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Why the Stage Gate Process will Make You a Better Project Manager

Stage Gate Process

The Stage Gate Process gets too little 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.

A Stage Gate is also known by many other names:

  • Phase Gate (PMBOK 6th Edition)
  • Gateway (PRINCE2)
  • Boundary Gate (most pleasing expression of the metaphor)
  • Gate, or Toll-gate
  • Go / No-go Review (literal name)
  • Kill Point (severely deprecated by OnlinePMCourses)

In a Stage Gate process, you break your project into stages, or phases. Each stage ends with a gate. And the metaphor is simple: you don’t complete the 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.

Using the information you make available, they decide whether to:

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

In this article, we look at why a stage gate process will enhance your project management, and how to make it work.

PMI Talent Triangle - Technical Project Management

What is a Stage Gate Process?

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

  • It looks backwards 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.

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 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 of further in depth investigation

 

Definition of a Stage Gate

The Project Management Institute’s (PMI’s) PMBOK 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 modificatin, or to end a project or program.

 

The Association for Project Management’s (APM’s) Body of Knowledge 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.

 

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 yo need to hear.

Rally Point

Preparing for a Stage Gate provides a rallying point for your team that can be motivating and energising. 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.

nd, if the review finds things you need to put right, you can still be confident that the process has stopped you 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.
This 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?’
PRINCE2 and the UK Government refer 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.
PRINCE2 and the UK Government refer to Gate 1 – Business Justification.

Project Baseline (plan) Review

Here, we examine the plans and controls the project team has develop 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.
PRINCE2 and the UK Government refer 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.
PRINCE2 and the UK Government refer 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?’
PRINCE2 and the UK Government refer 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 needs to be independent of the day-to-day running of the project. And the more independent they 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 dfifferent 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 X 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 evidence and prepare questions.
  4. Stage Gate Review Meeting
    The Review Team meet to discuss evidence, and question the Project Manager and Project Sponsor
    … and maybe other key project team members
  5. Findings Report
    the Review Team prepares its findings report – maybe meeting to do so.
    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.

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 ofr 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:

  • withold 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 programme 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 their 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 process 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.

About the Author Mike Clayton

Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 13 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.

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