What is Agile?

Agile is an iterative approach to project management and software development that helps teams deliver value to their customers faster and with fewer headaches. Instead of betting everything on a "big bang" launch, an agile team delivers work in small, but consumable, increments. Requirements, plans, and results are evaluated continuously so teams have a natural mechanism for responding to change quickly. 

Agile was introduced to deal with issues through adaptive planning, evolutionary delivery, a time-boxed iterative approach, and flexible response to change.

What is Agile Stage-Gate?

Agile Stage-Gate is a variation of Stage-Gate which combines the structure (phases and gates) of the classic Stage-Gate (the one we have been considering in this series) with the self-organized teams and short cycle iterations of Agile methodologies.

In practice, the project's stages, for example the Development stage, are broken into short time-boxed increments called sprints, each about 1-4 weeks long (the small circles in the diagram below).

Agile development methodologies have been widely employed in the software industry, where they have been found to yield positive results. But can these new methods, with their new tools such as sprints, scrums, burndown charts, and backlogs, really be integrated with the traditional and popular Stage-Gate approach and then applied to physical products? Initial but limited evidence suggests yes: Larger IT firms have already integrated Agile and Stage-Gate and gained the benefits of both approaches; and most recently, a handful of manufacturing firms have employed this Agile–Stage-Gate hybrid model for physical new products.

What are the differences between Agile Stage-Gate and Agile Methodologies?

The obvious and most visible difference between Agile Stage-Gate and regular Agile is that Agile Stage-Gate is part of a larger formalised process whereas Agile methodologies, by definition, advocate freeform organization.

But there are other, more subtle differences. One of these is that the concept of a “sprint” differs significantly in both approaches.

In traditional Agile methodology, the goal of a sprint is to release new products, product features, or wholescale product updates in a rapid-fire cadence (i.e. every two weeks). This contradicts the very nature of a more robust Stage-Gate process, as it does not leave enough time to get through all of the necessary stages and gates.

On the other hand, in Agile Stage-Gate, the sprints are more a matter of creating tangible deliverables at each stage — deliverables that key stakeholders and decision-makers can review, provide feedback on, and approve at various gates. The goal of each stage isn't a final product, per se, but, instead, a close-to-final deliverable that, once approved by the gatekeepers, allows the project to move forward to the next stage in the product development process.

What are the differences between Agile Stage-Gate and classic Stage-Gate?

While both approaches share many similarities and a common project management ethos, there are a few distinctive qualities that make Agile Stage-Gate unique, most notably:

1. Process: Project teams follow a traditional Scrum process, including daily Scrum meetings, a Scrum board, a spring backlog, burndown chart, and more.

2. Focus: Project teams are dedicated to one project only and typically all work together in a shared space. Whereas in a classic Stage-Gate process, it is not uncommon for teams to be appointed to several projects and distributed across different offices, cities, time zones, and beyond. Because speed is the core differentiator here, there is a clear and present need for an Agile Stage-Gate team to be squarely focused on the task at hand.

3. Plan: The project plan, often represented as a Gantt chart, is rarely defined in advance and, instead, takes shape as the project moves through the various sprints within a stage. For example, products are typically only 20% defined as they enter the Development stage (vs. 40-60% in classic Stage-Gate processes).

The pros and cons of Agile Stage-Gate

As we've said many times before, no two organization's Stage-Gate processes will necessarily look exactly alike. Sure, you may choose to “steal” a best practice that may have been implemented by another organization, but at the end of the day, whatever Stage-Gate process you implement, it will be specific to the needs of your business and the products you create.

Therefore, it should come as no surprise that Agile Stage-Gate comes with its very own advantages and disadvantages, too. Let's take a quick look.

Benefits of Agile Stage-Gate

• Improved design flexibility
• Increased ability to respond to real-time changes
• Boost in productivity, communication, and coordination across entire project team
• Higher overall team morale
• Better prioritization of projects tasks
• Reduced time-to-market by 30% (vs. classic Stage-Gate processes)

Drawbacks of Agile Stage-Gate

• Difficulty to secure dedicated team members focused on only one project
• Difficulty linking project teams to the organization as a whole
• Disconnect between Agile requirements and the company's reward system
• Perceived as still being too bureaucratic
• Lack of scalability for large projects with many interconnected sub-projects
• Hard to manage for distributed global teams 
• Too much time spent in meetings (vs. working)
• Sometimes challenging to secure management buy-in*

*This is either the result of someone's preference for another gating system or a common misconception that implementing Agile automatically implies abandoning Stage-Gate altogether. This is not the case whatsoever. Agile methods can be applied to Stage-Gate, creating a hybrid model that incorporates the best of both processes.)

Why Agile Stage-Gate works

In spite of these potential (or perceived) cons, there's a lot of evidence that Agile Stage-Gate works — and can work incredibly well for specific project types or specific project management processes. There are three key reasons for this:

1. Agile Stage-Gate drives innovation

Agile Stage-Gate deals well with uncertainty. This is because the rapid sprints through the stages allow teams to test and validate assumptions in real-time as the project progresses. Not only does this allow for a more natural evolution of the product development process — one based on experimentation vis-à-vis target customer expectations— but it also creates an ongoing feedback and iteration loop that celebrates both true innovation and a truly innovative spirit.

2. Agile Stage-Gate is highly adaptive

Agile Stage-Gate deals well with changing requirements. Because it's a more rapid approach to experimentation, testing, and development than a more classic Stage-Gate process, it allows teams to pinpoint potential issues or make critical changes early on. Its general flexibility also makes it easier for teams to pivot quickly at any stage in the process, which can reduce overall resource strain and minimize costs.

3. Agile Stage-Gate accelerates development

Agile Stage-Gate deals well with giving teams focus. As mentioned earlier, because teams here are assigned to one project only, they are able to accelerate development, maintain momentum, and respond to changes in ways that more distributed teams or teams spread across multiple projects simply can't. And since they work face-to-face through the duration of a project — typically altogether in the same working space — they are able to improve and speed up the lines of communication (i.e. no more waiting on team members to respond to emails).

The Future of Stage-Gate Hybrid

Combining Agile project methods, such as Scrum, with Stage-Gate® has the potential to yield more productive and faster product and service innovation. Agile-Stage-Gate® gets the product right via multiple, early customer-validations; it deals with uncertainty and ambiguity regarding what the product solution might be; it focuses project teams on the one project, thus accelerating projects; and it fosters much stronger team morale. Examples of early adopters of this new system are appearing around the world where companies successfully bring these two models together – a hybrid approach which delivers the best of each model –  for innovation for both digital solutions, physical products and service products.

These are early days however. And more evidence and experience-based results are required – results evaluated in terms of objective measures such as development times-to-market and new-product success-rates. Moreover, there remain a number of inconsistencies and paradoxes that early adopters are still working out, especially in the world of manufactured products, and where outside expert help might be needed.²¹ Nonetheless, early results are very promising, sufficiently so that any firm seeking improved product development performance should investigate and consider these new Agile-Stage-Gate hybrid methods.

Conclusion

The early evidence is encouraging. Lead users of this new hybrid system are enthusiastic. In all the cases we’ve studied, the companies have expanded their use of the hybrid model, which speaks for the results it has delivered.

The resounding advice from the business' leaders at Danfoss, one of the firms we’ve studied, is simple: “Just try it!” Set up a small task force, figure out roughly how the new system will operate, and work out how you will deal
with the tough issues, some of which have been outlined above.  

But in the Agile tradition, don’t try to get all the answers before you start: Begin with several selected pilot projects, provide coaching, monitor closely, and adjust as the projects move along.