Phased development with gate reviews has delivered many benefits to product development organizations. This process ensures business perspective is incorporated into product development. Gate reviews are generally led by senior managers. Their engagement drives organizational consensus and resource commitment. Gate reviews also guide the organization away from risky endeavors by focusing on predictability and return on investment.
However, stage gate process also introduces some challenges. This process is only applicable to large new product development efforts because of the additional overhead and required senior management time commitment. The gate review process is hard to implement on small sustaining engineering projects where the goal is fixing some issues or improving manufacturability. It is hard to apply this process to small technology development, advanced R&D or disruptive innovation projects. In many organization this means that small projects do not follow any consistent process. Hence managers loose visibility and control over the entire portfolio.
The stage gate process can be seen as waterfall model. This model assumes customer needs and functional requirements are completely known before development is started. For products with long development cycles or in rapidly changing markets, stage gates introduce many challenges:
- Difficulty adapting to changing market needs
- Limited business/marketing visibility into development
- Late or uncoordinated requirements changes
- Surprise issues and unexpected risks
- Disconnected test plans and expensive testing
More importantly, this model reduces experimentation and prevents disruptive innovations from getting to market. As Clayton Christensen pointed out:
“The Stage-Gate system assumes that the proposed strategy is the right strategy; the problem is that except in the case of incremental innovations, the right strategy cannot be completely known in advance. The Stage-Gate system is not suited to the task of assessing innovations whose purpose is to build new growth businesses, but most companies continue to follow it simply because they see no alternative.”
So what is the solution? Implement Agile Development..,