This is the sixth in a series of articles on how to implement and enhance a gate process. The series offers advice in the context of consumer products. This article is a summary of the first 5 Articles together with my 7 top tips.
Part 1: Common problems with Gate Process
Why a Gate Process?
The main application of gate process is the control of new product development and launch (“NPD”), and existing product development (“EPD”). Gate processes are used to achieve a number of objectives:
- Alignment of with business strategy.
- Project governance.
- Portfolio management.
- Other benefits, such as reduced time-to-market, more efficient and effective use of resources and increased likelihood of product success.
Issues to be Addressed
Issues that typically need to be addressed when existing gate process is ineffective, or when there is no gate process, include:
- Unclear strategy and policy;
- Responsibility, accountability and ownership of activities and deliverables;
- Effective portfolio and project review;
- Process quality;
- Control of activities according to project type, whilst maintaining consistency and standards;
- Systems to provide visibility and enable effective control in a non-bureaucratic manner;
- Adherence to process, ensuring appropriate use of resources and meeting deadlines.
Part 2: The first steps
Gate process v. project management
The main application of gate process is to control NPD and EPD. The gate process provides a template (or templates) for similar or repetitive projects. Besides controlling individual product developments, the purpose is to manage the product portfolio and the allocation of resources across product developments.
Dealing with the repetitive requirement does away with the need for other project management methodologies. Conventional methodologies (e.g. Prince2 or PMBOK) may still be used for one-off projects running outside the gate process. This works well if the one-off projects are not competing with NPD/EPD for resources; otherwise competing projects may be brought within the gate process.
Project management for gate process implementation
The design and implementation of the gate process itself may be conducted using project management methodology. Usually, formal project management can be relatively light.
Sponsorship and buy-in at senior level is going to be necessary because gate processes usually impact of nearly all functions within the business.
Mapping existing processes
Existing processes need to be mapped in sufficient detail to ensure that no essential deliverables are overlooked, which is always a risk. Use of sophisticated mapping techniques is not necessary.
A simple hierarchical business model can capture all the essentials:
– a list of activities,
– a list of outputs in approximate order they were created,
– the job title currently responsible for each activity/output.
Stakeholder engagement
First define the scope and context in order to gain senior management commitment to a plan. Start by involving just a few key people in the mapping of existing processes.
A great way of engaging other stakeholders is to develop a provisional model, then put this to wider groups of stakeholders for their contribution and to test the model.
Keep a log of issues raised, which the new process will need to address.
I have covered stakeholder engagement in projects and programmes in earlier article entitled “7 Essential Elements of Stakeholder Engagement”
The running order
For a first-time implementation of a gate process some clarification of the scope may be necessary but the intention to create an entire process already exists. In this case, regular Prince2 practice holds good: initiating the project with a PID, which is communicated to all stakeholders and signed off by the business sponsors. Mapping of existing product development processes would take place in the first phase of the project.
When enhancing an existing gate process, the scope (adjustments vs. redesign) may be less clear. Mapping existing processes will be helpful in exposing all the issues. It may make sense to do the mapping and even produce an outline design before formal project initiation. The PID then becomes the start of the detailed design and implementation phases.
Part 3: Designing the stages
Creating a flow model
Reflecting on creating a flow model raises a couple of questions:
Q1. Current or ‘to be’ model? Answer: ‘to be’.
Q2. Radical redesign or optimisation? Answer: it depends.
Review existing outputs and deliverables:
- Why do you want them, are they really necessary?
- Are any outputs not used as inputs later in the process, or not valued by users?
- Are there duplications?
- Are there changes that you would want to make?
- Can you simplify or combine them?
Then
- Remove superfluous outputs.
- Redesign flows to eliminate duplicated effort and competing activities.
- Reconcile new activities and outputs with existing.
Sometimes a fundamental review of activities is needed and then a reconstruction of the parent sub-processes. Sometimes it is possible to move activities, merging them with earlier or later sub-processes, which can result in the elimination of loops or have significantly beneficial effect on flow.
Determining the critical path
Activities likely to fall on the critical path need to be identified and their duration and time-dependency characteristics assessed.
Reducing the duration of specific activities, or moving them around to run more activities in parallel allows the overall duration to be reduced. The aim is to make the critical path as short as reasonably possible within the constraints of quality and acceptable risk.
When the critical path has been optimized the gates can be positioned.
Positioning the gates
Flow is really important for many food and fmcg products, where speed to market with new developments is crucial. The differing control requirements of branded, generic, customer branded, licensed or outsourced products may necessitate different sub-processes. These can influence the positioning of gates.
Common use of stage gate process has all activity coming to a stop pending approval at each gate. Delayed approvals then add directly to the overall duration.
By allowing critical path activities to run past the gates, approvals can float, improving flow. Activities must run to a gate where outputs require gatekeeper approval, or where dependent activities require prior authorisation. In practice there may be one or two long activities which, if run past the gates, could substantially reduce the overall project duration.
So positioning of gates need not follow convention. There may be substantial improvements in flow by judicious positioning.
Part 4: Designing and operating the gates
The purpose of gates: ‘innovation funnel’ or ‘pipeline’?
For food and fmcg products the primary purpose of the gate process is the early kill of weaker projects so that resources can be focused on those with the greater probability of success. In this context a funnel is more appropriate; only those projects most likely to succeed in the market and contribute to the achievement of business strategic objectives are allowed to progress.
Reluctance to kill projects causes gate processes to operate as a pipeline rather than a funnel, increasing the likelihood of failures.
Pursuing the right project: The Rules of Entry
The number of ideas going forwards can be filtered according to ‘Rules of Entry’, which reflect business and brand strategies.
A controlled number of projects will be released through Gate 1 according to their potential to deliver business benefit.
Once filtered by the Rules, ideas need to be evaluated and prioritised.
Project prioritisation
Before the product concept and project have been fully defined, any assessment is subjective. It is at this point (Gate 1) that the risk of dismissing good ideas is at its greatest.
A balance has to be found between the number of ideas released to Stage 1 (concept and project definition – requiring significant resource) and the number rejected without due consideration.
Once released, ideas can be subject to more rigorous scrutiny. Prioritisation can then be based on 7 criteria:
- Consumer appeal
- Category fit
- Brand strategy
- Business strategy
- Competitive environment
- Ease and speed of execution
- Scale of likely benefit
Consequently, Gate 2 is where the ruthless decisions need to be made. Gate 2 releases projects – only a limited number to be active at any time – ideally a balance between short and long-term projects.
Further release of projects will take place only as active projects are completed (products launched) or killed at subsequent gates. There is also the option to suspend active projects to make way for higher priority new projects, but this is not to be undertaken lightly otherwise agility and speed to market will be compromised.
The Gates
The precise positioning of the gates is going to be determined by the specific nature of the sub-processes and activities. As an example, gates for a food industry use would be as follows:
Gate 1 – Idea Acceptance
Gate 2 – Project Approval
Gate 3 – Business Case Approval
Gate 4 – Launch Approval
Gate 5 – Pre-Launch Review and Adjustments
Gate 6 – Post-Launch Review (Project Closure)
A benefits review may be held some months later to assess what benefits have been obtained.
The function, inputs and control objectives for each gate are summarised in the relevant earlier article.
Part 5: 12 Tips for fmcg and food industries
Specific fmcg and food industry gate process issues
There are a number of specific issues relevant particularly to fmcg and food industries which can result in excessive and avoidable development costs. Here are my tips on 12 things to look out for, and what to do about them:
1. Control responsibilities
Preferred practice is to have an independent change control function to oversee the projects portfolio and manage project managers.
2. Timing of decisions and approvals (and other deliverables)
– Pre-project fixing of launch dates leads to disappointments.
– Avoid delays to critical path activities and gate approvals.
– Review meetings should deal with exceptions, not routine gate approvals.
3. Specifications
Failure to lock specifications at an appropriate time can allow further unscheduled iterations in the design process.
4. Shelf life tests
Where shelf life testing is required, try to anticipate failures. Undertake parallel testing of possible variants where re-tests would impact on overall duration.
5. Bespoke materials
Early visibility of requirements, sourcing and negotiation of flexible commercial terms can reduce both development time and risk.
6. Packaging
Retail packs are usually bespoke and (together with some other packaging) need similar consideration to bespoke materials.
7. Design and reproduction
Lock the design before moving to repro, or risk costly rework.
Put a gate between the two to ensure compliance.
8. Product redundancy
Synchronize product run-down and launch. Demand management and supply chain agility are key elements of risk mitigation and cost controls.
9. Forecast inaccuracies
Opportunities to develop agile supply strategies may remain untapped. I have covered this at length in two articles on forecasting: The mess businesses get into and Products at risk, and managing inbound supply.
10. Systems
Critical requirements are as follows:
– Real-time visibility of status, i.e. deliverables completed.
– Templates for different product groups and project types (NPD, EPD).
– Electronic approvals to minimize delays pending approval.
11. Scheduling
Careful delineation of sub-processes allows three things to happen:
– Sub-processes can be functionally-led,
– Activities within sub-processes to be performed by close teams,
– Timelines can be tracked at sub-process level.
There is no scheduling within sub-process: responsible teams self-manage their workload.
12. Process metrics
Measuring sub-process compliance to timelines over a number of projects highlights problematic sub-processes and constraints.
7 Top Tips
- The key to achieving maximum throughput and speed to market is to focus the constraining resources on a limited number of active projects.
- The longer a bad project is pursued, the more investment in time, effort and cost, the bigger the psychological hurdle to overcome in killing it. So it is really important to be selective, especially in the early stages.
- Projects that meet minimum acceptance criteria, released because of a perceived launch deadline, fill the funnel with unnecessary noise and obstruct the progress of more profitable projects.
- Three timeline wreckers to be avoided:
(a) Waiting time for approvals when stage activities are completed.
(b) Long activities running to gates (no other activities running in parallel)
(c) Marketing U-turns for example on design and repro. - There is generally no need to create workflows for all activities within a Stage, even less within sub-processes. Devolve control to sub-process owners. (Suggested reading: Bob Marshall on the analogy of running restaurant kitchens.)
- Bureaucracy and delays can be eliminated by empowering stakeholders. Allow anybody to sign off any activity. First, deliverables have to be traceable, people need to know who are the relevant experts, and signatories know they will be held accountable.
- Improve processes by applying Theory of Constraints. Tagging deliverables with time and date stamp, and signature, allows traceability back to departments, functions or individuals so that constraints can be identified and investigated, and improvements made.
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Related Articles
7 Essential Elements of Stakeholder Engagement
A single shared forecast for the business… so what’s the problem?
Part 1: The mess businesses get into
Part 2: Products at risk, and managing inbound supply