Understanding the Stage Gate Process in Product Development

Chances are you’ve heard of the "stage gate process" as a process teams can pursue for effectively developing and building new products. While it’s a proven methodology that has been used by many successful companies to bring innovative products to market, it is a more traditional, rigid model that isn’t often applied in lean, startup environments. That said, the stage gate process still has its benefits and in this article, we'll take a deep dive into understanding the stage gate process, its benefits, structure and some examples.

What is the Stage Gate Process?

The stage gate process is a product development methodology that involves breaking down the product development process into different phases called “stages”. Each stage is designed to assess a particular aspect of the product development process and determine whether it's ready to move onto the next ‘stage’ or ‘gate’. The goal is often to provide a clear and easy-to-follow plan for identifying and eliminating any potential problems early on in the development process. The ultimate aim is to minimize the risk of failure and ensure that the final product meets customer needs.

When does it make sense to use the Stage Gate Process?

In and of itself, the stage gate process might not be the right approach for every team. Given its structured nature, it is appealing to larger, more rigid organizations where checks and balances need to be systematically applied to the product development process. That said, all product teams can take away some of the principles and core ideas behind the stage gate process, most notably the importance of spotting issues early on before they compound.

Some scenarios where teams might want to explore the stage gate process include:

• Companies where many different products are in development with different goals, teams, specs and resources allocated to the,
• Companies where products require collaboration and input from several internal and external stakeholders and departments, especially when siloes and obstacles may be present.
• Companies developing complex products with many technical specs and a high level of uncertainty and risk.

The 5 stages in the Stage Gate Process

As the name implies, the stage gate process has a very clear step-by-step structure. Below are the steps that are usually involved in the stage gate process:

Stage 0 - Idea Generation: This is the prelude to the process where ideas for new products are generated. This is where your product discovery efforts come into play as you aim to ideate around the customer problems you need to be solving. This stage usually involves brainstorming sessions, user interviews, customer feedback, and market research.

Stage 1 - Scoping: Once you have outlined the ideas, This stage involves assessing the feasibility of the idea and determining whether it aligns with the company's overall goals. The inputs for this stage include a high-level business case, initial market research, and competitive analysis. The criteria for this gate may include assessing the market potential, customer needs, and company resources. The output of this stage is a scoping document that outlines the project goals, timeline, and budget.

Stage 2 - Building a Business Case: This stage involves developing a more detailed business case that includes a thorough market analysis, financial projections, and an assessment of the project's feasibility. The inputs for this stage include a detailed market analysis, customer feedback, and a project plan. The criteria for this gate may include assessing the financial viability of the project, the technical feasibility, and the alignment with the company's overall strategy. The output of this stage is a business case that outlines the project's goals, risks, and potential outcomes.

Stage 3 - Development: This stage involves the actual development of the product. The inputs for this stage include detailed product requirements, a project plan, and a development team. The criteria for this gate may include assessing the quality of the product, the development timeline, and the resource requirements. The output of this stage is a fully functional prototype of the product.

Stage 4 - Testing and Validation: This stage involves testing the product to ensure that it meets customer needs and is ready for market. The inputs for this stage include customer feedback, testing results, and a finalized product design. The criteria for this gate may include assessing the product's performance, its market fit, and the potential risks associated with launching the product. The output of this stage is a validated product that is ready for market.

Stage 5 - Launch: This stage involves launching the product into the market. The inputs for this stage include a marketing plan, sales strategy, and a launch timeline. The key to any launch is to continue learning and funneling the launch feedback back into your discovery process so that you can iterate and build upon the launched product when and where needed.. 

‍The structure of gates in the Stage Gate Process 

The stage gate process consists of three main elements: inputs, criteria, and outputs:

• Inputs: Refer to the information that is needed to determine whether a project should proceed to the next stage. This can include market research, customer feedback, and financial projections. 
• Criteria: Refer to the specific standards that a project must meet to advance to the next stage. This can include factors such as cost, market potential, and technical feasibility. 
• Outputs: Refer to the deliverables of each gate, such as a go/no-go decision, a revised project plan, or additional resources needed. 

These three elements work together to ensure that projects are evaluated thoroughly at each stage and that the organization is making informed decisions about which projects to pursue.

Advantages and disadvantages of the stage gate process

Applying the stage gate process in a strict way may not be right for many product teams. To assess what elements of this process are worth adopting, it’s important to look over the advantages and disadvantages of the stage gate process.

Advantages:

• Improved risk management: The stage gate process allows for better risk management by breaking down the development process into stages. This reduces the likelihood of costly mistakes and ensures that everyone is on the same page.

• Better collaboration: The stage gate process requires collaboration between stakeholders, which helps ensure that everyone is working towards the same objectives.

• Improved decision making: The stage gate process provides a structured framework for decision making, which ensures that decisions are made based on data and objective criteria.

Disadvantages:

• Time-consuming: The stage gate process can be time-consuming, requiring significant effort and resources to evaluate each project at every stage. This can lead to delays in bringing new products and services to market, and the extensive documentation required can result in a bureaucratic approach that stifles innovation and creativity.‍
• Lack of creativity: What the stage gate process brings in structure and planning, it loses in creativity. Innovating and building new products is not a linear process. It is often messy, and that’s not a bad thing because it allows for creative iteration on your ideas.. Finding the balance between structure and creativity is an important challenge‍

• Limited discovery: Traditionally, The stage gate process is very solutions-oriented. Though time is spent understanding the target audience, ideating and prioritizing, it can quickly become too rigid a process for thoroughly understanding the opportunity / problem space. Discovery principles can be applied throughout the process but it is always a risk that real discovery becomes stifled by the rigid step-by-step nature of the stage gate process. 

Conclusion

The Stage Gate Process is a well-established methodology for managing the development of new products and services. It is a structured approach that provides a framework for organizations to evaluate new ideas and concepts, and make informed decisions about which projects to pursue. While it might not be the leanest way to build products, there are elements from this process that teams can use to create structure, implement checks and balances and make sure discovery and delivery are well-aligned.