The Agile Stage-Gate Model

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'''Hybrid Project Management Models (in practice)''' (''possible title'')
 
  
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==Abstract==
  
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Abstract
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The Agile-Stage-Gate model is a hybrid project management approach used in the development of physical products<ref name="3SMEs"/>. As the name may suggest, the model aims to merge two different, almost opposite models, the Agile frameworks and the Stage-Gate® (Stage-Gate® is a registered trademark of Stage-Gate Inc, www.stage-gate.com) to create a new flexible but structured solution<ref name="3SMEs"/>. Currently, gating systems are considered “too linear, too rigid, and too planned” (Edwards et al. 2020)<ref name="3SMEs"/>: generally, unable to keep up with the high degree of uncertainty that characterises modern projects. Agile methodologies (Scrum above all, but also other practices such as Design Thinking and Lean Startup) <ref name="Matrix"/> can be embedded inside stages to deal with the contingencies of the project<ref name="3SMEs"/>. In practice, the Stage-Gate® continues to give the project a step-by-step path from ideation to the launch in the market, while Agile is applied as a tool in daily activities. According to the latest studies, the results from on-the-field experiences state that the Agile-Stage-Gate can improve the product development process in several ways, such as by making the design processes more flexible, achieving higher productivity, supporting better communication and collaboration in teams, and higher team morale <ref name="3SMEs"/>. Some studies also highlighted a higher success rate and a faster development process <ref name="3SMEs"/>. The model is applied by large companies such as Lego, Volvo <ref name="3SMEs"/> and Danfoss <ref name="ASG M"/>, and it has also yielded encouraging results in small-medium enterprises <ref name="3SMEs"/>. However, it poses new challenges to managers in allocating resources, building complete multidisciplinary teams <ref name="3SMEs"/>, organizing meetings <ref name="3SMEs"/>, and overcoming the skepticism of the management. Differently from previous articles on the same subject <ref name="Previous"/>, this article not only aims to investigate the new hybrid approach's origins, nature, and functioning from its foundations, but it also will provide recommendations on when to use a specific hybrid model based on the latest scientific contributions. Furthermore, the article will report the most suitable metrics to evaluate Agile-Stage-Gate projects from a portfolio perspective. In conclusion, a brief reflection on the status quo of the developmental approaches against what the Agile-Stage Gate proposes, followed by the limitations of the model.
  
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==Why the Hybrid Model==
  
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== '''BIG IDEA''' ==
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===Managing Innovation through the Stage-Gate®===
  
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'''Improving the Traditional Stage Gate® with Agile principles'''
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In the second half of the 20th century, gating systems for project management spread all over the world and became a standard in riding the lifecycle of innovation projects, especially in new product development. One of the most famous gating systems is the Stage-Gate® model, formulated by Cooper in 1983 <ref name="3SMEs"/>, a strategic management tool that gives a rigid and plan-based structure to the "idea-to-launch"<ref name="SG1"/>(Edgett, 2015) process, alternating decision-making stations called Gate to operative Stage. A Gate is a set of expected results that must be met by the project leader to access the next Stage. The “exit criteria” vary from one gate to another, or from one project to another, but generally, they should be a set of benchmarks for the project's strategic, marketing, and financial aspects <ref name="SG1"/>. Initially, these standards are mostly qualitative, while they gradually become more quantitative in the final stages<ref name="SG"/>. The evaluation of the current state of the project against gate criteria needs to be assessed by an experienced manager, whose knowledge plays a key role in the decision-making process. Management oversees the greenlighting of the heavy spending decision through the path and helps the team meet the deadlines. Furthermore, management's commitment and support are fundamental in aligning the project's development with the organization's objectives <ref name="SG1"/>. The evaluation of the deliverables in a Gate results in a Go/Kill/Hold/Recycle decision <ref name="SG1"/>. If the deliverables satisfy the exit criteria, the project can move on to the next Stage, “a set of required or recommended best-practice activities needed to progress the project to the next gate or decision point” (Cooper, 2008) <ref name="SG2"/>. In each stage, cross-functional types of analysis are carried out concurrently by multidisciplinary teams of individuals from different areas of the company<ref name="SG"/>, using traditional project management tools such as “Gantt chart, milestones, and critical path” <ref name="ASG M"/>(Cooper, Sommer, 2018). Since every stage has incremental costs, the knowledge acquired thus mitigates the risk. Each stage offers a broader vision and a more analytical perspective to decision-makers, who can evaluate the project using objective data rather than relying on intuitions <ref name="SG"/>. An example of a traditional Stage-Gate® model introduced by Cooper in his article "Stage-gate systems: A new tool for managing new products"(1990) is reported below <ref name="SG"/>:
  
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One of the first signs of “plan-driven”, called “traditional”, project management models can be found in the Manhattan Project, around the 1940s. The main goal of these approaches is to control the project and mitigate uncertainty through the application of a series of tools (PERT, Gantt Chart ecc.) and the continuous evaluation of the project with a phase-gate strategy. These rigid methods unfold their maximum potential in low-uncertainty projects, where most of the requisites are clear at the beginning of the process. These models are largely applied even today (Walrave et al.2022). In the last forty years, project manager techniques have been deeply renovated due to the increasing speed of business, and rising uncertainty in the market. Software companies were one of the first to abound traditional project management models in favor of more light, fast and adaptive approaches. In 2001, a group of developers published the Agile Manifesto, defining 12 principles that inspired practitioners, firstly in the IT sector, to move toward a more iterative way of work that highly involved the customer in the development process (Zasa et al.2021).  Pre-established, detailed plans were replaced with time-boxed iterations, usually called “sprint”, during which developers implement the customer’s feedback and needs listed in the product backlog (Walrave et al.2022). Over the years, the interest in agile practices spread over the boundaries of software development, and involved manufacturing companies that want to develop a physical product, because even if traditional methods help the project be on track, they are “not conducive to breakthrough innovation”. (Beaumont et al.2017). For this reason, an increasing number of companies decided to implement agile methods in their phase-gate processes (especially in engineering and R&D) with a visible improvement in several areas (Beaumont et al.2017), such as employees’ motivation, planning and control abilities, customer’s needs understanding, peers communication and bureaucratic issues.  (Cooper 2016). Several hybrid models have been proposed, like the Waterfall-Scrum-Fall, the Waterfall-Agile, the Hybrid V-model, and the Agile-Stage-Gate. (Reiff, Schlegel, 2022). However, Scrum seems to be the most suitable framework to be integrated with the waterfall model. (Cooper 2016). To better describe the integration between agile and traditional methods, Cooper(2016) affirmed that “Stage-Gate is a macroplanning process, and Agile is microplanning project management methodology”.(Cooper, 2016): practically, agile is integrated within a single phase/stage, or added parallelly to the existing process. (Beaumont et al. 2017)
 
  
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'''THE COEXISTENCE OF AGILE AND STAGE-GATE'''
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[[File:Stage - Gate Process.png|600px|thumb|center|Example of a Stage-Gate model ( adapted <ref name="StageGateProcess"/>). ]]
  
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Agile practices and Stage-Gate® are two of the most famous development approaches in new product development (NPD). According to the PMBOK®Guide, there are three types of development approaches: predictive, adaptive, and hybrid. Predictive, or waterfall, approaches are mostly used in those projects that are “not new” to managers. Project characteristics and requirements can be easily depicted from previous projects, and the features of the final products are clear at the beginning of the process. ( PMBOK®Guide) The scope of the project is fixed, while the budget and time might change in the process. (Cooper 2016). The Stage-Gate® is considered one of these traditional methods. The model gives a rigid and plan-based structure to the idea-to-launch process in new product development, alternating evaluating and assessing stations called “Gate” to more operative “Stage”.
 
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A Gate is a set of expected results that must be met by the project leader to access the next Stage. The project leader enters a Gate with some “deliverables” which are evaluated through some predetermined “exit criteria”. These criteria may vary from one project to another, but generally, they should be a set of benchmarks for the strategic, marketing, and financial aspects of the project. In the beginning, these standards are mostly qualitative, while they gradually become more quantitative in the final stages. (Cooper, 1990, pag. 50). The respect of criteria needs to be assessed by an experienced manager, whose knowledge plays a key role in the decision-making process. Management oversees the greenlighting of the heavy spending decision through the path and helps the team meet the deadlines. Furthermore, involving senior managers is a crucial factor in the success of the project even from the point of view of the company: management's commitment and support are fundamental in aligning the project's development with the organization's objectives. (J. Edgett, 2015) The output of a Gate results in a Go/Kill/Hold/Recycle:
 
  
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*GO: the project fulfills and respects the desired criteria. It can move on to the next stage.
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#Preliminary assessment: Users’ feedback about the concept is gathered through quick research to evaluate how the product would be perceived by the customers <ref name="SG"/>.
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*KILL: the project cannot progress
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#Definition: Customers’ preferences are deeply analyzed in this stage. Thus, the team can identify the basic principles of the future product and draft the first approximate financial and technical prospectuses. Here, legal matters are also considered<ref name="SG"/>.
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*HOLD: the project must wait to be completed, or it can move forward fulfilling some requirements
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#Development: the design of the product is finally developed, and all operative needs and processes are clearly defined <ref name="SG"/>.
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*RECYCLE: the project needs to be improved before the next stage
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#Validation: once the product is prototyped and ready to be produced, the company must test it to evaluate its quality. The customer plays a crucial role in helping the development team to understand if the usability of the product is by what has been stated in the previous stages. After the first tests, more information is available and can be used to improve the product and the production process. Furthermore, considering the new data, the financial prospect of the entire project can be reassessed <ref name="SG"/>.
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#Launch: The product is finally launched on the market, and production can start <ref name="SG"/>.
  
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If the deliverables satisfy the exit criteria, the project can move on to the next Stage. As its inventor stated, a Stage can be defined as “a set of required or recommended best-practice activities needed to progress the project to the next gate or decision point” (Cooper, 2008). In each stage, cross-functional types of analysis are carried out concurrently by multidisciplinary teams of individuals coming from different areas of the company. By gathering information, both the project leader and the management will have the key features of the project. Since every stage has incremental costs, the knowledge acquired thus mitigates the risk and offers a broader vision and an analytical approach to decision-makers rather than relying on intuitions (Cooper, 1990). The first formal Stage-Gate® model introduced by Cooper consisted of five main stages:
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===The Agile-Stage Gate: need for flexibility===
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At the management level, the two questions “Are we doing the right things?” and “Are we doing things right?” are more and more present and require the review of existing strategic and operative plans <ref name="ASG M"/>. In Stage-Gate®, a detailed product proposal is well-defined before starting a project, and project-related costs are evaluated and approved upfront. <ref name="ASG M"/>. Moreover, in the traditional method, the team follows a sequential path based on a predetermined schedule and project blueprint, and the customer is rarely involved in the process<ref name="Portfolio"/>. This approach clashes with the dynamics of the current environment, which asks companies to be flexible and adapt to the market’s changes<ref name="Portfolio"/>. The traditional model has been criticised in several respects. Having project details fixed too early may require rework or compromises in later stages, with negative effects on the time-to-market and the quality of the output. Moreover, excessive bureaucracy makes the model too rigid. In general, gating systems are "not adaptive enough and do not encourage experimentation"(Edwards et al. 2019)<ref name="3SMEs"/>. For this reason, the hybrid Agile-Stage Gate approach gained interest among scholars and practitioners as a possible alternative that blends benefits from both models, thus balancing “discipline and agility” <ref name="Brandl"/> (Brandl et al. 2018). Agile project management is a project management approach that handles complexity by iterative work on the product, adapting its features to the emergent business needs in the process <ref name=" Agile"/>. Even if most of the agile frameworks had been developed during the second half of the 20th century, the Agile philosophy was officially formulated by a group of developers only in 2001, with the publication of the Agile Manifesto <ref name="ASG 1"/>. As affirmed by Abbas et al. (2008) a method, to be considered agile, should be “Adaptive”, “Iterative and Incremental”, and “People Oriented”<ref name=" AgileR"/>.
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*Adaptive: ready to adjust the product, or the “method itself”(Abbas et al. 2008)<ref name=" AgileR"/>, to what is needed after each iteration, based on technological advancements and feedback from previous iterations.<ref name=" AgileR"/>
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*Iterative and Incremental: in a software environment, the features of the product are defined iteratively, and incrementally improved. At the end of each iteration, the customer is involved in the evaluation to gather his opinions and ideas during the process.<ref name=" AgileR"/>
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*People Oriented: the Agile philosophy considers the method applied as a mere tool to support the team in delivering the best possible outcome. The role of people, both the team and the customer, is pivotal in agile philosophy. <ref name=" AgileR"/>
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Generally, the Agile mindset is an “umbrella” that groups a wide number of frameworks, such as Kanban, Extreme Programming, Scrum, and others <ref name="umbrella"/>. In the context of the Stage-Gate®, the Scrum framework seems to be the aptest to be fitted into the stages <ref name=" New Approach"/>.
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In a nutshell, Scrum is an agile project management methodology inspired by rugby that through time-boxed iterations(“Sprint”, usually lasts from 2 to 4 weeks) aims to create a certain improvement, called “Increment”, into the product in the development pipeline.  At the end of each sprint, the outcomes are evaluated with relevant stakeholders in a review session (“Sprint review”). Stakeholder feedback helps the team to update the Product Backlog with new functionalities to be added in the next sprints. Then, the whole sprint is reviewed in a retrospective meeting (“Sprint Retrospective”), where the team discusses what worked well, and what did not, and identifies the key area of improvement for future iterations. <ref name="ScrumGuide"/><ref name="Scrum"/>
  
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#Preliminary assessment: Users’ feedback about the concept is gathered through quick research to evaluate how the product would be perceived by the customers. (Cooper 1990, pag. 52)
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[[File:Scrum Framework-new.png|600px|thumb|right|Scrum Framework (adapted from <ref name="Scrum"/>)]]
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#Definition: In this stage, the customers’ preferences are deeply analyzed. Thus, the team can describe the basic principles of the product and assess the first approximate financial and technical prospects. Here legal matters are also considered.
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#Development: the design of the product is finally developed, and all operative needs and processes are clearly defined.
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#Validation: once the product is ready prototyped and ready to be produced, the company has to test it, to evaluate its
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quality. The customer plays a crucial role in helping the producer understand if the usability of the product is by what has been stated in the previous stages. After the first tests, more information is available and can be used to improve the product and the production process. Furthermore, considering the new data, the financial prospect of the entire project can be reassessed. (Cooper 1990)
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#Launch: The product is finally launched on the market, and production can start. (Cooper, 1990) (maybe extend the descriptions of the stages)
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AGILE
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The Scrum team consists of three main figures:
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*The Scrum Master, the team leader who helps members apply Scrum methods and practices in daily activities. The Scrum Master works on the interface between the team and the organization.<ref name="ScrumGuide"/>
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*Product Owner, who translates the stakeholder needs into achievable objectives, grouped in the Product Backlog. Moreover, The Product Owner is accountable for listing, prioritizing, and communicating the items in the Product Backlog to the team.<ref name="ScrumGuide"/>
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*Developers, the professionals who actually “create” the Increment. The Developers plan the Sprint together and work to meet the quality criteria defined in the Definition of Done, thus realizing an Increment.<ref name="ScrumGuide"/>
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However, other Agile methodologies can be used to improve the existing product development roadmap, such as Lean Startup and Design Thinking <ref name="Matrix"/>.
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According to Cooper and Sommer <ref name=" New Approach"/>, in the first decade of 2000, some IT companies showed that the combination of the two models was possible. Firms in this field often aimed to develop a product that involved both software and hardware parts. The development of each of these two components was strongly connected to the other, and the processes were also linked to several different functions that had to be aligned to reach a common goal. These companies already applied their phase-gate and agile models to the development of new products. In this context, the traditional gating system fostered the communication inter-teams involved in the project and gave support to the project's sponsors. On the other hand, agile practices were applied to control and plan the daily project tasks, and keep track of the project advancements. The mix provided benefits and created new challenges, but generally, it proved that the coexistence of the two approaches was possible <ref name=" New Approach"/>. Nowadays, the hybrid model is relevant even for those companies that develop physical products. New technologies on the market allow teams to develop and test new ideas faster, reproducing working rhythms common in software development. In this context, the importance of agile arises even in the manufacturing world, and a new way of exploring new solutions is needed. (Cooper 2016) <ref name="Cooper"/>.
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In practice, the Agile-Stage Gate model revolutionizes traditional project management in new product development. Gantt Charts, milestones, and critical path planning are replaced with agile practices and tools. <ref name="Hybrid"/> Inside each stage, the development process is divided into sprints, at the end of which the product should have gained an incremental improvement. <ref name="Hybrid"/> Differently from the traditional Stage-Gate®, a short-term planning approach drives the projects. <ref name="Hybrid"/> The merge of these two models gives the product development process a structured plan from a strategic side (Stage-Gate®) while providing enough degrees of freedom to adjust products and action plans along the way at the tactical and operational levels. <ref name="Brandl"/>  The product is developed through sequential iterations: at the end of each one, the team should aim to design a prototype ready to be presented to the client to gather useful feedback and plan the goal for the next iterations <ref name="Hybrid"/>.
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There is no common terminology to define the Agile-Stage Gate. Often, the “Agile-Stage Gate” label is used to refer to the Scrum-Stage Gate hybrid.
  
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On the other side, Agile is the core of adaptive developmental approaches. The PMBOK® Guide states that those methods are characterized by an “iterative and incremental” process that uses stakeholders’ feedback to adjust the product. Adaptive methods are largely used in those projects where the scope is likely to change, as well as the details of the final product, based on the customer’s needs(PMBOK® Guide). In adaptive models, budget and time are often fixed, while the scope may vary, based on the voice of the customer(Cooper, 2016)
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[[File:Agile-Stage Gate.png|400px|thumb|center|Agile practices in phases of the Stage-Gate® model (Adapted from<ref name="ASG M"/>)]]
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.Arguably, the primal ancestor of Agile practice can be found in Deming’s PLAN-DO-CHECK-ACT (PDCA) cycle and its first application was in the Japanese automotive industry. This means that, even if the IT sector was the first field to be innovated by Agile practices, its roots must be found in manufacturing. Agile and Scrum, the most used framework in hybrid stage-gate models, don’t have the same meaning. Scrum is a framework, and agile techniques embed some Scrum features. (Abbas et al. 2008). In “The New New Product Development Game” Takeuchi and Nonaka formulated a rugby-inspired approach looking at management methods of different companies, such as Honda, Canon, and Hewlett-Packard. The authors seemed to see forward in the future of the development of hybrid methods: as they stated: “Just as important, the new approach can act as a change agent: it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization.”(Takeuchi Hirotaka and Ikujiro Nonaka, 1986). In the context of Agile method applied in product development, Beaumont et al.(2017) addressed the areas that are most involved in the change:
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*Iterative Process: “Iterative learning loops” (Beaumont et al. 2017) are
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According to Cooper and Sommers <ref name="ASG M"/>, the results for early adopters are encouraging. Chamberlain, a company operating in the field of home devices, applied the Agile-Stage-Gate to better coordinate the development of hardware and software components. They broke down each stage into different three-week sprints. The company achieved impressive results in terms of productivity and reduction of cycle time. Danfoss implemented sprints in the design and validation phases, with a 30% reduction of time-to-market. GE implemented a hybrid model in the development of aero-engines. The company used Lean Startup practices in two of its three-stage gating system (respectively Seed and Launch of Seed-Launch-Grow). They managed to halve the time required to test an engine. Honeywell, after the implementation of a tailored hybrid model, experienced positive effects on the internal culture and carried out successful pilot projects.<ref name="ASG M"/>
  
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*Teams
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== Hybrid Models in practice ==
  
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*Governance
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===Traditional or Hybrid Model? The Hybrid Model Matrix===
  
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The integration of Agile methods in well-established procedures could be a difficult challenge, as the change of management makes the complexity rise. Taking responsibility, self-management, transparency, and peer agreement are the keywords of the method. Agile is a way of thinking, and it has to deal with the culture of the organization. All these features must be understood by the management and applied properly in line with the goal of the organization. (Maximini and Rauscher, 2018).
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Cooper and Sommer, in their article “From Experience: The Agile-Stage-Gate Hybrid Model: A Promising New Approach and a New Research Opportunity” (2016), asked the question of “when to use Agile-Stage-Gate?” <ref name=" New Approach"/>. They suggested that the Agile Stage-Gate could be applied for radical and incremental product development<ref name=" New Approach"/>. Generally, the Agile-Stage-Gate seemed to work better in contexts with “high uncertainty and a great need for experimentation and failing fast”(Cooper, Sommer, 2016)<ref name=" New Approach"/>. However, answering the initial question may still be difficult. A study by Cocchi et al. (2021) <ref name="Matrix"/> introduced a tool for project managers, the Hybrid Model Matrix, that aimed to make easier the decision-making process to choose the right model for the right project. The matrix has been defined as a result of a case study carried out on a firm in the food industry. This company applied hybrid models combining a six-phase Stage-Gate (Ideation, Concept, Business case, Development, Testing, and Launch) with different Agile methodologies, such as Scrum, Lean Start-up, and Design Thinking practices.<ref name="Matrix"/>
  
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According to the studies by Karlstrom and Runeson reported by Cooper(2016), the idea of merging Agile and Stage-Gate® models was born in the IT sector. Companies in this field often aimed to sell a product that involved both the software and hardware. The development of the two components was strongly correlated, and the processes were also linked to several different functions that must be aligned to reach a common goal. These companies already applied their phase-gate structure to the development of new products: they tried to insert agile practices into the stages, thus creating a hybrid model. The mix provided benefits and created new challenges, but generally, it proved that the coexistence between two the approaches is possible. Nowadays, the hybrid model is relevant even for those companies which develop physical products. New technologies on the market allow teams to develop and test new ideas faster, reproducing working rhythms that are common in the software development world. In this context, the importance of agile arises even in the manufacturing world, and a new way of exploring new solutions is needed. (Cooper 2016).
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Although the company applied the most recent techniques, it lacked a structured framework that could facilitate the decision on the appropriate methodology to be employed for a given project. The choice of the model depended on the management’s on-the-field knowledge and their ability to evaluate resources in conjunction with the project's financial return. <ref name="Matrix"/>. The matrix states two important factors to be considered before the start of the process:
  
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== Hybrid Models in practice ==
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*Knowledge about Users (KAU): this could be “wide” or “limited” and it refers to the point of view of the customers. “Wide” means that the company is aware of costumer’s tastes and preferences. The target is clear. On the contrary, when the KAU is “limited” it indicates a knowledge gap in understanding the customer’s need. <ref name="Matrix"/>
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*Knowledge about Product Category (KAPG): this indicator includes a broad range of elements that define how is deep the knowledge of a company for a specific product. This involves the strategic relationship with stakeholders and market positioning. A product category can already exist or can be new. <ref name="Matrix"/>
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[[File:Hybrid model matrix.png|600px|thumb|center|The Hybrid Model Matrix (adapted from Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) The Hybrid Model MatrixEnhancing Stage-Gate with Design Thinking, Lean Startup, and Agile, Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1... <ref name="Matrix"/>)]]
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The Matrix consists of four quadrants, and each one suggests a possible project management model.
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*Low Knowledge about Users/ High Category Knowledge
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*Low Knowledge about Users/Low Category Knowledge
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*High Knowledge about Users and Category
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*High Knowledge about users and Low category knowledge
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The matrix proposes a possible approach to the challenges that may arise in each quadrant. The traditional plan-based model (the Stage-Gate® only) is the perfect solution when the company has all the needed knowledge before the development process. <ref name="Matrix"/> Generally, hybrid models are applied when some pieces of information are missing <ref name="Matrix"/>. When the company has limited knowledge of customers’ habits, but the product concept is clear, a possible solution might be using a hybrid model. <ref name="Matrix"/> Design Thinking techniques are implemented in the "Ideation" phase to empathize with the client and learn about his habits deeper than what a simple phase-gate model allows <ref name="Matrix"/>. When the company wants to explore new markets, and a whole new product has to be developed, Design Thinking is used in the "Ideation" and the "Concept" phase, while Lean Startup gathers information about the unknown market in the "Business Case". <ref name="Matrix"/> Finally, when the knowledge about the user is high but the company wants to develop a product that couldn’t be associated with existing categories, the Agile-Stage-Gate model is chosen, with agile (Scrum) elements in the "Development" and "Testing". <ref name="Matrix"/> Iterations are useful to try different solutions and their impact on production or sales, like packaging or pricing.<ref name="Matrix"/>
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Overall, the Matrix provides some benefits. It is a powerful decision-making tool that fosters an objective evaluation of the developmental approach in each project stage. In this way, managers can reach an agreement on the methodology, avoiding later plan changes. <ref name="Matrix"/> Moreover, the internal point of view of the matrix protects the company from uncertain financial estimations or inaccurate technological evaluations, supports managers in choosing what product to develop, and fosters innovation in the portfolio. <ref name="Matrix"/> Finally, the matrix gives HR managers a broad overview of what kind of techniques will be applied to the NPD, thus supporting them in the resource selection process. <ref name="Matrix"/> Those companies that cannot hire specialists in those areas could rely on “ad hoc consultancy”. <ref name="Matrix"/>
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===Managing Agile-Stage Gate Projects: a portfolio perspective===
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The Agile-Stage Gate can be analysed on two different levels: the operational level, in which sprints are performed, and the strategic level, where the traditional stage-gate structure is kept to provide an adequate level of control on the project life-cycle.<ref name="ASG 1"/> Nevertheless, the two levels are not disconnected, but the adaptive, iterative approaches on the operational level impact how a project is evaluated at portfolio level. According to Cooper and Sommer <ref name="Portfolio"/>, there are two common problems in new-product portfolio management: an overloaded pipeline, due to the incapacity of killing not-so-valuable projects, and the “lack of data integrity”(Cooper, Sommer, 2020)<ref name="Portfolio"/>, which may also affect the go/kill decision-making process.<ref name="Portfolio"/> Consequently, the lack of reliable data in the “front-end homework” leads to poor evaluations in terms of the market’s needs, pricing, and final customers.<ref name="Portfolio"/> From this perspective, the Agile-Stage Gate keeps the existing structure and activities of the Stage. The difference from the previous model is the iterative and flexible approach to the development process, which through iterations allows increasingly reliable cost and market data to be collected, thus fostering a continuous evaluation/validation of the project.<ref name="Portfolio"/> Moreover, it encourages the engagement of management, because customer feedback can be reported to the senior management immediately, who can effectively evaluate the project in time and perform a go/kill decision before the project becomes too mature to be stopped. <ref name="Portfolio"/>
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However, integrating agile may bring out new challenges, because traditional project management methods for project prioritization can become senseless by the evolving nature of an agile project. <ref name="Portfolio"/>
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Cooper and Sommer, in their article "New-Product Portfolio Management with Agile"(2020)<ref name="Portfolio"/>, suggest a set of metrics suitable to evaluate agile projects from an Agile-Stage-Gate portfolio perspective.
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=====The Burndown Chart=====
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The Burndown chart is an agile tool to track team progress. Usually, the chart is applied to a single sprint, but in the ASG it can be used to track the whole stage. At the beginning of each stage, the tasks to be done in the stage are grouped in a project backlog. Moreover, the total number of sprints needed before moving to the next stage is approximated. The final result is a “dynamic”(Cooper, 2020)<ref name="Portfolio"/> Burndown chart, where sprints needed and tasks in the backlog change during the process. The team's progress can be evaluated by looking at the number of remaining sprints, or by calculating the Proximity Metric:<ref name="Portfolio"/>
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<math> \text{Proximity Metric} = \frac {\text{Sprints Done}} {\text{Sprints Done + Estimated Sprints Remaining}} </math>
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[[File:ASG Burndown Chart.png |400px|thumb|center|Burndown Chart for Agile project managed in a Stage-Gate® Environment ( adapted from <ref name="Portfolio"/>)]]
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====The Productivity index====
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The Productivity Index (PI) seems to be suitable for agile projects. It highlights how much value is produced by the work done, and it is calculated over time. The PI is calculated as
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<math>PI = \frac {NPV} {\text{Money remaining to be spent or Number of work days left to be done}} </math>
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An increasing PI Curve is a signal of a successful project. The PI also gives useful insights about overall productivity, thus fostering effective project prioritisation.<ref name="Portfolio"/>
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====Expected Commercial Value (ECV)====
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Among the existing tools, the ECV seems particularly suitable for agile projects, because it “provides a realistic financial model for handling incremental or stepwise investment in a new-product project, in the form of a decision tree approach that evaluates the investment a step at a time” (Cooper, Sommer, 2020)<ref name="Portfolio"/>.
 +
In ECV, it is possible to face two alternatives: one sprint and N sprints.
 +
In the first case,
 +
 +
<math>ECV = (R \cdot P)-C </math>,
 +
 
 +
were
 +
 
 +
*R = financial outcome expected from the project (usually presented as the current worth of the earnings expected to be received in the future)
 +
*P = probability of success
 +
*C= cost of undertaking the project
 +
Starting from the assumption that each iteration requires the same amount of money to be invested, at N iteration the ECV is
 +
 
 +
<math> ECV = R \cdot P - (C \cdot RMFactor) </math>
 +
 
 +
where the RMFactor is
 +
 
 +
<math> RMFactor = 1/N \cdot (1 - P)/(1 - P^{1/N})</math>
  
−
Hybrid project management approaches are already well-known in standards. The PMBOK® Guide, in the Project Performance Domain, proposes the hybrid approach as a “combination of adaptive and predictive approach”, suitable for uncertain and risky projects, or when “deliverables can be modularized”. Following the standard, a hybrid approach could be applied when two teams are working on the same project but on different deliverables, and sometimes they might need to apply different methods, one team a predictive approach and the other an adaptive approach.  
+
The probability of success can be estimated with the Delphi Method, with the help of some experts in that field. The ECV yields several advantages, such as taking into account the ambiguous nature of agile projects, the “incremental nature of investment decision” (Cooper, 2020), and the dynamic value of success probability. It can also be used in project prioritisation with the PI.<ref name="Portfolio"/>
−
When project managers are required to choose a methodology or a framework, usually there are two possible ways:
+
  
−
*Look for an off-the-shelf hybrid solution, and try to implement it verbatim
+
====Strategic Buckets: dynamic budgeting for dynamic portfolios====
 +
A more frequent evaluation of projects against portfolio requirements increases the number of projects that come in and out of the portfolio during the year. Therefore, budgeting activities should also follow the dynamic nature of agile. In the Strategic Buckets systems there are four key phases:
 +
#projects are categorized based on certain criteria, decided by senior management.
 +
#In each bucket, projects are ordered based on their priority, usually defined by using the PI
 +
#Finally, resources are allocated in each bucket from the top-priority project.
 +
#Projects that are at the bottom of the list should be killed or paused, waiting for resources from other projects. Inside a bucket, a portfolio manager can allocate resources from one project to another based on gate decisions, priority lists, and resource constraints.<ref name="Portfolio"/>
  
−
*Try to develop their own tailored procedure, starting from what works and what should be improved, involving the team in creating the most suitable process for the current project. (PMBOK® Guide)
+
==Critical Reflections on Status Quo and ASG Limitations==
  
−
The same works for hybrid approaches. A hybrid approach can be obtained as a tailored solution, especially in those companies that want to implement new elements in their well-established procedures. The PMI defines tailoring as “the deliberate adaptation of the project management approach, governance, and processes to make them more suitable for the given environment and the work at hand.” (PMI – The Standard for Project Management). A project manager may decide to tailor the project development approach, as well as processes, engagement, tools, methods, and artifacts depending on different types of factors: the number of people involved, the complexity of the project, and so on. The PMI also lists some of the possible benefits provided by tailoring, such as a major respect for project constraints, a higher buy-in of the team in day-to-day activities (especially for those who have played a role in the tailoring process), and an empowered focus on the market and client’s needs (PMI – The Standard for Project Management).
 
  
−
Generally, the PMI describes the tailoring process with the following 4 steps:  
+
The Agile-Stage Gate is a broad concept, that touches various aspects of project management. Firstly, from a project perspective, implementing Agile within each stage, or in some of them, modifies the overall developmental approach of the project. The PMBOK® defines a developmental approach as “the means used to create and evolve the product, service, or result during the project life cycle”(PMI, 2021)<ref name="PMI"/>. The traditional approach to product development is predictive and plan-driven, and it aims to mitigate uncertainty through a deep front-end analysis. <ref name="PMI"/>. The method is particularly effective when project requirements are clear at the beginning of the project, so “scope, schedule, cost, resource needs, and risks” (PMI, 2021)<ref name="PMI"/> can be considered non-variable during the project life cycle <ref name="PMI"/>. This is also confirmed by the study by Cocchi et al.(2021)<ref name="Matrix"/>, where the traditional Stage-Gate® was applied in a relatively stable environment. For some projects, this approach might not be optimal, because project features can evolve and even change radically during the project, therefore strictly adhering to initial evaluations may lead a project to fail <ref name="ASG M"/>.In this context, according to the PMBOK®, the most suitable approach for those projects when “requirements are subject to a high level of uncertainty and volatility and are likely to change”(PMI, 2021) <ref name="PMI"/>,  is the adaptive one <ref name="PMI"/>. Thanks to iterations, the outcome can advance incrementally, driven by evolving requests. The Agile-Stage-Gate may also utilise a hybrid approach, described as a mix of predictive and adaptive approaches <ref name="PMI"/>. Adopting a hybrid developmental approach is suggested when it is possible to break down the deliverables into different modules, when different teams can work on different deliverables, or generally in uncertain situations where project requirements are not clear and may be necessary to evaluate different alternatives.<ref name="PMI"/>. When a product is created with an adaptive approach and implemented with a predictive one, overall it can be considered a hybrid approach <ref name="PMI"/>. This specific condition could be associated with those models where Agile is used in only some (and not all) stages, as happens in the study of Cocchi et al.(2021) <ref name="Matrix"/>.
 +
Despite its advantages, the Agile-Stage-Gate model also has some drawbacks too. According to Salvato et al.(2020) <ref name=" Salvato"/>, the study revealed that one of the possible negative consequences of the model was the increasing cost of the project. The author suggested that it could be related to three key factors:
 +
*The merge of Agile and Stage-Gate® was not completely implemented, resulting in two-faced structures where the gating system and Agile worked together without harmony. In practice, the management continued to use the same old model without understanding the agile practices of the team, thus creating terminology obstacles at gate meetings and not completely recognizing the team’s needs. To have a smoother hybridisation process, more resources were involved <ref name=" Salvato"/>
 +
*Frequent demonstrations with physical prototypes involved resources for weeks, with a negative impact on project costs. Prototyping methods, such as 3-D printing, digital modeling, and virtual prototyping, can be used to accelerate the prototype definition. <ref name=" Salvato"/>
 +
*In the traditional gating model, resources can be shared among different projects. On the contrary, agile projects required a dedicated team, keeping the “off-peak time” not optimally used. In some cases, especially in “longer duration physical product activities”(Salvato et al. 2020), continuous sprints resulted in a high workload for team members, with detrimental consequences on their well-being. <ref name=" Salvato"/>
  
−
#Select Initial Development Approach: in the first step, the team decides which type of approach should be applied to the project. The final decision may depend on several internal factors, like the team's working culture, their knowledge about the product and different options, and so on.
+
== Annotated Bibliography ==
−
#Tailor For Organization: the tailoring process should be in line with organizational direction and policies. Usually, organizations already have well-established procedures that work as a basis for further developments. New proposals should be properly explained and should reach an initial consensus between decision-makers. Thus, the manager will be sure that the new approach won’t jeopardize organizational objectives.
+
−
#Tailor For Project: it is important to lead the team through the tailoring process.
+
−
#Implement Ongoing Improvement: the tailored process should be improved while used, and any experience may be useful to take the model to the next level. Moreover, a “continuous improvement” approach could enhance the involvement of the team.
+
  
 +
''' Robert G. Cooper, Stage-gate systems: A new tool for managing new products, Business Horizons, Volume 33, Issue 3, 1990, Pages 44-54, ISSN 0007-6813, https://doi.org/10.1016/0007-6813(90)90040-I'''
  
−
'''A framework to tailor Agile practices in well-established procedures'''
+
In this article, Robert G. Cooper explains in detail its Stage-Gate system, a plan-based approach to manage product innovation and deliver more and better products on the market. After a first introduction to the importance of product innovation, the article discusses why a gating system is necessary for product development, outlining its strongest points. Moreover, the article provides an example of the ideal 5-gate-5-stages Stage-Gate model, describing carefully the activities in each stage, the decision-making process, and the exit criteria at each gate. Overall, this article gives a broad overview of the Stage-Gate system.
  
−
A possible framework for tailoring agile practices in a manufacturing environment is proposed by  Brandl et al. (2021). In their research, they developed a method that helps project managers:
+
'''K. Schwaber and J. Sutherland, "The Scrum Guide The Definitive Guide to Scrum: The Rules of the Game", Scrum.org, 2020.'''
  
−
*Adopt agile practices, creating a “local agility” instead of trying to implement a whole framework
+
Schwaber and Sutherland, in their Guide, describe completely the Scrum framework, a rugby-inspired project management model. Firstly developed in software development, its strengths have caught the attention of practitioners from outside the IT world, and today the approach is one of the most famous Agile methods for managing complex product development. in this Guide, all the key aspects of Scrum are presented: the underlying theory, its values, the key roles involve, Scrum events, and artifacts. In Agile-Stage-Gate, most of the implemented practices have their roots in Scrum, therefore the Scrum guide is a must-have when implementing the hybrid project management methodology.
  
−
*Identify and choose the most suitable practice in relation to the problem to be solved without a deep understanding and experience of the agile world.
+
''' Robert G. Cooper (2016) "Agile–Stage-Gate Hybrids", Research-Technology Management, 59:1, 21-29, DOI: 10.1080/08956308.2016.1117317 '''
  
−
in what they called a complex technical planning project (CTTP). Those projects are characterized by a high level of uncertainty due to internal and external factors.  The company, operating in the automotive sector, had already tried to implement agile practices into their CTPPs, but the adoption required excessive effort in terms of resources and time, and in the end, the managers returned to their initial approach. The method aims to make the adoption process easier, and instead of implementing an off-the-shelf solution, it suggests starting from pinpoint a specific obstacle and trying to overcome it with the most suitable agile practice. The study considered three of the most famous agile framework, Scrum, Kanban, and Xtreme Programming, and selected only those practices "transferrable, deployable and independent" (Brandl et al, 2021).
+
In this article, Cooper provides a general explanation of what a Hybrid Agile-Stage-Gate model is. The two models, the gating system and the Agile philosophy (especially in the context of the Scrum framework) are initially compared one against the other. Then, the author describes how to merge these two management models in the manufacturing world. Nevertheless, Scrum and Stage-Gate cannot be merged in their off-the-shelf version: some changes are needed to make the practices perfectly fit the context. Therefore, after describing the advantages of the hybrid mode, the author gives some recommendations on how to adapt the "Definition of Done" to different stages. Generally, the article is a good entry-level guide to better understand how the Agile-Stage-Gate may work in practice.
−
The model consists of three phases: “Assess”, “Supplement the modus operandi” and “Operationalize”. In the first two steps, four “auxiliary models” (two checklists and two matrices) are applied.  
+
  
−
*Assess
+
'''Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) "The Hybrid Model Matrix Enhancing Stage-Gate with Design Thinking, Lean Startup, and Agile", Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1942645'''
−
During the Assess phase, project managers are required to reflect on their project and on the necessity whether adopting agile project management or not, as well as to state what is needed to implement agile with upper managers and their teams. A self-reflection on the complexity of the project is done by answering the question in the following checklist (A). As the author suggests, an overall difficulty in answering the questions may indicate that they are operating in a complex environment. At the same time, managers can investigate if there is a breeding ground for agile project management by evaluating the statements in the checklist (B).  
+
  
−
{| class="wikitable"
+
The article contributes to the discussion about the hybrid model by providing a tool, the Hybrid Model Matrix, to help practitioners in choosing the right model for a given project. The Matrix is built upon two main factors, the knowledge the company has about the users and the knowledge about the product category( in other words, if the product can be associated with existing categories or not). Based on these two factors, each quadrant of the Matrix suggests the fittest project management model. The article is also a good opportunity to expand the concept of Agile hybrid models as a broader concept, as it shows how other Agile-related methodologies, such as Design Thinking and Lean Startup, can be applied to product development.
−
| Checklist (A)
+
−
|* Stakeholder
+
−
# Who contributes to the project?
+
−
# How many and which departments participate?
+
−
# How many and which persons participate?
+
−
# How many and which external stakeholders participate?
+
−
* Technology
+
−
# Which technologies are involved now and throughout the project?
+
−
# How ranks the maturity level of these technologies
+
−
# How can my team cope with the requirements of these technologies
+
−
# Do the involved persons have knowledge about these technologies?
+
−
#Are the involved persons experienced in practice with these technologies?
+
−
* Market
+
−
# Is the relevant market stable and predictable?
+
−
# How does a market change affect the project?
+
−
*Project Management
+
−
# What tangible project requirements do I know? Are they valid?
+
−
# How can I guarantee transparency?
+
−
# How can I coordinate the project?
+
−
# How does the tangible project plan look like? (considering super-and sub-ordinate project and their respective plans)
+
−
# Do I know all essential milestones and their deadline?
+
−
# Is the project plan reliable?
+
−
*Scope
+
−
# What is my scope of accountability
+
−
# What is my direct interfaces' scope of accountability?
+
−
# Are the accountabilities between the interface partners clearly regulated?
+
−
# Is the arrangement solid?
+
−
* Competence
+
−
# Which competencies do I need in my team to achieve the project goal?
+
−
# Do I know all the necessary competencies?
+
−
# Are all required skills and competencies included in the project team?
+
−
*CAN I GIVE SATISFYING ANSWERS TO ALL QUESTIONS?
+
−
|-
+
−
|
+
−
Checklist (B)
+
−
|
+
−
* Project
+
−
# I am the initiator for an agile approach
+
−
# I know my project's internal or external customer
+
−
# The customer can test and review partial results
+
−
# The project's goal is clearly defined. I understand this goal
+
−
# I cannot specify the requirements of the project in detail
+
−
# The project requirements may change
+
−
# Pace plays a significant role throughout the implementation
+
−
*Team
+
−
# I need interdisciplinary competences in my team to achieve this goal
+
−
# My team welcomes new ideas and changes
+
−
# My team appreciates community spirit
+
−
# I have trust in my team
+
−
# I let my team make mistakes to learn from them
+
−
*Company
+
−
# The superior management grants the required room from maneuvre
+
−
# The core project team is fully dedicated
+
−
|}
+
  
−
*Supplement the Modus Operandi
+
'''Robert G. Cooper & Anita Friis Sommer (2020) New-Product Portfolio Management with Agile, Research-Technology Management, 63:1, 29-38, DOI: 10.1080/08956308.2020.1686291'''
−
The main goal of this phase is to choose the most fitting practice to solve a specific problem. The authors developed a linking model with the help of experts’ knowledge in agile. The model involves two matrices, an objective-principle-matrix, and a principle-practices-matrix. The first creates a relationship between common areas of improvement in a project and the 12 principles in the Agile Manifesto, while the second links the same principles to a group of selected agile practices. Then, each expert assigns a value to each practice for each principle, evaluating to what degree a practice can enhance a specific principle. Summarizing, the connection between the two matrices is given by the linking model, as it is shown in the figure below. Now, the manager can pick and implement the practice that fits most to the situation.  
+
  
−
[[File:Image-Tailoring.jpg|600px|thumb|center|The linking model creates a relationship between the objectives-principle-matrix and the principle-practices matrix]]
+
Managing new projects in an Agile-Stage-Gate environment requires to re-design the way managers evaluate and keep track of the initiatives. In the context of new product development of physical products, the article by Cooper and Sommer offers innovative guidelines to manage agile projects. In the first part, the authors introduce the common problems of new product portfolios and explain how agile practices may provide benefits to the process. Then, they discuss the emerging challenges of agile projects, providing some useful metrics to support a better and more dynamic evaluation.
  
−
*Operationalize
+
==References==
−
At the operational level, the adoption of new practices falls within the field of change management. The authors applied Kotter’s eight steps of successful change management. As with every type of change, this phase may face some resistance. A good way of overcoming the initial obstacles might be organizing workshops to facilitate the understanding and implementation of these new practices. However, it is important to pay attention to the language used. Introducing terms specific to the agile field might be counterproductive.
+
<references>
  
 +
<ref name="3SMEs"> EDWARDS, Kasper, et al. Evaluating the agile-stage-gate hybrid model: Experiences from three SME manufacturing firms. International Journal of Innovation and Technology Management, 2019, 16.08: 1950048. </ref>
  
−
'''Traditional or Hybrid Model? The Hybrid Model Matrix'''
+
<ref name="Matrix"> Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) The Hybrid Model MatrixEnhancing Stage-Gate with Design Thinking, Lean Startup, and Agile, Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1942645 </ref>
  
−
More and more companies are embracing hybrid models for new product development. For those organizations that are already applying successful hybrid strategies, it could be difficult to choose a suitable model for a specific product development project. Cocchi et al. (2021) introduced a tool for project managers, the Hybrid Model Matrix, that aims to make easier the decision-making process to choose the right model for the right project. The matrix is a result of a case study carried out on a firm in the food industry. This company already applied hybrid methods combining a five-phase Stage-Gate(Ideation, Concept, Business case, Testing, and Launch) with Agile, Lean Start-up, and Design Thinking practices.  
+
<ref name=" AgileR"> Abbas, N., Gravell, A.M., Wills, G.B. (2008). Historical Roots of Agile Methods: Where Did “Agile Thinking” Come From?. In: Abrahamsson, P., Baskerville, R., Conboy, K., Fitzgerald, B., Morgan, L., Wang, X. (eds) Agile Processes in Software Engineering and Extreme Programming. XP 2008. Lecture Notes in Business Information Processing, vol 9. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-68255-4_10 </ref>
  
−
Although the company applied the most recent techniques, it lacked a structured framework that can facilitate the decision on the appropriate methodology to be employed for a particular project. The choice of the model depended on the management’s on-the-field knowledge and their ability to evaluate resources in conjunction with the financial return of the project. (Cocchi et al, 2021). The matrix provides some useful guidelines for the agile methods implementation. The matrix states two important factors to be considered before the start of the process:
+
<ref name="SG1"> S. J. Edgett, “Idea‐to‐Launch (Stage ‐ Gate) Model : An Overview,” Stage-Gate Int., pp. 1–5, 2015 </ref>
  
−
- Knowledge about Users (KAU): this could be “wide” or “limited” and it refers to the point of view of the customers. “Wide” means that the company is aware of costumer’s tastes and preferences. The target is clear. On the contrary, when the KAU is “limited” it indicates a knowledge gap in understanding the customer’s need.
+
<ref name="SG"> Robert G. Cooper, Stage-gate systems: A new tool for managing new products, Business Horizons, Volume 33, Issue 3, 1990, Pages 44-54, ISSN 0007-6813, https://doi.org/10.1016/0007-6813(90)90040-I. (https://www.sciencedirect.com/science/article/pii/000768139090040I) </ref>
  
−
- Knowledge about Product Category (KAPG): this indicator includes a broad range of elements that define how is deep the knowledge of a company for a specific product. This involves the strategic relationship with stakeholders and market positioning. A product category can already exist or can be new.
+
<ref name="SG2"> Cooper, Robert. (2008). Perspective: The Stage‐Gate® Idea‐to‐Launch Process—Update, What's New, and NexGen Systems*. Journal of Product Innovation Management. 25. 213 - 232. 10.1111/j.1540-5885.2008.00296.x. </ref>
  
−
Image of the Matrix
+
<ref name="ASG 1"> ZASA, Federico P.; PATRUCCO, Andrea; PELLIZZONI, Elena. Managing the hybrid organization: How can agile and traditional project management coexist?. Research-Technology Management, 2020, 64.1: 54-63.</ref>
  
−
The Matrix consists of four quadrants, and each one suggests a possible developmental approach.  
+
<ref name="Hybrid"> REIFF, Janine; SCHLEGEL, Dennis. Hybrid project management–a systematic literature review. International journal of information systems and project management, 2022, 10.2: 45-63. </ref>
−
- Low Knowledge about Users/ High Category Knowledge
+
  
−
- Low Knowledge about Users/Low Category Knowledge
+
<ref name="ASG M"> Robert G. Cooper & Anita Friis Sommer (2018) Agile–Stage-Gate for Manufacturers, Research-Technology Management, 61:2, 17-26, DOI: 10.1080/08956308.2018.1421380 </ref>
  
−
- High Knowledge about Users and Category
+
<ref name=" Agile"> White, K. R. J. (2008). Agile project management: a mandate for the changing business environment. Paper presented at PMI® Global Congress 2008—North America, Denver, CO. Newtown Square, PA: Project Management Institute. </ref>
  
−
- High Knowledge about users and Low category knowledge
+
<ref name=" Salvato"> Salvato, John J., and Andre O. Laplume. "Agile stage‐gate management (ASGM) for physical products." R&d Management 50.5 (2020): 631-647 </ref>
  
−
Each hybrid approach proposed is strongly linked to the company analyzed in the case study. However, the matrix proposes a possible approach to the challenges that may arise in each quadrant. The traditional predictive model (the Stage-Gate® only) is the perfect solution when the company has all the needed knowledge before the development process, following what the standard suggests. Generally, hybrid models are applied when some pieces of information are missing, confirming the standard’s guidelines. When the company has limited knowledge of customers’ habits, but the product concept is clear, a possible solution might be using a hybrid model. Design Thinking techniques are implemented in the ideation phase to empathize with the client and learn about his habits deeper than what a simple phase-gate model allows. When the company wants to explore new markets, and a whole new product has to be developed, design thinking is used in the ideation and in the concept phase, while lean startup gathers information about the unknown market in the business case. Finally, when the knowledge about the user is high but the company wants to develop a product that couldn’t be associated with existing categories, the Agile-Stage-Gate model is the chosen one, with agile elements in the development and testing. Iterations are useful to try different solutions and their impact on production or on sales, like packaging or pricing.
+
<ref name=" New Approach"> Cooper, R. G., & Sommer, A. F. (2016). The Agile–Stage-Gate Hybrid Model: A Promising New Approach and a New Research Opportunity. Journal of Product Innovation Management, 33(5), 513-526. https://doi.org/10.1111/jpim.12314 </ref>
  
−
Overall, the Matrix provides some benefits. It is a powerful decision-making tool that fosters an objective evaluation of the developmental approach for a given project. In this way, managers can reach an agreement on the methodology, avoiding plan changes on-the-fly. Moreover, the internal point of view of the matrix protects the company from uncertain financial estimations or inaccurate technological evaluations, supporting managers in the choice of what product to develop, and enhancing the innovation in the portfolio. Finally, the matrix gives HR managers a broad overview of what kind of techniques will be applied to the NPD, thus supporting them in the resource selection process. Those companies that cannot hire specialists in those areas could rely on “ad hoc consultancy”. (Cocchi et al. (2021))
+
<ref name="ScrumGuide"> K. Schwaber and J. Sutherland, "The Scrum Guide The Definitive Guide to Scrum: The Rules of the Game", Scrum.org, 2020. </ref>
  
−
== ''Limitations'' ==
+
<ref name="umbrella"> Laoyan, Sarah(2022) "What is Agile methodology? (A beginner’s guide)" 2022, https://asana.com/it/resources/agile-methodology </ref>
  
 +
<ref name="PMI"> Project Management Institute, Inc. (PMI). (2021). A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) – 7th Edition and The Standard for Project Management. Project Management Institute, Inc. (PMI). Retrieved from
 +
https://app.knovel.com/hotlink/pdf/id:kt012LZED4/guide-project-management/table-of-contents </ref>
  
−
Implementing agile practices in a non-software environment is an ambitious challenge, as it requires the ability to face different types of obstacles that may arise during the project life cycle. In addition to the economic effort, hybrid models can only be implemented if aligned with the organizational culture. (Cocchi et al 2021) A clear overview of the challenges and their respective possible solutions is given by Zasa et al. (2021) in their research about the contemporaneous presence of agile practices and traditional project management methods. There are three areas of interest when it’s time to implement agile in your company:
+
<ref name="Portfolio"> Robert G. Cooper & Anita Friis Sommer (2020) New-Product Portfolio Management with Agile, Research-Technology Management, 63:1, 29-38, DOI: 10.1080/08956308.2020.1686291 </ref>
  
−
- Integration: since the two methods are deeply different, a step-by-step process is more appropriate. One specific obstacle may be the definition of what to achieve at the end of each sprint. In a software context, it should be a product that, hypothetically, could be sold on the market, but physical products are completely different, and such a target is hard to meet. Workshops are the way suggested to enlarge the understanding of agile elements within managers and operational teams.  
+
<ref name="Scrum"> Endres et al. 2022, "Sustainability meets agile: Using Scrum to develop frugal innovations", https://doi.org/10.1016/j.jclepro.2022.130871 </ref>
  
−
- Culture: integrating agile is also a matter of culture. Agile foster horizontal communication, overcoming hierarchical barriers. This means that each team is more responsible for its own activities. This change should be accepted as a team but also individually, and a team reorganization is needed. The application of a contract to clearly state roles, responsibilities and way of work can make the process smoother and enhance the ability to work together, as well as the use of product design tools or tools for stakeholder management.  
+
<ref name="Brandl"> Felix J. Brandl, Moritz Kagerer, Gunther Reinhart, A Hybrid Innovation Management Framework for Manufacturing – Enablers for more Agility in Plants, Procedia CIRP, Volume 72,2018, Pages 1154-1159, ISSN 2212-8271, https://doi.org/10.1016/j.procir.2018.04.022.</ref>
  
−
- Perceptions: managers should clearly know the advantage of adopting a hybrid model for a project. Different approaches may misalign the expectations between managers and teams, because the “test-and-learn” method clash may not perfectly fit with the pre-established plan. Communication plays a key role in outlining new opportunities and giving a clear overview to decision-makers. In this way, it will be clearer to decide when to use a Stage-Gate, and when a hybrid model.
+
<ref name="StageGateProcess"> Cooper, Robert G., and Elko J. Kleinschmidt. "Stage-gate process for new product success." Innovation Management U 3 (2001): 2001.</ref>
  
−
''References''
+
<ref name="Cooper"> Robert G. Cooper (2016) Agile–Stage-Gate Hybrids, Research-Technology Management, 59:1, 21-29, DOI: 10.1080/08956308.2016.1117317 </ref>
−
----
+
  
−
# Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) The Hybrid Model MatrixEnhancing Stage-Gate with Design Thinking, Lean Startup, and Agile, Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1942645
+
<ref name="Previous">http://wiki.doing-projects.org/index.php/A_hybrid_consisting_of_Agile_and_Stage_Gate </ref>
−
#Abbas, N., Gravell, A.M., Wills, G.B. (2008). Historical Roots of Agile Methods: Where Did “Agile Thinking” Come From?. In: Abrahamsson, P., Baskerville, R., Conboy, K., Fitzgerald, B., Morgan, L., Wang, X. (eds) Agile Processes in Software Engineering and Extreme Programming. XP 2008. Lecture Notes in Business Information Processing, vol 9. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-68255-4_10
+
−
#Takeuchi, Hirotaka, and Ikujiro Nonaka. "The new new product development game." Harvard business review 64.1 (1986): 137-146.
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#Felix J. Brandl, Nina Roider, Martin Hehl, Gunther Reinhart, “Selecting practices in complex technical planning projects: A pathway for tailoring agile project management into the manufacturing industry”, CIRP Journal of Manufacturing Science and Technology, Volume 33, 2021, Pages 293-305, ISSN 1755-5817, https://doi.org/10.1016/j.cirpj.2021.03.017.
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#Sommer, Anita & Hedegaard, Christian & Dukovska-Popovska, Iskra & Steger-Jensen, Kenn. (2015). Improved Product Development Performance through Agile/Stage-Gate Hybrids: The Next-Generation Stage-Gate Process?. Research-Technology Management. 58. 10.5437/08956308X5801236.
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#S. J. Edgett, “Idea‐to‐Launch (Stage ‐ Gate) Model : An Overview,” Stage-Gate Int., pp. 1–5, 2015
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#Robert G. Cooper, Stage-gate systems: A new tool for managing new products, Business Horizons, Volume 33, Issue 3, 1990, Pages 44-54, ISSN 0007-6813, https://doi.org/10.1016/0007-6813(90)90040-I. (https://www.sciencedirect.com/science/article/pii/000768139090040I)
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#Cooper, Robert. (2008). Perspective: The Stage‐Gate® Idea‐to‐Launch Process—Update, What's New, and NexGen Systems*. Journal of Product Innovation Management. 25. 213 - 232. 10.1111/j.1540-5885.2008.00296.x.
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#WALRAVE, Bob, et al. Dysfunctional Agile–Stage-Gate Hybrid Development: Keeping Up Appearances. International Journal of Innovation and Technology Management, 2022, 19.03: 2240004.
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Latest revision as of 01:39, 9 May 2023

Contents

[edit] Abstract

The Agile-Stage-Gate model is a hybrid project management approach used in the development of physical products[1]. As the name may suggest, the model aims to merge two different, almost opposite models, the Agile frameworks and the Stage-Gate® (Stage-Gate® is a registered trademark of Stage-Gate Inc, www.stage-gate.com) to create a new flexible but structured solution[1]. Currently, gating systems are considered “too linear, too rigid, and too planned” (Edwards et al. 2020)[1]: generally, unable to keep up with the high degree of uncertainty that characterises modern projects. Agile methodologies (Scrum above all, but also other practices such as Design Thinking and Lean Startup) [2] can be embedded inside stages to deal with the contingencies of the project[1]. In practice, the Stage-Gate® continues to give the project a step-by-step path from ideation to the launch in the market, while Agile is applied as a tool in daily activities. According to the latest studies, the results from on-the-field experiences state that the Agile-Stage-Gate can improve the product development process in several ways, such as by making the design processes more flexible, achieving higher productivity, supporting better communication and collaboration in teams, and higher team morale [1]. Some studies also highlighted a higher success rate and a faster development process [1]. The model is applied by large companies such as Lego, Volvo [1] and Danfoss [3], and it has also yielded encouraging results in small-medium enterprises [1]. However, it poses new challenges to managers in allocating resources, building complete multidisciplinary teams [1], organizing meetings [1], and overcoming the skepticism of the management. Differently from previous articles on the same subject [4], this article not only aims to investigate the new hybrid approach's origins, nature, and functioning from its foundations, but it also will provide recommendations on when to use a specific hybrid model based on the latest scientific contributions. Furthermore, the article will report the most suitable metrics to evaluate Agile-Stage-Gate projects from a portfolio perspective. In conclusion, a brief reflection on the status quo of the developmental approaches against what the Agile-Stage Gate proposes, followed by the limitations of the model.

[edit] Why the Hybrid Model

[edit] Managing Innovation through the Stage-Gate®

In the second half of the 20th century, gating systems for project management spread all over the world and became a standard in riding the lifecycle of innovation projects, especially in new product development. One of the most famous gating systems is the Stage-Gate® model, formulated by Cooper in 1983 [1], a strategic management tool that gives a rigid and plan-based structure to the "idea-to-launch"[5](Edgett, 2015) process, alternating decision-making stations called Gate to operative Stage. A Gate is a set of expected results that must be met by the project leader to access the next Stage. The “exit criteria” vary from one gate to another, or from one project to another, but generally, they should be a set of benchmarks for the project's strategic, marketing, and financial aspects [5]. Initially, these standards are mostly qualitative, while they gradually become more quantitative in the final stages[6]. The evaluation of the current state of the project against gate criteria needs to be assessed by an experienced manager, whose knowledge plays a key role in the decision-making process. Management oversees the greenlighting of the heavy spending decision through the path and helps the team meet the deadlines. Furthermore, management's commitment and support are fundamental in aligning the project's development with the organization's objectives [5]. The evaluation of the deliverables in a Gate results in a Go/Kill/Hold/Recycle decision [5]. If the deliverables satisfy the exit criteria, the project can move on to the next Stage, “a set of required or recommended best-practice activities needed to progress the project to the next gate or decision point” (Cooper, 2008) [7]. In each stage, cross-functional types of analysis are carried out concurrently by multidisciplinary teams of individuals from different areas of the company[6], using traditional project management tools such as “Gantt chart, milestones, and critical path” [3](Cooper, Sommer, 2018). Since every stage has incremental costs, the knowledge acquired thus mitigates the risk. Each stage offers a broader vision and a more analytical perspective to decision-makers, who can evaluate the project using objective data rather than relying on intuitions [6]. An example of a traditional Stage-Gate® model introduced by Cooper in his article "Stage-gate systems: A new tool for managing new products"(1990) is reported below [6]:


Example of a Stage-Gate model ( adapted [8]).


  1. Preliminary assessment: Users’ feedback about the concept is gathered through quick research to evaluate how the product would be perceived by the customers [6].
  2. Definition: Customers’ preferences are deeply analyzed in this stage. Thus, the team can identify the basic principles of the future product and draft the first approximate financial and technical prospectuses. Here, legal matters are also considered[6].
  3. Development: the design of the product is finally developed, and all operative needs and processes are clearly defined [6].
  4. Validation: once the product is prototyped and ready to be produced, the company must test it to evaluate its quality. The customer plays a crucial role in helping the development team to understand if the usability of the product is by what has been stated in the previous stages. After the first tests, more information is available and can be used to improve the product and the production process. Furthermore, considering the new data, the financial prospect of the entire project can be reassessed [6].
  5. Launch: The product is finally launched on the market, and production can start [6].

[edit] The Agile-Stage Gate: need for flexibility

At the management level, the two questions “Are we doing the right things?” and “Are we doing things right?” are more and more present and require the review of existing strategic and operative plans [3]. In Stage-Gate®, a detailed product proposal is well-defined before starting a project, and project-related costs are evaluated and approved upfront. [3]. Moreover, in the traditional method, the team follows a sequential path based on a predetermined schedule and project blueprint, and the customer is rarely involved in the process[9]. This approach clashes with the dynamics of the current environment, which asks companies to be flexible and adapt to the market’s changes[9]. The traditional model has been criticised in several respects. Having project details fixed too early may require rework or compromises in later stages, with negative effects on the time-to-market and the quality of the output. Moreover, excessive bureaucracy makes the model too rigid. In general, gating systems are "not adaptive enough and do not encourage experimentation"(Edwards et al. 2019)[1]. For this reason, the hybrid Agile-Stage Gate approach gained interest among scholars and practitioners as a possible alternative that blends benefits from both models, thus balancing “discipline and agility” [10] (Brandl et al. 2018). Agile project management is a project management approach that handles complexity by iterative work on the product, adapting its features to the emergent business needs in the process [11]. Even if most of the agile frameworks had been developed during the second half of the 20th century, the Agile philosophy was officially formulated by a group of developers only in 2001, with the publication of the Agile Manifesto [12]. As affirmed by Abbas et al. (2008) a method, to be considered agile, should be “Adaptive”, “Iterative and Incremental”, and “People Oriented”[13].

  • Adaptive: ready to adjust the product, or the “method itself”(Abbas et al. 2008)[13], to what is needed after each iteration, based on technological advancements and feedback from previous iterations.[13]
  • Iterative and Incremental: in a software environment, the features of the product are defined iteratively, and incrementally improved. At the end of each iteration, the customer is involved in the evaluation to gather his opinions and ideas during the process.[13]
  • People Oriented: the Agile philosophy considers the method applied as a mere tool to support the team in delivering the best possible outcome. The role of people, both the team and the customer, is pivotal in agile philosophy. [13]

Generally, the Agile mindset is an “umbrella” that groups a wide number of frameworks, such as Kanban, Extreme Programming, Scrum, and others [14]. In the context of the Stage-Gate®, the Scrum framework seems to be the aptest to be fitted into the stages [15]. In a nutshell, Scrum is an agile project management methodology inspired by rugby that through time-boxed iterations(“Sprint”, usually lasts from 2 to 4 weeks) aims to create a certain improvement, called “Increment”, into the product in the development pipeline. At the end of each sprint, the outcomes are evaluated with relevant stakeholders in a review session (“Sprint review”). Stakeholder feedback helps the team to update the Product Backlog with new functionalities to be added in the next sprints. Then, the whole sprint is reviewed in a retrospective meeting (“Sprint Retrospective”), where the team discusses what worked well, and what did not, and identifies the key area of improvement for future iterations. [16][17]

Scrum Framework (adapted from [17])

The Scrum team consists of three main figures:

  • The Scrum Master, the team leader who helps members apply Scrum methods and practices in daily activities. The Scrum Master works on the interface between the team and the organization.[16]
  • Product Owner, who translates the stakeholder needs into achievable objectives, grouped in the Product Backlog. Moreover, The Product Owner is accountable for listing, prioritizing, and communicating the items in the Product Backlog to the team.[16]
  • Developers, the professionals who actually “create” the Increment. The Developers plan the Sprint together and work to meet the quality criteria defined in the Definition of Done, thus realizing an Increment.[16]

However, other Agile methodologies can be used to improve the existing product development roadmap, such as Lean Startup and Design Thinking [2]. According to Cooper and Sommer [15], in the first decade of 2000, some IT companies showed that the combination of the two models was possible. Firms in this field often aimed to develop a product that involved both software and hardware parts. The development of each of these two components was strongly connected to the other, and the processes were also linked to several different functions that had to be aligned to reach a common goal. These companies already applied their phase-gate and agile models to the development of new products. In this context, the traditional gating system fostered the communication inter-teams involved in the project and gave support to the project's sponsors. On the other hand, agile practices were applied to control and plan the daily project tasks, and keep track of the project advancements. The mix provided benefits and created new challenges, but generally, it proved that the coexistence of the two approaches was possible [15]. Nowadays, the hybrid model is relevant even for those companies that develop physical products. New technologies on the market allow teams to develop and test new ideas faster, reproducing working rhythms common in software development. In this context, the importance of agile arises even in the manufacturing world, and a new way of exploring new solutions is needed. (Cooper 2016) [18]. In practice, the Agile-Stage Gate model revolutionizes traditional project management in new product development. Gantt Charts, milestones, and critical path planning are replaced with agile practices and tools. [19] Inside each stage, the development process is divided into sprints, at the end of which the product should have gained an incremental improvement. [19] Differently from the traditional Stage-Gate®, a short-term planning approach drives the projects. [19] The merge of these two models gives the product development process a structured plan from a strategic side (Stage-Gate®) while providing enough degrees of freedom to adjust products and action plans along the way at the tactical and operational levels. [10] The product is developed through sequential iterations: at the end of each one, the team should aim to design a prototype ready to be presented to the client to gather useful feedback and plan the goal for the next iterations [19]. There is no common terminology to define the Agile-Stage Gate. Often, the “Agile-Stage Gate” label is used to refer to the Scrum-Stage Gate hybrid.

Agile practices in phases of the Stage-Gate® model (Adapted from[3])

According to Cooper and Sommers [3], the results for early adopters are encouraging. Chamberlain, a company operating in the field of home devices, applied the Agile-Stage-Gate to better coordinate the development of hardware and software components. They broke down each stage into different three-week sprints. The company achieved impressive results in terms of productivity and reduction of cycle time. Danfoss implemented sprints in the design and validation phases, with a 30% reduction of time-to-market. GE implemented a hybrid model in the development of aero-engines. The company used Lean Startup practices in two of its three-stage gating system (respectively Seed and Launch of Seed-Launch-Grow). They managed to halve the time required to test an engine. Honeywell, after the implementation of a tailored hybrid model, experienced positive effects on the internal culture and carried out successful pilot projects.[3]

[edit] Hybrid Models in practice

[edit] Traditional or Hybrid Model? The Hybrid Model Matrix

Cooper and Sommer, in their article “From Experience: The Agile-Stage-Gate Hybrid Model: A Promising New Approach and a New Research Opportunity” (2016), asked the question of “when to use Agile-Stage-Gate?” [15]. They suggested that the Agile Stage-Gate could be applied for radical and incremental product development[15]. Generally, the Agile-Stage-Gate seemed to work better in contexts with “high uncertainty and a great need for experimentation and failing fast”(Cooper, Sommer, 2016)[15]. However, answering the initial question may still be difficult. A study by Cocchi et al. (2021) [2] introduced a tool for project managers, the Hybrid Model Matrix, that aimed to make easier the decision-making process to choose the right model for the right project. The matrix has been defined as a result of a case study carried out on a firm in the food industry. This company applied hybrid models combining a six-phase Stage-Gate (Ideation, Concept, Business case, Development, Testing, and Launch) with different Agile methodologies, such as Scrum, Lean Start-up, and Design Thinking practices.[2]

Although the company applied the most recent techniques, it lacked a structured framework that could facilitate the decision on the appropriate methodology to be employed for a given project. The choice of the model depended on the management’s on-the-field knowledge and their ability to evaluate resources in conjunction with the project's financial return. [2]. The matrix states two important factors to be considered before the start of the process:

  • Knowledge about Users (KAU): this could be “wide” or “limited” and it refers to the point of view of the customers. “Wide” means that the company is aware of costumer’s tastes and preferences. The target is clear. On the contrary, when the KAU is “limited” it indicates a knowledge gap in understanding the customer’s need. [2]
  • Knowledge about Product Category (KAPG): this indicator includes a broad range of elements that define how is deep the knowledge of a company for a specific product. This involves the strategic relationship with stakeholders and market positioning. A product category can already exist or can be new. [2]


The Hybrid Model Matrix (adapted from Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) The Hybrid Model MatrixEnhancing Stage-Gate with Design Thinking, Lean Startup, and Agile, Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1... [2])


The Matrix consists of four quadrants, and each one suggests a possible project management model.

  • Low Knowledge about Users/ High Category Knowledge
  • Low Knowledge about Users/Low Category Knowledge
  • High Knowledge about Users and Category
  • High Knowledge about users and Low category knowledge

The matrix proposes a possible approach to the challenges that may arise in each quadrant. The traditional plan-based model (the Stage-Gate® only) is the perfect solution when the company has all the needed knowledge before the development process. [2] Generally, hybrid models are applied when some pieces of information are missing [2]. When the company has limited knowledge of customers’ habits, but the product concept is clear, a possible solution might be using a hybrid model. [2] Design Thinking techniques are implemented in the "Ideation" phase to empathize with the client and learn about his habits deeper than what a simple phase-gate model allows [2]. When the company wants to explore new markets, and a whole new product has to be developed, Design Thinking is used in the "Ideation" and the "Concept" phase, while Lean Startup gathers information about the unknown market in the "Business Case". [2] Finally, when the knowledge about the user is high but the company wants to develop a product that couldn’t be associated with existing categories, the Agile-Stage-Gate model is chosen, with agile (Scrum) elements in the "Development" and "Testing". [2] Iterations are useful to try different solutions and their impact on production or sales, like packaging or pricing.[2]

Overall, the Matrix provides some benefits. It is a powerful decision-making tool that fosters an objective evaluation of the developmental approach in each project stage. In this way, managers can reach an agreement on the methodology, avoiding later plan changes. [2] Moreover, the internal point of view of the matrix protects the company from uncertain financial estimations or inaccurate technological evaluations, supports managers in choosing what product to develop, and fosters innovation in the portfolio. [2] Finally, the matrix gives HR managers a broad overview of what kind of techniques will be applied to the NPD, thus supporting them in the resource selection process. [2] Those companies that cannot hire specialists in those areas could rely on “ad hoc consultancy”. [2]

[edit] Managing Agile-Stage Gate Projects: a portfolio perspective

The Agile-Stage Gate can be analysed on two different levels: the operational level, in which sprints are performed, and the strategic level, where the traditional stage-gate structure is kept to provide an adequate level of control on the project life-cycle.[12] Nevertheless, the two levels are not disconnected, but the adaptive, iterative approaches on the operational level impact how a project is evaluated at portfolio level. According to Cooper and Sommer [9], there are two common problems in new-product portfolio management: an overloaded pipeline, due to the incapacity of killing not-so-valuable projects, and the “lack of data integrity”(Cooper, Sommer, 2020)[9], which may also affect the go/kill decision-making process.[9] Consequently, the lack of reliable data in the “front-end homework” leads to poor evaluations in terms of the market’s needs, pricing, and final customers.[9] From this perspective, the Agile-Stage Gate keeps the existing structure and activities of the Stage. The difference from the previous model is the iterative and flexible approach to the development process, which through iterations allows increasingly reliable cost and market data to be collected, thus fostering a continuous evaluation/validation of the project.[9] Moreover, it encourages the engagement of management, because customer feedback can be reported to the senior management immediately, who can effectively evaluate the project in time and perform a go/kill decision before the project becomes too mature to be stopped. [9] However, integrating agile may bring out new challenges, because traditional project management methods for project prioritization can become senseless by the evolving nature of an agile project. [9] Cooper and Sommer, in their article "New-Product Portfolio Management with Agile"(2020)[9], suggest a set of metrics suitable to evaluate agile projects from an Agile-Stage-Gate portfolio perspective.


[edit] The Burndown Chart

The Burndown chart is an agile tool to track team progress. Usually, the chart is applied to a single sprint, but in the ASG it can be used to track the whole stage. At the beginning of each stage, the tasks to be done in the stage are grouped in a project backlog. Moreover, the total number of sprints needed before moving to the next stage is approximated. The final result is a “dynamic”(Cooper, 2020)[9] Burndown chart, where sprints needed and tasks in the backlog change during the process. The team's progress can be evaluated by looking at the number of remaining sprints, or by calculating the Proximity Metric:[9]

\text{Proximity Metric} = \frac {\text{Sprints Done}} {\text{Sprints Done + Estimated Sprints Remaining}}


Burndown Chart for Agile project managed in a Stage-Gate® Environment ( adapted from [9])

[edit] The Productivity index

The Productivity Index (PI) seems to be suitable for agile projects. It highlights how much value is produced by the work done, and it is calculated over time. The PI is calculated as

PI = \frac {NPV} {\text{Money remaining to be spent or Number of work days left to be done}}

An increasing PI Curve is a signal of a successful project. The PI also gives useful insights about overall productivity, thus fostering effective project prioritisation.[9]

[edit] Expected Commercial Value (ECV)

Among the existing tools, the ECV seems particularly suitable for agile projects, because it “provides a realistic financial model for handling incremental or stepwise investment in a new-product project, in the form of a decision tree approach that evaluates the investment a step at a time” (Cooper, Sommer, 2020)[9]. In ECV, it is possible to face two alternatives: one sprint and N sprints. In the first case,

ECV = (R \cdot P)-C ,

were

  • R = financial outcome expected from the project (usually presented as the current worth of the earnings expected to be received in the future)
  • P = probability of success
  • C= cost of undertaking the project

Starting from the assumption that each iteration requires the same amount of money to be invested, at N iteration the ECV is

ECV = R \cdot P - (C \cdot RMFactor)

where the RMFactor is

RMFactor = 1/N \cdot (1 - P)/(1 - P^{1/N})

The probability of success can be estimated with the Delphi Method, with the help of some experts in that field. The ECV yields several advantages, such as taking into account the ambiguous nature of agile projects, the “incremental nature of investment decision” (Cooper, 2020), and the dynamic value of success probability. It can also be used in project prioritisation with the PI.[9]

[edit] Strategic Buckets: dynamic budgeting for dynamic portfolios

A more frequent evaluation of projects against portfolio requirements increases the number of projects that come in and out of the portfolio during the year. Therefore, budgeting activities should also follow the dynamic nature of agile. In the Strategic Buckets systems there are four key phases:

  1. projects are categorized based on certain criteria, decided by senior management.
  2. In each bucket, projects are ordered based on their priority, usually defined by using the PI
  3. Finally, resources are allocated in each bucket from the top-priority project.
  4. Projects that are at the bottom of the list should be killed or paused, waiting for resources from other projects. Inside a bucket, a portfolio manager can allocate resources from one project to another based on gate decisions, priority lists, and resource constraints.[9]

[edit] Critical Reflections on Status Quo and ASG Limitations

The Agile-Stage Gate is a broad concept, that touches various aspects of project management. Firstly, from a project perspective, implementing Agile within each stage, or in some of them, modifies the overall developmental approach of the project. The PMBOK® defines a developmental approach as “the means used to create and evolve the product, service, or result during the project life cycle”(PMI, 2021)[20]. The traditional approach to product development is predictive and plan-driven, and it aims to mitigate uncertainty through a deep front-end analysis. [20]. The method is particularly effective when project requirements are clear at the beginning of the project, so “scope, schedule, cost, resource needs, and risks” (PMI, 2021)[20] can be considered non-variable during the project life cycle [20]. This is also confirmed by the study by Cocchi et al.(2021)[2], where the traditional Stage-Gate® was applied in a relatively stable environment. For some projects, this approach might not be optimal, because project features can evolve and even change radically during the project, therefore strictly adhering to initial evaluations may lead a project to fail [3].In this context, according to the PMBOK®, the most suitable approach for those projects when “requirements are subject to a high level of uncertainty and volatility and are likely to change”(PMI, 2021) [20], is the adaptive one [20]. Thanks to iterations, the outcome can advance incrementally, driven by evolving requests. The Agile-Stage-Gate may also utilise a hybrid approach, described as a mix of predictive and adaptive approaches [20]. Adopting a hybrid developmental approach is suggested when it is possible to break down the deliverables into different modules, when different teams can work on different deliverables, or generally in uncertain situations where project requirements are not clear and may be necessary to evaluate different alternatives.[20]. When a product is created with an adaptive approach and implemented with a predictive one, overall it can be considered a hybrid approach [20]. This specific condition could be associated with those models where Agile is used in only some (and not all) stages, as happens in the study of Cocchi et al.(2021) [2]. Despite its advantages, the Agile-Stage-Gate model also has some drawbacks too. According to Salvato et al.(2020) [21], the study revealed that one of the possible negative consequences of the model was the increasing cost of the project. The author suggested that it could be related to three key factors:

  • The merge of Agile and Stage-Gate® was not completely implemented, resulting in two-faced structures where the gating system and Agile worked together without harmony. In practice, the management continued to use the same old model without understanding the agile practices of the team, thus creating terminology obstacles at gate meetings and not completely recognizing the team’s needs. To have a smoother hybridisation process, more resources were involved [21]
  • Frequent demonstrations with physical prototypes involved resources for weeks, with a negative impact on project costs. Prototyping methods, such as 3-D printing, digital modeling, and virtual prototyping, can be used to accelerate the prototype definition. [21]
  • In the traditional gating model, resources can be shared among different projects. On the contrary, agile projects required a dedicated team, keeping the “off-peak time” not optimally used. In some cases, especially in “longer duration physical product activities”(Salvato et al. 2020), continuous sprints resulted in a high workload for team members, with detrimental consequences on their well-being. [21]

[edit] Annotated Bibliography

Robert G. Cooper, Stage-gate systems: A new tool for managing new products, Business Horizons, Volume 33, Issue 3, 1990, Pages 44-54, ISSN 0007-6813, https://doi.org/10.1016/0007-6813(90)90040-I

In this article, Robert G. Cooper explains in detail its Stage-Gate system, a plan-based approach to manage product innovation and deliver more and better products on the market. After a first introduction to the importance of product innovation, the article discusses why a gating system is necessary for product development, outlining its strongest points. Moreover, the article provides an example of the ideal 5-gate-5-stages Stage-Gate model, describing carefully the activities in each stage, the decision-making process, and the exit criteria at each gate. Overall, this article gives a broad overview of the Stage-Gate system.

K. Schwaber and J. Sutherland, "The Scrum Guide The Definitive Guide to Scrum: The Rules of the Game", Scrum.org, 2020.

Schwaber and Sutherland, in their Guide, describe completely the Scrum framework, a rugby-inspired project management model. Firstly developed in software development, its strengths have caught the attention of practitioners from outside the IT world, and today the approach is one of the most famous Agile methods for managing complex product development. in this Guide, all the key aspects of Scrum are presented: the underlying theory, its values, the key roles involve, Scrum events, and artifacts. In Agile-Stage-Gate, most of the implemented practices have their roots in Scrum, therefore the Scrum guide is a must-have when implementing the hybrid project management methodology.

Robert G. Cooper (2016) "Agile–Stage-Gate Hybrids", Research-Technology Management, 59:1, 21-29, DOI: 10.1080/08956308.2016.1117317

In this article, Cooper provides a general explanation of what a Hybrid Agile-Stage-Gate model is. The two models, the gating system and the Agile philosophy (especially in the context of the Scrum framework) are initially compared one against the other. Then, the author describes how to merge these two management models in the manufacturing world. Nevertheless, Scrum and Stage-Gate cannot be merged in their off-the-shelf version: some changes are needed to make the practices perfectly fit the context. Therefore, after describing the advantages of the hybrid mode, the author gives some recommendations on how to adapt the "Definition of Done" to different stages. Generally, the article is a good entry-level guide to better understand how the Agile-Stage-Gate may work in practice.

Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) "The Hybrid Model Matrix Enhancing Stage-Gate with Design Thinking, Lean Startup, and Agile", Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1942645

The article contributes to the discussion about the hybrid model by providing a tool, the Hybrid Model Matrix, to help practitioners in choosing the right model for a given project. The Matrix is built upon two main factors, the knowledge the company has about the users and the knowledge about the product category( in other words, if the product can be associated with existing categories or not). Based on these two factors, each quadrant of the Matrix suggests the fittest project management model. The article is also a good opportunity to expand the concept of Agile hybrid models as a broader concept, as it shows how other Agile-related methodologies, such as Design Thinking and Lean Startup, can be applied to product development.

Robert G. Cooper & Anita Friis Sommer (2020) New-Product Portfolio Management with Agile, Research-Technology Management, 63:1, 29-38, DOI: 10.1080/08956308.2020.1686291

Managing new projects in an Agile-Stage-Gate environment requires to re-design the way managers evaluate and keep track of the initiatives. In the context of new product development of physical products, the article by Cooper and Sommer offers innovative guidelines to manage agile projects. In the first part, the authors introduce the common problems of new product portfolios and explain how agile practices may provide benefits to the process. Then, they discuss the emerging challenges of agile projects, providing some useful metrics to support a better and more dynamic evaluation.

[edit] References

  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 EDWARDS, Kasper, et al. Evaluating the agile-stage-gate hybrid model: Experiences from three SME manufacturing firms. International Journal of Innovation and Technology Management, 2019, 16.08: 1950048.
  2. ↑ 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 Nicolò Cocchi, Clio Dosi & Matteo Vignoli (2021) The Hybrid Model MatrixEnhancing Stage-Gate with Design Thinking, Lean Startup, and Agile, Research-Technology Management, 64:5, 18-30, DOI: 10.1080/08956308.2021.1942645
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Robert G. Cooper & Anita Friis Sommer (2018) Agile–Stage-Gate for Manufacturers, Research-Technology Management, 61:2, 17-26, DOI: 10.1080/08956308.2018.1421380
  4. ↑ http://wiki.doing-projects.org/index.php/A_hybrid_consisting_of_Agile_and_Stage_Gate
  5. ↑ 5.0 5.1 5.2 5.3 S. J. Edgett, “Idea‐to‐Launch (Stage ‐ Gate) Model : An Overview,” Stage-Gate Int., pp. 1–5, 2015
  6. ↑ 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Robert G. Cooper, Stage-gate systems: A new tool for managing new products, Business Horizons, Volume 33, Issue 3, 1990, Pages 44-54, ISSN 0007-6813, https://doi.org/10.1016/0007-6813(90)90040-I. (https://www.sciencedirect.com/science/article/pii/000768139090040I)
  7. ↑ Cooper, Robert. (2008). Perspective: The Stage‐Gate® Idea‐to‐Launch Process—Update, What's New, and NexGen Systems*. Journal of Product Innovation Management. 25. 213 - 232. 10.1111/j.1540-5885.2008.00296.x.
  8. ↑ Cooper, Robert G., and Elko J. Kleinschmidt. "Stage-gate process for new product success." Innovation Management U 3 (2001): 2001.
  9. ↑ 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 9.11 9.12 9.13 9.14 9.15 9.16 Robert G. Cooper & Anita Friis Sommer (2020) New-Product Portfolio Management with Agile, Research-Technology Management, 63:1, 29-38, DOI: 10.1080/08956308.2020.1686291
  10. ↑ 10.0 10.1 Felix J. Brandl, Moritz Kagerer, Gunther Reinhart, A Hybrid Innovation Management Framework for Manufacturing – Enablers for more Agility in Plants, Procedia CIRP, Volume 72,2018, Pages 1154-1159, ISSN 2212-8271, https://doi.org/10.1016/j.procir.2018.04.022.
  11. ↑ White, K. R. J. (2008). Agile project management: a mandate for the changing business environment. Paper presented at PMI® Global Congress 2008—North America, Denver, CO. Newtown Square, PA: Project Management Institute.
  12. ↑ 12.0 12.1 ZASA, Federico P.; PATRUCCO, Andrea; PELLIZZONI, Elena. Managing the hybrid organization: How can agile and traditional project management coexist?. Research-Technology Management, 2020, 64.1: 54-63.
  13. ↑ 13.0 13.1 13.2 13.3 13.4 Abbas, N., Gravell, A.M., Wills, G.B. (2008). Historical Roots of Agile Methods: Where Did “Agile Thinking” Come From?. In: Abrahamsson, P., Baskerville, R., Conboy, K., Fitzgerald, B., Morgan, L., Wang, X. (eds) Agile Processes in Software Engineering and Extreme Programming. XP 2008. Lecture Notes in Business Information Processing, vol 9. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-68255-4_10
  14. ↑ Laoyan, Sarah(2022) "What is Agile methodology? (A beginner’s guide)" 2022, https://asana.com/it/resources/agile-methodology
  15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 Cooper, R. G., & Sommer, A. F. (2016). The Agile–Stage-Gate Hybrid Model: A Promising New Approach and a New Research Opportunity. Journal of Product Innovation Management, 33(5), 513-526. https://doi.org/10.1111/jpim.12314
  16. ↑ 16.0 16.1 16.2 16.3 K. Schwaber and J. Sutherland, "The Scrum Guide The Definitive Guide to Scrum: The Rules of the Game", Scrum.org, 2020.
  17. ↑ 17.0 17.1 Endres et al. 2022, "Sustainability meets agile: Using Scrum to develop frugal innovations", https://doi.org/10.1016/j.jclepro.2022.130871
  18. ↑ Robert G. Cooper (2016) Agile–Stage-Gate Hybrids, Research-Technology Management, 59:1, 21-29, DOI: 10.1080/08956308.2016.1117317
  19. ↑ 19.0 19.1 19.2 19.3 REIFF, Janine; SCHLEGEL, Dennis. Hybrid project management–a systematic literature review. International journal of information systems and project management, 2022, 10.2: 45-63.
  20. ↑ 20.0 20.1 20.2 20.3 20.4 20.5 20.6 20.7 20.8 Project Management Institute, Inc. (PMI). (2021). A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) – 7th Edition and The Standard for Project Management. Project Management Institute, Inc. (PMI). Retrieved from https://app.knovel.com/hotlink/pdf/id:kt012LZED4/guide-project-management/table-of-contents
  21. ↑ 21.0 21.1 21.2 21.3 Salvato, John J., and Andre O. Laplume. "Agile stage‐gate management (ASGM) for physical products." R&d Management 50.5 (2020): 631-647
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