market fit and Business rational in Phases 1 and 2
4. Simple and visible, easy to follow
5. Cross-functional teams enhance teamwork
6. Gates act as Quality control check-points and prune out weak projects

Cons of Stage-Gate

1. Stage-Gate process forces teams to make decisions regarding products prematurely, especially during Phase 1. Teams tend to get locked into a set of product requirements, and then iterate themselves into a smaller and smaller box with few options to consider for risk reduction.
2. Gate Reviews tend to be staffed with Senior-level managers making the Go/Kill decisions, and they are usually not given the complete picture of the project.
3. Gate Reviews occur at the end of each Stage or Phase, after a lot of work has been completed. If the project gets killed, it is very demotivating for teams that put a lot of effort into developing the product thus far.
4. Because Information only moves on to the next Phase after each Gate Review, Phase-Gate tends to increase the batch-size of hand-off information, which is a huge waste from a Lean Product Development perspective. The best professors on their best days are only able to effectively communicate about 30% of their knowledge, so you can imagine the amount of information that gets lost, misunderstood or miscommunicated during the Hand-off.
5. Stage-Gate doesn’t allow for development cycle shortening activities like partial information information sharing, overlapping and Set-based engineering.
6. Stage-Gate does tend to kill innovation because it forces premature decisions at the Gates and most times, the only options to move forward are to continue or be killed.

So, in conclusion, I recommend that Stage-Gate be adopted as a first step by companies who have no current product development process, or by companies who really struggle with discipline and chaos. But after bringing the discipline into your process using Stage-Gate, begin evolving into using Lean Product Development process. At BDI, we have evolved into a hybrid of Stage-Gate and Lean Product Development, with the ultimate goal of phasing out Stage-Gate completely.