Project Stage Gates – The Safety Zones in Projects

The Project Management Institute (PMI) define project stage gates as, “key points in a project where a formal review of the project’s current state is performed.“

Stage gates are the official demonstration of control points during a project lifecycle, which are usually event-driven. They also support an opportunity to stop or hold the project should circumstances have changed.

They can also be interpreted as safety zones in our projects. When we think about safety, we ’re looking for protection from danger, risk, or injury.

In the project management context, project stage gates help project boards answer some of the following questions:

• What have we achieved so far?
• Do we know what is required for the next phase?
• Do we have what is required? How confident are we?
• Has the environment or our attitude to this activity changed?
• Is it on track to deliver its expected benefits?
• Should we continue?

When considered here having a stage gate process is logical and makes sense. However, it is often difficult for PMO teams to successfully implement something workable. This could be down to several reasons.

Reasons why implementing stage gates can be difficult

Common reasons for why we might struggle with the implementation of a stage gate process include the following:

• We’re trying to implement too much too soon
• We haven’t worked with our PMO customers to create a solution that works for everyone
• We don’t understand the full value of stage gates and therefore neither do delivery and leadership teams
• Results from stage gates aren’t used for effective decision making

Post implementation, there are more reasons why it is challenging to successfully embed and maintain a process of this kind. Some of the more common challenges are detailed below.

1. The gates are always open: without robust controls, the gates are left open, and projects are never stopped. There might be several reasons for this, but the most common relates to the fallacy of the sunk cost: “we’ve spent so much money and effort so far, we can’t stop now.” As PMO professionals, we must not fall into the trap of sunk costs. Take a look at the brave example from Lidl, which stopped an SAP implementation project after burning 500 million on it already.
2. Thinking that a stopped project is a failed project: another reason that stage gates aren’t respected is based on our expectations and how these are perceived by the organization. This can lead to many projects always receiving a result of “pass with recommendations.” If a project is stopped at a gate, the organization and team should not perceive it as a failure but instead, as a sign that the organization is being effective in managing its resources. Allowing a project to proceed despite knowing that it no longer offers the benefits is not just a matter of inefficiency but also a reflection of poor professionalism since these resources (people, money) could have been spent in other projects with higher chances of success.
3. The gate is just a tick box exercise: if the project stage is evaluated through a standard checklist each time, then it’s missing the point of the process. The gate should enable a holistic and critical review of the project that could allow the project to come out of the stage stronger and more prepared for the remainder of its journey. Checklists are useful as prompts but should enable the conversation and should demand analysis, reflection, and proper thinking.
4. There are very few or too many stage gates: having the right number of gates, and the right focus on each of them is also important. If the only stage gates you have are at the beginning and at the end of the project, you might as well not have them at all since it will be too late to act on any troubled project. Similarly, having too many for the sake of introducing control points can be inefficient and slow down the project. Additionally, where the stage gates are placed also matters: we often see organizations who have loaded stage gates in the initial stages of the project (typically linked to budget releases) but then follow up with nothing during delivery?
5. Submarine projects finally emerge to the surface: they can be very effective. However, if the only time you hear about a project is at a stage gate, something isn’t right. We call these ‘submarine projects.’ Occasionally, they emerge at a stage gate, the surface, to provide us with an update. Effective project governance and assurance should be visible throughout the project.

Where stage gates come into play

A simplified version of the use of stage gates is depicted here as yellow diamonds.

Stage gates are typically organized for the end of each phase of project development or product delivery. In simple terms, we stop the project at pre-agreed points, review progress, look to the future, and get approval to proceed to the next phase.

Stage gates exist in a variety of forms, including as a PRINCE2© principle, ensuring that there’s continuous justification for the project to proceed. Typical characteristics can be seen here:

Stage gate tooling

Often there are templates and checklists that guide the conversation in all types of reviews. These tools have a set of indicative themes and questions that should ensure the reviewer covers all the required aspects in order to provide confidence that everything is in order and should change for each phase of the project.

It’s important that (as mentioned above) that the checklist is not perceived as the only deliverable. Any checklist should ensure that all the key themes are addressed, but critical thinking should still be prioritized.

Where the stage gates are mandatory and require some type of formal approval, the tooling is often ‘smart’ in that it provides a view on the result so that any gaps can be filled in ahead of time.

Stage gate results

A ‘Yes, please continue’ is not always the answer to a stage gate. The process is designed to critically review the project, its anticipated benefits, and the environment in which it resides.

When considering the context, responses can (and should) include:

It’s this ability to respond to the current state of the project that makes stage gates the safety zone for projects. They allow an informed conversation to take place and projects to move to closure at the right point, thus avoiding:

• Unnecessary changes that won’t bring benefit to the organization
• Spending money in the wrong places
• Demotivation of teams who know they’re likely to fail
• The disillusionment of teams when an unnecessary change is forced into the organization

Stage gates helping stop projects

The PMO Perspective

As a PMO professional, the team must design an approach to stage gates that is proportionate and works for the nature and complexity of the projects that are delivered. Consideration should be taken to:

• Scalability: how big or small are our projects? It is important to identify upfront the level of governance that projects are going to need to be successful. This allows for a pragmatic view of how stage gates can fit into the wider project management methodology.
• Stage gate focus: just as projects change their focus as the phases of projects move on, so should the stage-gate tooling. Having a standardized approach to the end of each phase brings the risk that important timely activities or questions get missed. For example, if financial approval is important at the start, chances are it isn’t towards the end.
• Mandatory or Optional: not all stage gates need to be mandatory for every project. Just like the focus changes, it may be that some projects can move ahead with less rigour than others (for example, an maintenance and repair project is less likely to need full business case justification and approval as it simply needs to be done). Consider the concept of self certify and peer review gates for some of the steps, reducing both the load on the PMO review team and increasing accountability and collaboration within teams.

The project manager perspective

Are you approaching a stage gate? Here are some practical tips for you.

1. Work with your PMO: use the PMO as your critical friend, someone with whom you can test yourself in preparation for the actual stage gate. The PMO will be happy to do its analysis and provide recommendations.
2. Prepare, prepare, prepare: do not leave it until the end. Instead, start preparing your Stage gate from the moment the gate initiates – that will ensure that you don’t have to rush to get your project ready last minute.
3. Manage expectations: work with the Project Sponsor and project board in preparing your project for the gate. There shouldn’t be any surprises to them. You are not alone.
4. Be transparent: no one likes to be the messenger of bad news but sometimes this is necessary. Always be transparent and honest about the actual situation of the project and, if you need help, don’t be afraid to ask for it.
5. Relax: stage gates (and their reviewers) are not monsters and they exist to support the project, not to get rid of it without a reason. They are a natural moment of the life of the project. Use that opportunity to show that you have it under control. Be brave, relax, shine. You’ve got this.

Frequently Asked Questions

Should we implement stage gates from the start?

When organizations are on the first steps of project management practices, it is important to take a view on maturity and design an approach that is going to help teams get to the next level of maturity.

A typical example is:

Are all stage gates required?

No. As part of the wider project assurance concept, stage gates should be applied proportionally. This means that we should acknowledge that not all projects require all stage gates or reviews; instead, we should look at each project on its own merit to understand what it needs in order to be successful.

This is as true for assurance, gates, and governance arrangements as it is for selecting project methodologies.

Are stage gates exclusive to waterfall (or traditional) methodologies?

No. The APM also references the concept of Agile Stage Gate Hybrids offering linear and iterative combinations in the context of innovation projects.

The APM Body of Knowledge 7^th edition references the article The Next Stage of Product Development, 2016, which advocates that combining stage gate philosophy with more iterative and Agile working practices can offer direct benefits in terms of both processes and the resulting outcomes.

This approach is a great way to blend approaches but also provide safety zones and control points at critical parts of development allowing for a more conscious decision-making process where organizations want to be more Agile, but also enjoy the predictability of waterfall practices.

In Summary

Safety zones are important, in projects and in life.

The human condition means that we automatically look for safety zones when it concerns our well-being, safety, and risk avoidance. Organizations (and teams) often do not place the same amount of attention on keeping projects safe.

This is one of the reasons why so much investment is lost on projects, and why the vast majority do not deliver their anticipated benefits.

To deal with this problem organizations and teams need to be brave, and implement safety into their projects through a stage gate process that allows the right amount of oversight for each project, enabling it to succeed (or successfully close) in a transparent and supportive way.

Are you sponsoring a project and considering using stage gates? Check out our other article, How to Be a Successful Project Sponsor, for even more tips on how to help a project succeed.