How to Implement and Enhance a Gate Process – Part 1

Common problems with Gate Process

This is the first of a series of articles on how to implement and enhance a gate process. I shall be highlighting some of the issues associated with the introduction and operation of a gate processes, and to offer some advice in the context of consumer products.

One of the reasons for writing this series is that much of the literature seems to be more aligned to engineering and technology products than to my interests, which are primarily food and fast-moving consumer goods.

A Brief History

According to Wikipedia the origins of the gate process go back to the control of phased development and investment in chemical engineering in the 1940’s. Other industries with complex products and projects subsequently picked up on the process to control their product development. In the mid-1980’s Robert G. Cooper developed a version called the Stage–Gate model which figures highly in the search engine rankings and has become the de-facto standard, although there are other variants and names in use (e.g. phase-gate process, innovation funnel ). I shall refer to the process simply as ‘gate process’. To be clear, I am concerned with the application of gate process as a key element of product portfolio management,  and the process between gates (the stages) as well as the gates themselves.

My first involvement in gate process was in corporate life 20 years ago in a UK blue-chip company, when our main board decided that the businesses were exposed to substantial costs and risks that fell outside the scope of the existing governance on capital investment. I became involved in the design and implementation of a new gate process led by one of the Big 4 consultancies. Subsequently, as a consultant, I have advised a good number of businesses that operate various forms of portfolio management and change control with gate processes (and a good number without). And I have witnessed a wide variety of problems and issues, which I would like to share. There is a contrarian view, that the gate process stifles innovation and limits the development of ground-breaking products. I am not going to comment on that, at least, not yet!

Why a Gate Process?

The reasons for implementing a gate process and portfolio management is covered in detail by Dr Robert Cooper and Dr Scott Edgett, which I paraphrase in summary below. In my view, there is a strong connection in the sense that management decisions at the gates are largely dictated by the goals of portfolio management.

1. Alignment with business strategy

  • i.e. new product development and other changes

2. Project governance

  • investment and resources approval
  • define deliverables and performance criteria
  • assure quality of process execution and outputs

3. Portfolio management

  • restrict projects to the resources available
  • achieve desired balance in terms of risk/return, lifecycle, timescales
  • maximize value from investment and available resources

4. Other benefits, which may include:

  • Reduced time-to-market
  • Increased likelihood of product success
  • Improved discipline over a complex and potentially chaotic process
  • Reduced re-work efforts
  • Efficient and effective allocation of scarce resources

Issues to be Addressed

In my experience, the  of working with gate processes the following issues are frequently encountered.

Strategy and Policy

  • Unclear strategy
  • Absence of ‘big’ rules at the front end to ensure strategic focus
  • No prioritization
  • The process is run as a pipeline rather than a funnel
  • Lack of effective control over the portfolio

Responsibility, Accountability and Ownership

  • Lack of buy-in by key stakeholders
  • Lack of ownership
  • Lack of project management
  • Project management is not impartial
  • Roles and responsibilities (both individually and throughout) are not understood
  • Too many sponsors
  • Too many ad-hoc project managers
  • No end-to-end responsibility for individual projects (projects run like a relay race)

Portfolio/Project Review Meetings

  • Wrong chairperson
  • Management communication and control bottlenecks
  • Lack of preparation by executive decision makers/ gate keepers
  • Routine sign-offs waiting for scheduled review meetings
  • Review meetings not focusing on exceptions
  • Indecisiveness/projects held up
  • The wrong projects are selected
  • Reluctance to kill projects
  • Poor go/kill decisions
  • No prioritization

Process Quality

  • Launch dates set before feasibility is assessed
  • Unrealistic or unachievable timelines
  • Processes not embedded
  • Objectives not clear (including what needs to be done when rework is required)
  • Authorization requirements and  authorities not clear
  • Gate criteria not clear
  • Recommendations (for decisions) unclear or non-existent
  • No clear closure

Tasks/Activities

  • Different process requirements of different projects/products
  • No defined activities or checklists
  • Lack of consistency
  • Excessive rework
  • Late amendments and changes

Systems

  • Poor visibility of project status and progress
  • Poor quality of data
  • Poor documentation
  • Inadequate tracking of task completion and sign-off
  • Failure to provide different templates for different project/product types
  • Systems not supporting electronic approvals

Adherence to Process

  • Use of inappropriate resources
  • Lack of recognition of critical path
  • Missed deadlines
  • Activities being performed out-of-sequence (including wrong side of gate)
  • Unofficial projects (outside formal process)

The absence of any of the above issues suggests that an existing gate process is being operated very effectively (or, if one does not exist, then it is not necessary!)  Where none exists, the implementation of a gate process will not necessarily solve these problems. In fact all of the issues have been recorded where gate processes are already operating. In such instances, the presence of a significant number of these issues would be symptomatic of a badly designed or badly implemented process.

In my next article I will consider the first steps in setting up gate process, or sorting out one that has significant issues.

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