Híbridos Agile–Stage-Gate

La Nueva Etapa del Desarrollo de Productos

Amalgamar métodos Agile con el modelo Stage-Gate puede dar flexibilidad, velocidad y comunicación mejorada en el desarrollo de nuevos productos. Robert G. Cooper

SINOPSIS: Las empresas líderes están comenzando a integrar elementos del método de desarrollo de software Agile en sus procesos de Stage-Gate tradicionales para el desarrollo de productos físicos. La tendencia comenzó primero en la industria de Tecnologías de la Información (TI), donde se encontró que los métodos Agile y Stage-Gate se complementaban entre sí, y solo recientemente se ha visto en las empresas manufactureras. Los beneficios del modelo híbrido incluyen lanzamientos de productos mucho más rápidos, mejor respuesta a los cambiantes requisitos de los clientes y mejor comunicación y moral en el equipo. Pero se requieren algunas modificaciones al método Agile para productos físicos. Se dan dos ejemplos de mejores prácticas de grandes empresas para ilustrar cómo ejecutar un modelo híbrido.

Si desea descargar este artículo en PDF, haga click aquí Some months ago, I facilitated a heated meeting between software and hardware developers in a large US instrument firm whose products included both hardware and software components. The question was, for the development of the software component, can or should Agile development methods—developed for software projects—and Stage- Gate1—developed for hardware projects—be used together or only separately? But more: can or should hardware devel- opers employ aspects of Agile, for example, the sprints and scrums that are central to the Agile-Scrum method? In other words, are the two approaches complementary or mutually exclusive? Can Agile be integrated with a traditional stage-and-gate model? And can the resulting hybrid model also be used for the development of physical products? Agile was created in response to the particular problems facing software developers; in this context, its relevance in instances where a firm’s products include both hardware and software and the two development efforts must be integrated, is clear. In these cases, a hybrid Agile–Stage-Gate approach can both respond to the specific needs of each component of the product and help integrate the two efforts. Moreover, Agile methods promised to improve speed to market and increase development productivity, something that all hardware developers strive for. As they face increas- ingly fluid markets, where nothing is stable for long, manufacturers have also begun looking at development methods that are more adaptive, allowing for faster response to changing customer requirements. Some manufacturers, struggling with these challenges, found Agile quite attractive. But Agile alone isn’t sufficient to support new product devel- opment for manufacturers. As a result, some manufacturers of products from food to machinery are turning to hybrid development processes that integrate Agile with Stage-Gate, even when no IT development is involved. And some of these early adopters are finding that the benefits of adopting a hybrid Agile–Stage-Gate approach can be significant.  

The Evolution of Agile

Agile software development is a group of software develop- ment methodologies based on iterative and incremental process in which requirements and solutions evolve through collaboration between self-organizing, cross- functional teams (Beck et al. 2001). When Agile emerged in the late 1990s and early 2000s, its methods were seen as the solution to many problems in IT development that traditional waterfall or gating development processes could not deal with (Reagan 2012). _________________________________________________________________________________________

1 Stage-Gate is the registered trademark of R. G. Cooper and Associates, Inc., in Europe and Canada and of Stage-Gate International in the United States.

Robert G. Cooper is president of the Product Development Institute. He is ISBM Distinguished Research Fellow at Penn State University’s Smeal Col- lege of Business Administration and a Crawford Fellow of the Product Development and Management Association. A thought leader in the field of product innovation management and developer of the Stage-Gate new product development system, he has won two IRI Maurice Holland awards and has published 7 books and more than 120 articles. He received his PhD in business administration from the University of Western Ontario and Bachelor’s and Master’s degrees in chemical engineering from McGill University. [email protected] DOI: 10.1080/08956308.2016.1117317 Copyright © 2016, Industrial Research Institute. Published by Taylor & Francis. All rights reserved. Stage-Gate is a macroplanning process and Agile is a microplanning project management methodology. These traditional processes tend to focus on a big, long-  term goal—a final product and its major features. But requirements tend to change rapidly in IT projects; the features and criteria defined when the project was initially planned often were no longer valid by the end of a 12- to 18-month development cycle. And, as  Reagan  (2012)  puts it, “it’s hard to alter course  when  you’re  being  swept down a large waterfall . . . Too much up-front plan- ning means too much change management downstream” (Slide 2). Committing early to features and schedule  means that compromises will be needed late in the game; early commitments to large features, long schedules, long feedback loops, and the replanning inherent to traditional product development processes create inefficiencies and slow the development cycle. Agile was introduced in the IT world to deal with these issues through adaptive planning, evolutionary delivery, a time-boxed iterative approach, and flexible response  to change. Beck and colleagues (2001) coined the term Agile in their “Manifesto for Agile Software Development,” which called for emphasis on individuals over processes, working software over complete documentation, collabor- ation over contracts, and flexibility over planning; they elaborated a set of 12 supporting principles, among them an insistence that (1) working software be delivered quickly and iterated frequently (in cycles of weeks rather than months), and that (2) working software be the principal measure of progress (Beck et al. 2001).

Agile vs. Stage-Gate

Boehm and Turner (2004) aptly summarize the differences between plan-driven software development (based on gated or waterfall models) and Agile approaches: gate models, they explain, are generally “plan-driven models,” whereas Agile is more “plan and build on the fly.” The differences emerge from the two systems’ different intents—Stage-Gate is a comprehensive idea-to-launch system and a macroplanning process, and Agile is a microplanning project management methodology  (Table 1). Stage-Gate is cross-functional (that is, involving people from marketing, sales, and operations alongside technical personnel) and it has multiple stages spanning the entire idea-to-launch chain, from idea generation through the business case and market launch (Cooper 2011, 83–116). It is also a guide to action, building in specific best practices at each stage—doing voice of the customer work, building a robust business case, designing an effective launch, and so on. In this way, it’s more like a football playbook than   a project management approach. The decisions in Stage- Gate follow an investment decision model; a go decision at a gate commits the resources for the next stage, so that resources are funneled to the best projects as their potential emerges. Stage-Gate thus provides guidance for what projects to do and then what to do within each project. By contrast, Agile development is designed specifically to help product developers rapidly create working software with continual validation from the customer. Once a development project has been approved and its initial requirements mapped out, Agile provides a focus  on execution—that is, writing lines of code. In practice, the Agile development stage typically consists of a number of short development cycles,  known  as  sprints,  with each sprint undertaken by a dedicated project team. The outcome of each sprint should be a working product (executable code) that can be demonstrated to stakeholders (customers, for example). An iteration may not produce enough functionality to warrant a market release, but the goal is to have a potentially available release at the end of each iteration. A sprint iteration typically lasts two to four weeks; multiple  iterations  are  usually  required  to  bring a product or major new features to the point of market release. In this way, product requirements, which are not totally known at the start, are revealed and validated through iteration, and requirements that are initially thought to be important but turn out not to  be  are  weeded out. Agile–Stage-Gate expert Peter Fürst, managing partner of consulting firm Five Is Innovation Management, offered another conceptualization of the differences between the two systems in a private conversation: “In project manage- ment, there are three variables: scope of work, budget, and time. In traditional methods, scope of work is fixed (the  product requirements), and budget and time are flexible. But in a time-boxed system, for each sprint, time and budgets are fixed, and scope of work flexible” (Figure 1). FIGURE 1. Fixed vs. flexible elements in Stage-Gate and Agile (figure courtesy P. Fürst, Five Is Innovation Management) To sum up, Agile is a microplanning or project manage- ment tool designed to engage a development team, includ- ing the customer, in getting to a working end product quickly. Agile is used mostly during the development and testing stages of a new-product project—that is, for two stages out of the five or six included in the typical Stage- Gate process. And it is principally used by the technical people doing the actual development work. Discounting all the hype—Agile has received significant attention since the emergence of the Manifesto—Agile does appear to offer some important benefits for software com- panies. In their study of its implementation in IT contexts, Begel and Nagappan (2007) identified three primary bene- fits: improved communication and coordination, quicker product releases, and faster responses to changed customer requirements or technical challenges. With these important benefits, not surprisingly Agile began to be adopted and embraced by much of the software development industry.

Blending Agile and Stage-Gate

As Agile took root in the software industry, a few larger IT firms that had formal development systems already in place began to build it into their existing gating processes, thus creating hybrid models. Their experience suggests that Agile and Stage-Gate can be used together to advantage. For instance, Karlstrom and Runeson (20052006)  studied three large, European high-technology firms where Stage-Gate and Agile were integrated for IT projects. The three firms that took part in this Swedish study—Ericsson, ABB, and Vodafone—all already had Stage-Gate systems; they simply built Agile methods (the XP version) into their existing processes from the development-approval gate onward. The researchers found first, that the integration did work—the two models were indeed compatible—and second, that this hybrid approach yielded several major payoffs:

  • Better internal team communication, leading to the team feeling more in control, and, incidentally, to better and more visually intuitive progress metrics for manage- ment, for example, the burndown
  • More efficient planning, based on early customer feedback on the really important product features, avoiding inflexible, fixed plans that lead to delays on important features, and “requirements cramming” at the end of
  • Improved customer feedback, as Agile processes seek continuous feedback from customers, making the tech- nical project manager a good  candidate  for  the  role  of customer
  • Clearer resolution of documentation issues, as priorities are resolved between documentation and
  • Improved attitudes, as developers are more motivated by the improved communication and sense of

There are, of course, also some challenges: teams com- municate better internally, but the dedication of full-time teams to the project may lead to more isolation from other parts of the organization; long-range planning tends to be ignored in favor of a focus on the current sprint; and conflicts and resistance may remain, particularly among managers who must give up some control during the Agile portions of the development process. Overall, though, the researchers conclude, “Agile methods give the stage-gate model powerful tools for microplanning, day-to-day work control, and progress reporting” (Karlstrom and Runeson 2005, 49). The daily face-to-face meetings called for by Agile methods provide more powerful communications than written documents, and the fast  and  continuous  feedback  from  customers on product features make for a better product and a more efficient project. Conversely, they note that “software development projects are not isolated activities. They usually exist as sub-projects in an environment composed of hardware development, marketing,  production planning etc., which all must be managed and coordinated concurrently . . . [Stage-Gate] gives  support  not   only  for the communication within the project, but also for decision-makers sponsoring the project or acquiring the outcome of the project” (Karlstrom and Runeson 2006, 204). Thus, Agile offers greater efficiency and focus, and Stage-Gate provides a means to coordinate with other development teams and communicate  with  functions such as marketing and senior management.

Scrum and Stage-Gate: Applying Hybrid Development Processes to Physical Products

The sprint approach has been enabled by the fact that in some fields, hardware development is becoming more like software development. Recently, Agile has begun to attract serious interest from developers of physical products (Cooper 2014;  Ovesen and Sommer 2012). In manufacturing firms, Agile  was first adopted by IT departments or by R&D groups in which software development was a key part of hardware projects (for example,  telecommunications  systems).  The results of these initial projects encouraged R&D groups working on hardware development to experiment with Agile, and to modify the method to fit their needs (Sommer et al. 2015). To some extent, the sprint approach has been enabled by the fact that in some fields (such as electronics and electro- mechanical systems), hardware development is becoming more like software development, with shorter, faster iterations in the development stage.  Newer  techniques and tools, such as computer simulation and 3D printing, mean that traditionally long-lead development-stage tasks (for instance, securing cast components or electronic boards) can now be  compressed  or  even  eliminated. This means hardware development in these  areas  can  look more like software development, with multiple quick iterations and multiple, working prototypes. There have been some challenges for manufacturers adopting Agile practices, among them a lack of scalability, a proliferation of meetings, and a lack of management buy-in due to the differences from the familiar gating systems. Management resistance may also be attributed to some common misconceptions: implementing the Scrum version of Agile, for instance, does not necessarily mean abandoning Stage-Gate; Scrum can be added to Stage-Gate, creating a hybrid that incorporates positive features of both (Sommer et al. 2015). In fact, the Scrum method seems to be the most popular Agile variant among the handful of firms employing Agile for physical product development (Sommer et al. 2015). Scrum was first identified in 1986 as “a flexible, holistic product development strategy where a development team works as  a unit  to reach a  common  goal” as  opposed to  a “traditional, sequential approach” (Takeuchi and Nonaka 1986, 1995). Takeuchi and Nonaka described a new approach to commercial product development that would increase speed and flexibility, which they called the rugby approach. The whole process is performed by one cross- functional team working across multiple overlapping phases, during which the team tries to go the distance as     a unit, passing the ball back and forth, similar to the way in which a rugby team  moves  the  ball  down  the  field. In rugby, a scrum is the manner of restarting the game after a minor infraction; in new-product development, a scrum is a meeting of the project team to to plan its next moves— that is, to decide how to move the ball forward (Schwaber and Beedle 2002; ScrumInc 2013). As with other Agile methodologies, Scrum is employed mainly in the development and testing phases of a pro- duct-development project. The project has been approved by this point in the gating process, but the development stage is not definitively planned in advance; instead, it is broken into small increments—iterations or sprints—each with its own sprint plan. Sprints are time-boxed, limited  to very short timeframes, typically from one to four weeks. Each sprint is preceded by a planning meeting at which three questions must be answered (ScrumInc 2013):

  • What does the customer value most (based on feedback from customers in the previous sprint)?
  • What can be delivered in the upcoming sprint?
  • What work is needed to achieve this deliverable?

At the meeting, the team identifies the tasks to be accom- plished during the sprint and makes a commitment to the sprint goal. Thus, the goals and work plan for the sprints are very much in the control of the project team, which    is self-managed, just as in Agile-Scrum in the IT world. Each sprint  is  followed  by  a  retrospective  meeting at which progress is reviewed and lessons for the next sprint are identified, including feedback from the customer. At this point, the method may diverge from its practice in the IT world. In the case of software development, the outcome of each sprint is a completed, useable, and poten- tially releasable product increment. For physical product development, however, the definition of a “done” deliverable is very different—creating a potentially releasable, working product every two weeks is not usually feasible. Thus, the definition of success for a sprint and the way tasks are allocated to sprints may be different in the hardware context. There are also some important differences from a typical Stage-Gate process. First, Scrum–Stage-Gate project teams must be dedicated—that is, working only on this one project—and physically collocated in a dedicated project room (Sommer, Dukovska-Popovska, and Steger-Jensen 2014). The scrum project room is equipped with at least one large white board (called  the  “scrum board”), used for visually displaying sprint details and key project status information. The team begins each day with the daily scrum, a 15-minute event at which the team synchronizes activities and creates a plan for the next 24 hours. Each sprint works from the sprint backlog, a list of priority features, product increments, and tasks to be completed in the current sprint (items defined at the sprint planning meeting). Progress is monitored via a burndown chart, a two-dimensional graph with the sprint time-period on the x-axis and remaining sprint task times on the y-axis. Behind-schedule tasks are immediately visible on the burndown chart, providing an ongoing focus on executing tasks according to plan. The scrum master, who is a servant-leader for the development team, ensures that the team adheres to Scrum theory, practices, and rules (ScrumInc 2014). He or she also facilities the daily scrums. A study of five major Danish manufacturing firms that implemented Agile–Stage-Gate hybrid models revealed positive results for this Scrum  hybrid  (Sommer  et  al. 2015). The companies, in a range of industries from con- sumer products to  B2B  heavy  equipment,  reported  many  of the same results found in the IT world, namely:

  • Design flexibility (a faster response to change),
  • Improved productivity, communication, and coordi- nation among project team members,
  • Improved focus on the project leading to better prioriti- zation, and
  • Higher morale among team

The Danish study also revealed some negatives, namely delays due to the difficulty of finding dedicated team members, difficulties in linking project teams to the rest    of the organization, mismatches between the requirements of Scrum and the company’s reward system, and a sense that the system was still too bureaucratic. In some firms, Scrum–Stage-Gate is used  for  more than just the two technical stages. It can also be employed in the predevelopment stages, to develop the concept and assess feasibility. In these early phases, open knowledge gaps become analogous to desired software features on the burndown chart, and Scrum then works in the normal way, with each sprint aimed at resolving a particular gap or set of gaps.  

Case: Scrum–Stage-Gate in the Heavy Equipment Sector

A global Swedish manufacturer (automotive industry, B2B) adopted a hybrid Agile–Stage-Gate approach when faced with the challenge of accelerating the development of vital mechanical, electronic, and software subsystems. The com- pany had employed for years a traditional gating system in which considerable effort was spent in the front-end work to avoid entering full-scale development with many knowl- edge gaps. But it was difficult to define tangible, distinct tasks for these front-end phases, and so project teams  ended up focused on the technical side, namely on designs and drawings. As a result, there were many knowledge gaps, in Voice of the Customer data, market requirements, and technical concept capabilities. Thus teams were rushing into the development stage without knowing how the concept would perform technically or if it would meet customer requirements. Scrum was introduced to increase the speed of develop- ment and make the front-end work crisper. Four-week sprints were defined, scheduled consistent with calendar months to make planning and time reporting easy. Each  project was assigned a visualization room with the scrum board on the wall on one side and a number of alternative designs on the other side. Each team held scrum meetings in front of the board twice a week. The clear focus and tight follow-up created by the Scrum approach ignited a strong drive on the project teams: peer pressure within the teams was considerable, with team members pushing each other to deliver on the sprint list. The burndown curve, updated after each scrum meeting, provided the  team with an indicator of progress toward   the sprint goals. Teams also learned to be more realistic   in work planning after a few sprints. The definition of success for a sprint and the way tasks are allocated to sprints may be different in the hardware context. The concept of time-boxing was also introduced to improve efficiency in some tasks—for example, concept evaluation. The time limit, expressed as a task requirement to “make the best possible use of 10 hours to evaluate concept X,” helped the team avoid over-engineering. Agreed-on definitions of “done,” which included results documented as a single-page report, formatted for posting, reviewed by a colleague, and checked into the docu-  ment repository, also helped teams know when to move forward. Demonstration meetings with the major stakeholders outside the project team were held after every sprint, and sprints were closed with retrospective meetings at which outcomes were reviewed and next steps determined. Lars Cederblad, Senior Partner at management consulting firm Level 21, which supported the company   in developing its new approach, described his experience with the hybrid process, and its results, in a private conversation with me: I was acting as scrum master and independent change agent during the first 15 months of the project. The results really exceeded our expectations, with a speed increase of around 30 percent. With that comes more motivated staff and higher employee satisfaction. We also showed that Scrum is excellent for closing knowledge gaps, the focus of the front-end phases  of a project. Four years after implementation, most of the business’s projects now follow the Scrum method within the gating system, and with the same positive effects. The burndown curves from all projects are now reviewed at the senior- level Project Pulse meeting, allowing management to identify potential problems and act before they occur.  

Why Agile–Stage-Gate Hybrids Work for Physical Products

The benefits of Stage-Gate have been well researched and documented: discipline, the staged structure, the go/kill decision-points that cull out bad projects, clear expectations (in the form of defined deliverables) for project teams, and built-in best practices, to name a few. The benefits of the Scrum version of Agile are less well known to hardware developers, but the admittedly limited experience with Agile–Stage-Gate hybrid development models, much of it European, suggests that manufacturers can benefit greatly from this new approach. That’s because the hybrid model balances the benefits and challenges of the two different approaches, creating a number of important advantages. The hybrid Agile–Stage-Gate model, specifically using the Scrum version of Agile:

  • Gets the product right. The hybrid method requires the project team to develop something physical or visual, early and  cheaply  (the  sprints),  and  quickly  get  it in front of customers for feedback. As Steve Jobs, never a proponent of traditional market research, famously said, “People don’t know what they want until you  show it to them” (Isaacson 2011, 567), especially in the case of more radically innovative products. An Agile– Stage-Gate approach addresses this challenge well: the method shows customers something they can see, all the way through the project, beginning even before the development stage commences. The system is also highly adaptive. If product requirements change, the design can be modified early when the cost of change is lower, similar to the strategic pivot in the Lean Startup method (Ries 2011). Finally, building some- thing physical early and often means that solutions to technical issues can be worked through as early proof- of-concept prototypes emerge.
    • Accommodates uncertainty. In traditional stage-and-gate methods, the problem is identified and defined by con- ducting investigations before development begins. These early stages, or “homework phases,” require the project team to undertake market, technical, and business assessments in order to define the product and finan- cially justify the project. Thus, the requirements for the solution are largely defined even before the product enters development. But not every project is so defin- When there is much  uncertainty—for  example, in the case of a highly innovative or bold initiative— and where no amount of voice-of-customer work or technical assessment can get all the answers, then the problem can only be understood through experimen- tation. This means trial and error: building and testing possible solutions, which Agile sprints and iterations allow. Thus, in an Agile or hybrid approach, require- ments are not defined before development but are established as part of the solution-finding process.
    • Accelerates development. Time-boxed sprints, and even time-boxed tasks within sprints, bring a sense of urgency to the development project. In Scrum, all events are  time-boxed  events,  so  every  event  has    a maximum duration; once a sprint begins, its duration  is fixed and cannot be lengthened (ScrumInc 2013). Thus  project teams  commit  to  certain  deliverables   at the beginning of each sprint and then are under pressure to  deliver  within  the  agreed    This forces teams to focus on the essentials and deliver results, rather than focusing on a large, finalized list of requirements or features.
    • Focuses teams. Agile–Stage-Gate project teams are dedi- cated to the one project to ensure adequate resources  to get the work done on the compressed sprint timeline. The notion of dedicated project teams is not new: 1 percent of top-performing businesses already use focused teams, but only 11.4 percent of average firms  do (Cooper 2013, 26). Scrum won’t work optimally without a dedicated team—and this one step alone increases speed dramatically by making sure the project is adequately resourced and supported. Most traditional project teams are woefully underresourced, the result being that projects move painfully slowly. Frequently,even the project leader is spread across multiple projects, and so lacks focus and dedication. By ensuring solid resourcing, Agile–Stage-Gate helps  drive  new  products to market much more quickly.
      • Improves Within-Team Communication. Dedicated teams, a dedicated space where the entire team resides, and daily, face-to-face scrums all contribute to improved communication. Every study of Agile (whether for IT or physical products) reports  this    This  leads to more effective, cross-functional teams with good internal cooperation and communication—a factor frequently cited as a key to both increased speed to market and higher success rates in new product develop- ment (Cooper 2013, 25).

The benefits of building Agile-Scrum into a traditional Stage-Gate system are many, as shown by the evidence, including enthusiastic comments from users in the manu- facturing world. But what adjustments must be  made when applying Scrum to the development of physical products?

Defining a Done Sprint

Clearly, Agile, and particularly Scrum, has value for pro- duct development, but Scrum methods cannot be directly implemented for hardware without some modification.  One key point of difference is in the definition of sprints and what constitutes a done sprint. Software development is almost infinitely divisible; an IT development consisting of multiple product features can be broken down into multiple, small subprojects, which can each be completed in a single sprint. A done sprint is a working product (executable software) that meets the goal of the subproject and can be demonstrated to stakeholders (customers).  Thus, each increment—each sprint—yields a working, albeit feature-limited, product. By contrast, the development of a new machine, food item, or polymer cannot be easily incrementalized. If your product is beer or a diesel engine, you cannot build part    of the beer or part of the engine and demonstrate it working; it certainly won’t be releasable to the market. Moreover, it is usually not possible to have anything that actually functions ready and available within a few weeks. Thus the notion of short time-boxed sprints and the IT definition of “done” do not apply so neatly to hardware (Cooper 2014). A solution may be found in newer versions of Stage- Gate that build in spirals or iterations as a  way to make  the traditional 1990s gating model more adaptive and responsive to fluid market conditions and changing customer requirements (Cooper 2011; Cooper and Edgett 2005). In these models, each iteration builds a product version somewhere between a concept (or virtual product) and a ready-to-trial prototype. Unlike in pure Agile, the result of a sprint may not be a working product but is some- thing that can be shown to the customer to seek feedback— to test a market-facing hypothesis and to seek proof of Unlike in pure Agile, the result of a sprint may not be a working product but is something that can be shown to the customer to seek feedback. concept. These product versions, or “protocepts,” can be computer-generated 3D drawings, virtual prototypes, crude models, working models, or early prototypes. The result    of a done sprint, in this context, may not be a working product, but it is something physical  that  the  customer can respond to (Cooper 2014, 22). If Scrum is applied to earlier stages of the project, for example, the concept and feasibility stages, then the defi- nition of done is relaxed even further, to include anything tangible that can be reviewed by an expert. For example, the results of a market study or voice-of-customer work could count as a done deliverable. There is strong evidence that this spiral, iterative development approach is feasible and works for hardware products: 44.8 percent of top-performing businesses practice these build-test-feedback-revise iterations with customers, compared to only 26.3 percent of firms on average (Cooper 2012, 599).  

Case: Scrum–Stage-Gate in the US Consumer Electronics Sector

One large US manufacturer of electromechanical control devices for homes has increasingly moved into remote control devices, for example to control the household thermostat, lighting, and even the front door, sometimes via smartphone connectivity. Thus, an ever-larger percent- age of each new-product project entails software develop- ment. To no one’s surprise, the  perennial  conflict  been the hardware and software developers arose: Stage-Gate  or Agile? In response, Richard Peterson, the company’s vice president for new product development, introduced the concept of Agile within Stage-Gate, integrating the two concepts to improve development efforts across all groups and  all  project  types.  As  he  told  me,  “We  developed a modified Agile approach that requires a rigorous Stage- Gate process, and continual end-to-end assessment.” The firm now uses Agile sprints and scrums for both physical and IT development within Stage-Gate phases. Agile is employed in particular in the development and testing stages of the Stage-Gate process. A scrum master oversees daily scrums, about 20 minutes in length; the firm also builds design reviews into some scrums and even brings   in peers and outsiders for a peer review. Sprints are about two weeks in length. For this firm’s remote control interconnected devices, it is usually not possible to produce a potentially releasable product every two weeks, but the project team must show something physical at the end of a sprint that was defined at the start; this is the result of completed tasks in that sprint—and not just a slide deck. The result of a sprint could be, for example, a set of completed design drawings or a prototype or an early working model of the product. In this firm’s system, project teams have dedicated team members for each project. Because dedicated teams are not feasible for every project, the firm uses this Agile–Stage-Gate approach only for the larger, major revenue-generating projects—about 20 percent of the projects in their develop- ment pipeline. The company has been using this hybrid process on all major new-product initiatives for over two years. The pro- cess has worked well, according to senior management, and has driven down cycle times. Also, there is much better communication within development teams, and a heigh- tened sense of community. A few challenges have arisen. Project leaders and teams tended to become so focused on the sprints—the next few weeks and their objective for that sprint—that the team lost sight of the ultimate goal. Senior management now meets with hybrid teams periodically (more frequently  than just at gates) to ensure that the longer-term view is considered and the ultimate goal is clear. The problem is now resolved. Additionally, senior leaders were initially somewhat skeptical of the new Scrum system. Thus, they were not required to “speak Agile,” and the firm did not change the new-product development language  used  in the business. Moreover, the gates remained as they had been in the firm’s gating system: deliverables from the previous stage were checked, and a go/kill decision was made to move to the next stage. The changes took place   at the project team level—multiple sprints were employed within the development and testing phases, and program managers (project leaders) were subjected to much press- ure to learn how to facilitate the Agile process and to become scrum masters.

Wrap Up

For physical product developers, an Agile–Stage-Gate hybrid product development model is feasible and may yield positive results. Sprints can be employed for maximum speed, consistent with the IT Agile-Scrum model. But sprints are usually restricted to the develop- ment and testing stages. And the result  of  each  sprint may have to be redefined somewhat to include something physical, the result of a completed task. Additionally, spir- als—a series of build-test-feedback-revise iterations—make the system more adaptive; these spirals fit well into the Agile sprinting concept, in which at the completion of sprints, some version of the product—a protocept—can be demonstrated to stakeholders (customers and manage- ment). Finally, dedicated teams, which are a must for this system to work well, help accelerate the project even more. The early evidence, albeit quite limited, is encouraging. Lead users of this new hybrid system are enthusiastic. In all the cases I’ve cited, the companies have expanded their use of the hybrid model, which speaks to the results it has delivered. Indeed, integrating Agile-Scrum methods into Stage-Gate to yield this new Agile–Stage-Gate hybrid model may be the most exciting and significant change to the new-product process since the introduction of gating systems more than 30 years ago.


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