How the Stage Gate Process Will Make You a Better Project Manager

The Stage Gate Process doesn’t get enough love from Project Managers. Yet it has the potential to:

• Transform your project management
• Deliver more successful projects, and
• Make you a better project manager

In a Stage Gate or Phase Gate process, you break your project into stages, or phases. Each stage ends with a gate. And the metaphor is simple:

You can’t complete a stage, and cross to the next one, until you pass through the gate.

So, at each stage gate, the project’s decision-makers review your project against a set of criteria.

Stage Gates are about Project Governance

Therefore, the Stage Gate process is a valuable part of project governance. It is a way to ensure that your project delivers what it should, in a proper manner. And it allows decision-makers to stop the project if it is not doing so.

Using the information you make available in the Stage Gate process, they decide whether to:

• Continue the project to its next stage
• Repeat work (stay in the stage), for resubmission to a further Stage Gate Review
• Stop the project
• Require changes before it proceeds
• Place the project on hold (very rarely)

This Article

In this article, we look at why a stage gate process will enhance your Project Management, and how to make it work. The sections are:

• What is a Stage Gate Process
• Why are Stage Gate Reviews Valuable?
• When to Hold a Stage Gate Review
• Who Should Conduct a Stage Gate Review?
• How to Conduct a Stage Gate Review
• Phase Gates in Agile?

What is a Stage Gate Process?

The Stage Gate Process examines your projects at key decision points in its lifecycle. It is an important part of project governance that looks both backward and forwards.

• It looks backward to provide assurance that the work of the preceding stage has been completed to the necessary standards
• And it looks ahead, to determine whether the project can and should progress to the next stage

The Stage Gate Process is often a mandatory part of large Governmental projects in many countries. It is also best practice commercial and voluntary sector projects. As you’d expect, the stage gate process is principally used in traditional (or ‘waterfall’) projects. because, in these, the whole project is divided into stages.

We’ll examine the case for applying the stage gate principle to Agile projects towards the end of this article.

A Short Video Introduction

Rigorous Stage Gate Review

A Stage Gate Review is a process for achieving a robust Go/No-go decision. By robust, we mean it needs to be auditable. So, it must:

• Follow a set process
• Examine a specific set of evidence and data
• Apply a set of pre-set criteria
• Be carried out by suitably qualified, trained, or experienced executives or professionals; the Stage Gate Review Team

So, each Stage Gate Review provides an independent (of the project team) confirmation of your project’s health and the continued case for support. The emphasis of the Stage Gate Review is on:

• The extent to which the project has met its objectives for the preceding stage
• The rigor of your plans for the next stage
• The risks and benefits associated with moving to the next stage

Outcome of the Stage Gate Review

The results of the Stage Gate Review Team’s assessment can be:

• Advisory for the project board or sponsor
• Mandatory upon the project
• The trigger for releasing or withholding project funding
• A basis for further in-depth investigation

Definition of a Stage Gate

The Project Management Institute

The Project Management Institute’s (PMI’s) PMBOK Guide 6th Edition:

Phase Gate:
A review at the end of a phase in which a decision is made to continue to the next phase, to continue with modification, or to end a project or program.

A Guide to the Project Management Body of Knowledge (6th Edition)
Project Management Institute

The European Commission’s PM² Alliance

The European Commission’s Project management Methodology uses the term Phase Gate abnd defines them as:

Phase Gates are approval gates during the project lifecycle:

– Ready for Planning
– Ready for Executing
– Ready for Closing

They ensure good governance, making sure that project teams seek approval before moving on to the next phase.

Project Management Methodology – Guide 3.0
European Commission PM² Alliance

The Association for Project Management

The Association for Project Management’s (APM’s) Body of Knowledge (6th Edition) defines:

Gate:
The point between phases, gates and/or tranches where a go/no go decision can be made about the remainder of the work.

APM Body of Knowledge (6th Edition)
Association for Project Management

And the 7th edition of the Association for Project Management’s (APM’s) Body of Knowledge defines:

Decision Gate:
A point in the life cycle between phases that is used to review and confirm viability of the work in line with the business case.

APM Body of Knowledge (7th Edition)
Association for Project Management

PRINCE2

PRINCE2 uses a new term, which is different from earlier UK Government terminology. Two things I like about this definition are the:

1. flexibility to make the review formal or informal and
2. clarity that, whichever approach you take, you should document the review’s outcome.

It defines:

End Stage Asessment:
The review by the Project Board and Project Manager of the End Stage Report to decide whether to approve the next stage plan. Depending on the size and criticality of the project, the review may be formal or informal. The authority to proceed should be documented as a formal record.

End Stage Report
A report given by the project manager to the project board at the end of each management stage of the project. This provides information about the project’s performance during the manageent stage and the project status at the management stage end.

Managing Successful Projects with PRINCE2 (2017 Edition)
Axelos

OnlinePMCourses

And finally, OnlinePMCourses’s own free Project Management glossary, ‘Decode the Jargon of Project Management‘ defines:

Stage Boundary:
Stages are separated by stage boundaries, also known as stage gates, gates or gateways.  These are review points where we make go or no-go decisions based on how the project is performing and the value we will get from our further investment.

Gateway Review:
A formal review – usually conducted by objective reviewers from outside the project – that takes place at Stage Boundaries, or Gateways.

The Origin of Stage Gates

According to Bernice Rocque and Walter Viali, Stage Gate reviews started at Corning, Inc. There, product managers created a five-stage process in 1986, which they called their ‘stage-gate innovation’. Then, in 1991, a senior Corning IT executive borrowed the process and moved it to a project environment. And the results were successful.

Why are Stage Gate Reviews Valuable?

Let’s set aside the very important governance imperative. This says that we need oversight, transparency, and accountability as a part of our project process. Clearly, a stage gate process contributes to this.

But what if governance were unimportant to you… or your organization?

The Stage Gate process can benefit your project and enhance your project management in ways beyond accountability and transparency. Here are my top five ways that it can make you a better project manager.

Second Look

Preparing for a gateway review compels you to gather evidence, review it, and prepare for scrutiny. The effect is that you take time to look below the surface of your project, and challenge your own intuitions about what is happening.

At its best, this is a bottom-up examination of the facts. But, it will go far deeper than you will ever go during your regular reporting cycle. It offers a real opportunity to spot un-noticed trends or issues.

Objective Observation

And of course, it isn’t just you who will be studying this evidence closely. The value of fresh eyes is enormous. And fresh eyes that have no stake in your project, other than to see it succeed are doubly valuable. This is especially because they will have no stake in past decisions. So, they’ll be able to ask the probing questions you need to hear.

Rally Point

Preparing for a Stage Gate provides a rallying point for your team that can be motivating and energizing. It is a focus to work to, with clear requirements for everyone. And a rigorous review process will mean that the definition of ‘ready for review’ will be unambiguous. When you reach the point, it also offers a breathing space for your team colleagues.

Confidence

Going through a phase review gives you and your team confidence. Confidence that you have done right, and will be doing right in going forward.

And, if the review finds things you need to put right, you can still be confident that the process has stopped you from compounding errors or making new mistakes.

Deliberate Pause

For me, the most important single reason for holding a stage gate review is that it breaks the ‘I’ve started, so I’ll finish’ trigger.

Projects get a momentum of their own. Even when they run into a serious problem, the team’s instinct is to solve it and drive through. But what if the solution destroys the business case? And, while you are working on a project stage, what if external circumstances change? And what if that change itself undermines your business case?

Too many projects start life as a positively beneficial venture, but end life stuffed in a cupboard and forgotten, because they are not needed. If only there had been a mechanism to stop them as soon as the business case started to look shaky. A stage gate review provides that mechanism.

When to Hold a Stage Gate Review

The simple answer to this is: ‘at the end of each stage’. Part of your role as a project manager is to determine how many stages you need to create. Select stages to give you maximum control of your project. That said, there are some obvious models. A typical generic model may look like this:

Project Selection Review

This is right at the start of your project and assesses whether the project idea is a sound strategic fit.

It can also come after the project has been selected and focus on the detail of the project definition. We ask the question: ‘does this project make good business sense?’

The UK Government refers to Gate 0 – Strategic Assessment.

Project Business Case Review

Once the project team has defined the project, the next step is to develop a business case.

The UK Government refers to Gate 1 – Business Justification.

Project Baseline (plan) Review

Here, we examine the plans and controls the project team has developed to test their rigor and answer the question: ‘how confident are we that the team can deliver the project to the schedule, budget, and specification in the business case?’

This review can be combined with the previous review, to answer the question: ‘should we invest?’. Or that can come at a subsequent stage gate review.

The UK Government refers to Gate 2 – Delivery Strategy.

Design Review

This is the final assessment of whether the project design will meet the need that the business case describes.

The UK Government refers to Gate 3 – Investment Decision.

Operational Readiness Review

At the end of the delivery stage of your project, all of the testing is complete. Now, the final sign-off is a stage gate review that assesses whether the final project products, or deliverables, meet specification. We ask the question: ‘Are they fit for purpose?’

The UK Government refers to Gate 4 – Readiness for Service Review.

Post Project Review

PRINCE2 and the UK Government has a final gateway review, between 6 and 18 months after handover of the completed project. This has the purpose of assessing the delivery of benefits in an operational environment.

It is called Gate 5 – Benefits Realisation and Operational Review.

Who Should Conduct a Stage Gate Review?

The Stage Gate review needs to be independent of the day-to-day running of the project. And the more independent the reviewers are, the more rigorous their scrutiny is likely to be. They can be:

• Executives from within your organization
• Senior project and program professionals from within your organization
• Senior PMO staff
• Executives or professionals from a different division in your organization
• Executives or professionals from outside of your organization

What is critical is that they have sufficient experience, and maybe training, to conduct an effective review. They also need to have sufficient time available.

How to Conduct a Stage Gate Review

Every organization will develop its own Stage Gate process. However, a typical generic process might have the following 5 steps:

1. Establishment
   The Review Team is set up and adopts its terms of reference.
   Dates for reviews agreed with Project Manager.
2. Planning Meeting
   The Review Team meets to plan its review and refresh members on the state of the project so far (excepting first review).
3. Evidence Submission
   Project Manager submits evidence for review.
   The Review Team independently review the evidence and prepare questions.
4. Stage Gate Review Meeting
   The Review Team meet to discuss the evidence, and question the Project Manager and Project Sponsor
   … and maybe other key project team members
5. Findings Report
   The Review Team prepares the report of its findings – maybe meeting to do so.
   Then, the Review Team issues its report to the Project Sponsor and Project Manager. There may be an opportunity for comments and revision of a draft report.

Following these stages, the Project Sponsor and Project Manager would meet to discuss the appropriate next steps. If everything has gone well, these will be to proceed with the next project stage, as planned.

How to Run an Effective Stage Gate Review | Video

Before looking at the detailed Stage Gate Review Process below, you may like to take a look at this video…

Detailed Stage Gate Review Process

The primary objective of a Stage Gate Review is to determine whether a project should continue to the next stage (Go) or not (No-go).In doing this, the Stage Gate Review Team will look both ‘backwards’ and ‘forwards’.

Looking Backwards

The purpose here is to ensure all products/deliverables that the team planned for the stage, are complete, and meet their specifications and quality standards. The review team will compare progress to formal documents, such as:

• Project Mandate / Project Definition / Terms of Reference
• Business Case
• Project Plan
• Product Breakdown Structure and Specifications
• Quality Plan
• Benefits Management Plan

The desired outcome from this part of the review is: Approval of current stage as complete. However, the Review Team may require the project to re-visit or complete certain work.

Looking Forwards

Here, the purpose is to assess the continuing viability and desirability of project. The team will pay specific regard to:

• what the project team has learned in the preceding phase, which may support or undermine the plans and business case
• external changes that may impact the project and its business case. Examples include changes to:
  • Client or customer requirements
  • Internal organizational politics
  • Financial or resource constraints
  • Commercial situation
  • Technology capabilities
  • Legislation, regulation, external standards, or organizational policies
  • Safety or security concerns

The desired outcome from this part of the review is: ‘Authorization for proceeding to next stage’. However, the Review Team may:

• withhold approval, or
• make its approval conditional upon certain actions or changes to the plan.

Additional Objectives

There is also a subsidiary objective from a Stage Gate Review; to extract lessons that the team can draw from work so far, which they need to apply to future work.

Stage Gate Evaluation Checklist

UK Infrastructure and Projects Authority

The UK Infrastructure and Projects Authority (IPA) oversees major projects in the UK Public Sector. Its origin is with the now-defunct Office of Government Commerce (OGC). The OGC  developed a sophisticated Gateway Review Process and introduced it across Central Government at the start of 2001.

The documentation that IPA offers is perhaps the most thorough guide to a Stage Gate Process. You will find a wealth of exceptional material (all at no cost) in their Assurance Review Toolkit. I particularly recommend the six OGC Gateway Review Guidance and Templates documents, which refer to the review stages 0 to 5.

Gateway reviews are carried out by a team of experienced professionals, who are independent of the project or program team. They are selected from a pool of accredited reviewers who all have relevant project, governance, functional, and sector skills. All reviewers have to go through training and an accreditation process.

Gateway Reviews can take from 2 to 4 days, with a review team of 3 or 4 people. Teams are chosen to meet the needs of the project or program under review. The review team produces a report that gives its overall assessment, findings, and recommendations.

Phase Gates in Agile?

The Stage Gate process comes from the world of New Product Development. And let’s not forget that this is where the idea of Scrum has its origins too.

There are two ways to look at the idea of stage gates within an Agile context.

1. Stage Gates are Baked-in

It’s easy to argue that Agile processes already have the idea of gates built-in. You may call them criteria, definitions of done, or minimum viable products. The end of each sprint exposes the work done to the gate criteria.

However, many Agilists may argue that Agile gates differ from the stage gates of a traditional waterfall process. This is because the stage gate review process we’ve seen above does not provide a direct benefit to the customer. Agile is concerned that everything we do must be directed towards delivering a working feature. It has little time for activities that are solely designed to advance the project.

In response, I’d make two principal points:

1. Validating that everything has been done, and meets pre-agreed criteria does indeed benefit the customer
2. The organization that is providing the funding (and bearing the risk) is also a stakeholder, and a process that looks after its interests is entirely reasonable.

2. Agile within Stages or Phases

In the language of traditional project management, we can see that Agile methodologies work best in the Development and Testing Stages of a project. The project stages at either side of this central phase can still benefit from a Stage Gate Process. That is:

• Selecting a Project
• Generating a Business case
• Selecting a Methodology and team
• Reviewing benefits and operational effectiveness, after full implementation

What is Your experience of the Stage Gate Process?

We’d love to hear about your experiences, ideas, and questions. Please leave them in the comments section below, and we’ll respond to every contribution.

Learn more about Project Governance

Gateway processes are a part of Project Governance. Here is some great content, if you want to go broader in your understanding of governance:

• What is Project Governance? | Video
• What has Project Governance Ever Done for Us? [Ans: A Lot]
• 5 Project Governance Tips | Video
• Agony Angels: Setting up Project Governance – with Rich Maltzman