Do you understand how Agile and Lean can work together with Stage-Gate? Is agile, lean or stage-gate the best methodology for your business?

It is fair to say that the time for effective innovation management is now. The need to ensure resources are not wasted and sound projects are pursued judiciously in this current climate is paramount.

Too often, we see companies choose innovation methodologies with an “all or nothing” approach. The pendulum has swung toward Lean and Agile methodologies, sometimes casting Stage-Gate® aside. Optimal results are derived from the best of BOTH worlds as part of an integrated best practice innovation toolkit.

There are two primary goals of effective innovation management:

1. Doing the Right Things, and

2. Doing things Right

For an effective innovation management approach, key issues must be addressed.

• Effective Integration between Business and Innovation Strategy This defines strategic arenas of innovation opportunity, or focus, which matter significantly to your customers.

• Effective “Voice of the Customer” and Consumer Insight Method Ensure the alignment of new products and services with unmet customer needs.

• Effective Ideation Methods Capture Define product and service opportunities within each strategic arena, then evaluate and prioritize these against portfolio objectives.

• Effective Long-Range Strategic Roadmapping Connect the business, innovation and technology strategies on multiple dimensions.

• Effective Portfolio Management Methods Establish and monitor the relative innovation investments in each strategic arena – your portfolio imperatives.

• Effective Stage-Gate Methods Apply the Go/Kill/Hold/Recycle decisions to prioritize your investments in the innovation funnel.

Adopting Agile …

The greatest variance between Agile methodology and gated innovation management relates to the development of product and service specifications. Traditional gate-based development methods – such as Stage-Gate and Phase Gate – advocate the creation of a detailed product charter or integrated product definition. The emphasis in this approach is on the clear and full definition of the product BEFORE development begins.

In an Agile world, emphasis shifts toward the high-level definition of the “what” and “why” dimensions of the product specification, rather than the “how.” Iterative, fast-paced development explores the best methods of “how” to best deliver the desired functionality and “how” to best meet the customer need. Frequent, iterative consultation with the customer is used to ensure alignment of the developed solution with the customer need.

A key advantage of spiral development methods – including Agile – is that the iterative development process is well suited to areas of increased uncertainty, higher technical risk and complex development projects. Lean is both a philosophical and a tactical approach to product and service innovation. At its core, Lean has two primary objectives:

1. Maximizing Value, and

2. Minimizing Waste

A key advantage of spiral development methods – including Agile – is that the iterative development process is well suited to areas of increased uncertainty, higher technical risk and complex development projects.

Introducing Lean…

In practice, Lean product development is mostly applied at a tactical level; in conjunction with the Stage-Gate methodology, it applies primarily to the way development work is completed within the stages.

One of the common mistakes in Stage-Gate implementation is to blindly adopt the five-stage process for all businesses and for all projects. Processes need to be aligned to the level of risks in projects. While “new to world” or “new to company” projects may require the rigor of a five-stage process, for other initiatives this is not always the case.

A common goal of both Lean product development and effective Stage-Gate management is to kill weak projects and to divert resources to stronger projects which maximise the value of the innovation pipeline.

Researchers Boehm and Turner have identified that “future projects will need BOTH agility and discipline, which can be implemented by containing the Agile development model within the gate model.”

In seeking the “best of both worlds,” Karlstrom and Runeson have identified key issues for more effective development methods involving Agile:

• Involve developers early in the product development

• Adapt the project planning to accommodate for Agile micro planning in combination with macro project planning

• Identify critical feedback loops and make these as short and fast as possible

• Strive to make an early version of the actual product as quickly as possible using technical tools for technical coordination

• Make the customer-developer roles and interactions as clear and effective as possible

• Work chiefly with management attitudes to accommodate uncertainties

In summary, there are benefits of integrating Agile thinking into traditional Stage-Gate models. Key issues must be addressed to derive the key strengths from both processes. The biggest mistake is to focus on which tool is best rather than on when to use each tool and in what combinations to optimize business outcomes.

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Want to discuss your Innovation Portfolio Strategy and identify the holes?

Contact Prodex Managing Director and Senior Innovation Consultant, Gerard Ryan [email protected]