ArticlePDF Available

Stage-gate and agile development in the digital age: Promises, perils, and boundary conditions

Authors:

Abstract

This articles is an introduction into a Special Issue (SI) on “Innovation in the Digital Age: From Stage-Gate to an Agile Development Paradigm?”. This issues explores whether traditional product development models such as Stage-Gate (Cooper, 1986, Cooper, 2008) are still fit for purpose in today's digital age or whether they are set to be widely replaced by agile approaches even in more traditional contexts. The basic idea of conventional models to organize innovation is that they see innovation as a deterministic process that can be planned ex-ante and then be executed and controlled. The idea is to de-risk the innovation process by including a number of go-or-kill decision gates, where projects are vetted against predefined performance indicators. In contrast, agile approaches are stochastic. They follow the understanding of an iterative planning cycle where the outcomes of one short phase of execution inform the design of the following stage, and so on. Uncertainty is discovered and addressed continuously during the execution process. Stage-gate aims at controlling uncertainty upfront, thus avoiding subsequent changes, whereas agile development focuses on adaptation and the accommodation of change throughout the development processes. Free download at https://doi.org/10.1016/j.jbusres.2019.01.063
Contents lists available at ScienceDirect
Journal of Business Research
journal homepage: www.elsevier.com/locate/jbusres
Stage-gate and agile development in the digital age: Promises, perils, and
boundary conditions
Stefanie Paluch
, David Antons, Malte Brettel, Christian Hopp, Torsten-Oliver Salge, Frank Piller,
Daniel Wentzel
School of Business and Economics, TIME Research Area, RWTH Aachen University, Kackertstr. 7, 52072 Aachen, Germany
1. Introduction
Some artists begin with careful plans, sketches, preliminary draw-
ings and even paintings before settling on one particular direction.
Claude Monet, for example, carefully planned and prepared his work to
coincide with specic natural light, timing his activity according to
when and how daylight touched his canvas (House, 2004). His work
was revolutionary: masterpieces such as his famous Impressions,Sunrise
and subsequent Water Lilies series were intended to capture the feelings
initiated by observation and interpretation; they exceeded the mere
recording of scenery details. Other artists seemed to obtain their in-
spiration internally, beginning with little formal preparation. They
approached the canvas experientially. Jackson Pollock adopted this
style with his famous drip paintings - action pieces that were acclaimed
to show motion, depicting accidents and energy.
Like artists, organizations striving for innovation seek to nd unique
combinations of resources with the goal of creating something new be
it new products, services, business models, or any combination thereof.
Importantly, though, organizations are multi-agent systems, with dif-
fering individual goals and with each agent's eort contributing to-
wards the overall purpose (Weick, 1974). Yet, organizing is a process
that is starkly dierent to (and should not be mistaken for) organiza-
tions themselves and is thought to dier widely depending on context
and across temporal dimensions.
Early work on organizing was inextricably linked to economic
production of material goods. Currently, and corresponding to our
dominant current driver of value creation today, a growing perspective
on organization looks into information technology (IT) and its role for
organizing, but also how actors in the IT industry are organizing
(Puranam, Alexy, & Reitzig, 2014).
If you went to bed last night as an industrial company, you're going
to wake up this morning as a software and analytics company.This is
how JeImmelt, Chairman and CEO of General Electric (GE), sum-
marized the disruptive changes triggered by the digital transformation
that hit virtually all companies. GE responded by creating GE Digital
and redening itself as a digital industrial companywith a focus on
digitally enabled products (Rigby, Sutherland, & Takeuchi, 2016). In
today's digital age, product development at GE and many other com-
panies around the globe increasingly involves - and indeed resembles -
software development. Over the last decades, the process of software
development has been shaped by the adoption of so-called agile de-
velopment methods such as scrum, extreme programming, or lean de-
velopment (Cram & Newell, 2016). These agile approaches take the
inherent unpredictability of software development into account and
advocate highly iterative, time-boxed development cycles owned by
self-organizing cross-functional teams that actively solicit and in-
corporate customer feedback at each iteration to improve the working
software as the dominant measure of progress (Beck et al., 2001).
It is against this backdrop that this Special Issue (SI) on Innovation
in the Digital Age: From Stage-Gate to an Agile Development
Paradigm?explores whether traditional product development models
such as Stage-Gate (Cooper, 1986, 2008) are still t for purpose in to-
day's digital age or whether they are set to be widely replaced by agile
approaches even in more traditional contexts. The basic idea of con-
ventional models to organize innovation is that they see innovation as a
deterministic process that can be planned ex-ante and then be executed
and controlled. The idea is to de-risk the innovation process by in-
cluding a number of go-or-kill decision gates, where projects are vetted
against predened performance indicators. In contrast, agile ap-
proaches are stochastic. They follow the understanding of an iterative
planning cycle where the outcomes of one short phase of execution
inform the design of the following stage, and so on. Uncertainty is
discovered and addressed continuously during the execution process.
Stage-gate aims at controlling uncertainty upfront, thus avoiding sub-
sequent changes, whereas agile development focuses on adaptation and
the accommodation of change throughout the development processes.
Table 1 provides a stylized comparison of the two development models
at the center of this Special Issue.
This Special Issue presents six research papers that address the
promises, perils and boundary conditions associated with agile product
https://doi.org/10.1016/j.jbusres.2019.01.063
Corresponding author.
E-mail addresses: paluch@time.rwth-aachen.de (S. Paluch), antons@time.rwth-aachen.de (D. Antons), brettel@time.rwth-aachen.de (M. Brettel),
hopp@time.rwth-aachen.de (C. Hopp), salge@time.rwth-aachen.de (T.-O. Salge), piller@time.rwth-aachen.de (F. Piller),
wentzel@time.rwth-aachen.de (D. Wentzel).
Journal of Business Research xxx (xxxx) xxx–xxx
0148-2963/ © 2019 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/BY/4.0/).
Please cite this article as: Stefanie Paluch, et al., Journal of Business Research, https://doi.org/10.1016/j.jbusres.2019.01.063
... We conclude by advancing a proposition for each of the routines. The model is illustrated in Fig. 1 Pagani (2013) suggests that digital innovation ecosystems are subject to dynamically shifting bottleneck positions-a process which can be associated with the value multiplicity of digital technologies . More specifically, as environmental conditions change and the ecosystem evolves, the locations of control points for value creation and capture within the ecosystem are likely to shift, too. ...
... The interim hardware prototypes also proved highly valuable in reducing the silofication of the various disciplines and departments engaged in the development process. More specifically, under its prototyping system, StreetScooter developed each interim hardware prototype to test different hypotheses about proposed solutions (Paluch et al., 2020). This allowed StreetScooter to focus on specific task requirements in each interim hardware prototype (Paluch et al., 2020). ...
... More specifically, under its prototyping system, StreetScooter developed each interim hardware prototype to test different hypotheses about proposed solutions (Paluch et al., 2020). This allowed StreetScooter to focus on specific task requirements in each interim hardware prototype (Paluch et al., 2020). The results of the ensuing discussions informed the subsequent development phase. ...
Article
While most previous research on orchestration of digital innovation ecosystems has examined governance structures, our knowledge of relevant dynamic capabilities remains abstract and lacks conceptual integration. This imbalance limits current knowledge to the extent that digital inno- vation ecosystem orchestration is mainly considered a structural issue. Based on a synthesis of related literature, we present a novel dynamic capabilities framework that builds on sensing, seizing, and reconfiguring capabilities for digital innovation ecosystem orchestration. We differentiate two major challenges addressed in orchestrating such ecosystems: component challenges and complement challenges. We propose six concrete routines that collectively help address these challenges. These include co-creating architectural knowledge, cultivating bound- ary objects, renegotiating system integration, screening complementors, co-specializing in- terfaces, and restructuring complementarities. We illustrate each of these routines with examples from the automotive sector. In addition, we sketch trajectories for future research both at the level of the individual routines and at the level of the overall framework.
... These conventional methods and practices are linear in nature, equipped for reactive rather than proactive NPD approaches. By strictly planning and explicitly setting the consumers' specifications and evaluation criteria up front (Antons et al., 2019;Cooper & Kleinschmidt, 2001;Kalluri & Kodali, 2014;Vinekar et al., 2006), these NPD methods bias and restrict the innovation space to the current market (whether mainstream or specific market segments). Only if the new product or concept complies and aligns with the up-front defined (current) consumers' demands, it will obtain a "go" decision and pass to the next "gate"; otherwise it will be discarded and considered a failure (Cooper & Kleinschmidt, 2001). ...
... Therefore, with the aim of integrating characteristics of both stage gate and agile methods in a single approach, well equipped for the dynamism of the current market and applicable in a wider context, recent research has increasingly turned its attention on hybrid methods (Antons et al., 2019;Brock et al., 2020;Conforto & Amaral, 2016;Cooper & Sommer, 2016a;Salvato & Laplume, 2020;Sommer et al., 2015). As way of balancing between an highly structured process of clearly defined and sequential phases (stage gate) and an extremely iterative and agile approach, hybrid methods are rapidly gaining ground in the business world and hold potential to significantly change the way we think about new product development (Cooper & Sommer, 2016b). ...
... The stage-gate methodology follows a plan-driven rationale. The essence is that by setting criteria up front (Antons et al., 2019;Cooper & Kleinschmidt, 2001;Kalluri & Kodali, 2014;Vinekar et al., 2006) and screening whether these criteria have been met from early stages of the NPD process, through a series of checkpoints for a go or no go decision, large investments can be delayed and optimized towards the most promising products (Cooper, 1990(Cooper, , 2008Cooper & Kleinschmidt, 2001). ...
... situationsadäquate Vorgehensweisen im IM zu finden. Während sich der klassische Ansatz und die dazugehörigen Methoden eher für exploitative Aufgaben und inkrementelle Veränderungen eignen, sind der agile Ansatz und die agilen Methoden oft für explorative Aufgaben und radikale Neuerungen die adäquatere Herangehensweise (Paluch et al., 2020). Im Hinblick auf die prozessübergreifenden Aspekte sind das Individuum und die organisationalen Rahmenbedingungen zu beachten. ...
Chapter
Full-text available
Zusammenfassung Kleine und mittlere Unternehmen (KMU) sind aktuell mit unterschiedlichen Veränderungen ihres Umfelds konfrontiert, auch durch die zunehmende Digitalisierung von Prozessen, Produkten und Geschäftsmodellen. KMU stehen hier vor der Herausforderung besonders innovativ zu sein, um sowohl inkrementelle als auch radikale Innovationen hervorzubringen und die Wettbewerbsfähigkeit zu sichern. Dies impliziert eine Weiterentwicklung des Innovationsmanagements, bezogen einerseits konkret auf den Innovationsprozess und seine Phasen und andererseits auf Rahmenbedingungen bzw. Voraussetzungen des Prozesses (prozessübergreifende Aspekte wie z. B. Strukturen, Kultur, Führung). KMU können zur Weiterentwicklung auf ein selbstorganisiertes Innovationsmanagement setzen; zentral sind hier individuelle Entscheidungskompetenzen der Mitarbeitenden für die Wahl adäquater Herangehensweisen im Innovationsmanagement – sowohl prozessbezogen als auch prozessübergreifend. Um dies zu unterstützen, wurde im Verbundprojekt InnoDiZ, bestehend aus drei Entwicklungspartnern und fünf Anwendungspartnern, eine Blended-Learning-Weiterbildung für Mitarbeitende in KMU entwickelt und erprobt, die sowohl prozessbezogene als auch prozessübergreifende Aspekte adressiert. Zentrale unterstützende Elemente bestehen in der Einbindung konkreter Innovationsprojekte der Teilnehmenden sowie der Ermöglichung eines firmenübergreifenden Austauschs. Der vorliegende Beitrag berichtet Erkenntnisse und Erfahrungen aus dem Projekt zu neuen Formen des Lernens in KMU, Austausch und Vernetzung sowie neuen Wegen für das Innovationsmanagement in KMU. Fallbeispiele der Anwendungspartner geben hierzu praxisnahe Einblicke. Schließlich werden Erfolgskriterien für die Weiterentwicklung des Innovationsmanagements aufgezeigt.
... Raff et al. (2020) points out another aspect that makes the coordinated development of the components of mechatronic PSS particularly complex is the different development time span of hardware and software. Paluch et al. (2020) recognise the potential of agile development of the software component, in which new features are frequently developed, tested and launched, but raise the question of how to coordinate the different requirements of long-lived hardware and frequently changing software. Similarly, Raff et al. (2020) raise the question of how the demands of long-lasting materiality and fast-paced software can be coordinated within a single firm. ...
Article
Companies nowadays have to deal with faster changing industries. To gain competitiveness companies have to provide offerings that are adding value for the customer, which can be achieved through a product-servicesystem (PSS). Therefore, this study aims at developing an integrated approach to develop all components of a PSS while including agile approaches to ensure customer-centricity. After a thorough literature research on the topics of PSS and agile methods was carried out, a reference model was developed which integrates the specificities of these two areas forming an integrated framework for agile PSS design. The result of this research is a reference model which includes crucial steps which are specific for the development of PSS and includes customers in almost all steps. Moreover, the framework orchestrates the development of hardware, software and services specifically for PSS.
Article
Full-text available
How firms drive innovation in digital transformation remains largely unanswered and this article is an attempt in that direction to deconstruct the digital innovation of small and medium-sized manufacturing enterprises (SMMEs) realizability condition and evolve the body of knowledge. We developed a TOE framework based on digital innovation theory to investigate the impact of the configuration effect of technology, organization and environment regarding the characteristic on a firm’s digital innovation. We performed fuzzy-set qualitative comparative analysis (fsQCA) on survey data collected from 141 SMMEs in China to examine configuration paths formed by different conditions. The results reveal that the success of a firm’s digital innovation practice is not driven by a single factor, but the result of multiple factors’ combined interaction, in which four sets of high digital innovation realization paths could be further summarized as “total factor driven”, “technology-environment oriented”, “organization-technology oriented”, and “organization oriented-environment”. These findings make sound theoretical and practical contributions to the usage of the TOE framework in the domain of developing a firm’s digital innovation. Bringing the SMMEs’ enlightenment is digital innovation, which is integral, systematic engineering, despite technology itself being the primary role of the whole process, more important is the organization’s agile strategy and digital positioning, as well as making full use of the advantages of the current environment for companies, thus better promoting the emergence and deepening digital innovation.
Article
Purpose The market's intense competition, the unpredictability of customer demands and technological advancements are compelling organizations to adopt new approaches, such as agile new product development (ANPD), which enables the introduction of new products to the market in a short span. The existing ANPD literature review articles are lacking in portraying recent developments, potential fields of adoption and the significance of ANPD in organizational development. The primary goal of this article is to investigate emerging aspects, current trends and conduct a meta-analysis using a systematic review of 177 ANPD articles published in peer-reviewed journals between 1998 and 2020. Design/methodology/approach The articles were categorized based on their year of publication, publishers, journals, authors, countries, universities, most cited articles, etc. The authors attempted to identify top journals, authors, most cited articles, enablers, barriers, performance metrics, etc. in the ANPD domain through the presented study. Findings The major themes of research articles, gaps and future trends are identified to assist academicians and ANPD practitioners. This study will benefit ANPD professionals by providing them with information on available literature and current ANPD trends. Originality/value Through meta-analysis, this study is one of the unique attempt to categorize ANPD articles to identify research gaps and highlight future research trends. A distinguishing feature of the presented study is the identification of active journals, publishers and authors, as well as enablers, barriers and performance metrics.
Chapter
The topic of process safety has many aspects depending upon site and location requirements. This chapter presents an overview of safety concerns from lab-scale operations through pilot plant and production operations. Each section will cover safety challenges and important issues at each scale of operation. Finally, please remember that the discussions in this chapter are, by the very nature of this book, general and do not, in any way, supersede site procedures, governmental regulations, or the like.
Article
The performance of agile development is variable, and the literature has not yet determined the mechanisms behind this behaviour. Agile teams may function as a sociotechnical system and these sociotechnical mechanisms may cause the performance variation. A configurational analysis determined that the presence of both agile technical and agile social subsystems was required for successful work outcomes, indicating that agile does operate as a balanced sociotechnical system. Individual agile components were also found to interact with and compensate for the absence of other agile components, confirming that the theory of constrained sociotechnical systems applies to agile development.
Article
Full-text available
OVERVIEW: Now that most companies have implemented a systematic new product process to drive projects from idea to launch, the best-practice companies are improving their processes to make them both faster and more effective. With breakthrough ideas and home-run projects in short supply, some companies are adding a Discovery stage to the front end of the process in order to generate better ideas. Activities in this new stage include: building in an idea capture and handling system; doing voice of customer research work, including “camping out” with customers and working with innovative users; generating scenarios; and holding major revenue-generating events. Best-practice companies are also harnessing fundamental research more effectively by implementing a novel stage-gate approach.
Article
Full-text available
Digital startups in the early stages of their development frequently undergo innovation to their value architecture and Business Model. A set of pragmatic methods drawing on lean and agile principles has recently been proposed to support digital entrepreneurs facing Business Model Innovation (BMI), known as Lean Startup Approaches (LSAs). However, the theoretical and practical relationship between BMI and LSAs in dynamic digital environments has seldom been investigated. To fill this gap, our study draws on an exploratory multiple-case study based on three digital multisided platform startups to craft a unified framework that can disclose the relationship between BMI, LSAs and Agile Development (AD), within the context of Strategic Agility. Our findings, which emerge from the unified framework, show that LSAs can be employed as agile methods to enable Business Model Innovation in Digital Entrepreneurship. These findings are then organized around a set of propositions, with the aim of developing a research agenda directed towards integrating BMI, LSAs and AD processes and methods.
Article
Full-text available
This exploratory study investigates the relationship of plan-driven Stage-Gate and flexible Agile models with new product development performance through an original conceptualization that focuses on their underlying principles for managing uncertainty and the resulting changes. While Stage-Gate attempts to control uncertainty up-front to avoid later changes, Agile seeks to adapt to uncertainty and accommodate changes for a longer proportion of the development process. In addition, we examine the interaction effects of combining the two models. The analysis of survey data on 181 software developers shows that the adoption of Stage-Gate principles is negatively associated with speed and cost performance. For Agile, the use of sprints is positively related to new product quality, on-time and on-budget completion, while early and frequent user feedback would seem to prolong time-to-market. Finally, the results highlight a nuanced interaction between Stage-Gate and Agile, both positive and negative depending on the principles considered.
Article
Full-text available
We take a microfoundational approach to understanding the origin of heterogeneity in firms’ capacity to adapt to technological change. We develop a computational model of individual-level learning in an organizational setting characterized by interdependence and ambiguity. The model leads to organizational outcomes with the canonical properties of routines: constancy, efficacy, and organizational memory. At the same time, the process generating these outcomes also produces heterogeneity in firms’ adaptive capacity to different types of technological change. An implication is that exploration policy in the formative period of routine development can influence a firm’s capacity to adapt to change in maturity. This points to a host of strategic trade-offs, not only between performance and adaptive capacity, but also between adaptive capacities to different forms of change.
Article
Despite growing research on front-end indicators, the understanding of the evaluation of innovative ideas in the early stages of the innovation process within a company remains limited. A reason for this might be a lack of data on front-end evaluation. This paper investigates existing theoretical and new indicators in terms of their importance and practical applicability in the industry. This study follows a qualitative empirical research design, using a new dataset based on 32 interviews with experts conducted in six international automotive original equipment manufacturers (OEMs). To improve generalization, the perspectives of volume, premium, and entry-level manufacturers are included. The four most relevant indicators are high customer relevance, strategic fit, high communication potential, and vision potential. The data suggest the need for more flexible and faster front-end evaluation approaches. The findings enhance the quality of innovation decisions by presenting novel insights into innovation evaluation at the front end.
Article
Developed economies have seen a shift in economic value away from the production of material goods and toward the production of information-intensive offerings. The process of innovation has evolved in parallel, from staged and gated approaches to agile and iterative processes. Agile innovation models developed in software and technology industries have generally stayed within them, thus applicability of these newer models of innovation to information-intensive market offerings has been limited. We use the paradigm of authorship to provide insights into the evolution of information-intensive offerings and subsequently into the requisite evolution of innovation processes. We demonstrate that agile methods are appropriate for a variety of industries and outputs, and furthermore that more gated and hybrid models of innovation are still relevant in the information economy. To conclude, we discuss how various models of innovation and authorship can be applied by the firm, based on managerial objectives and control.
Article
Recognizing a serious lack of research on routinized individual actions and organizational adaptation in the stability-change paradox, we intend to provide an in-depth explanation of the way in which agile methods affect organizational learning in self-managed, team-based organizations, taking a multi-level evolutionary approach. We explore learning in agile organizations by breaking the analysis of organizational routines down into different levels – individual, team and organization – and describing the process of variation, selection and retention of routines at each level. Leveraging on multiple case studies, we discuss how team members learn and gain knowledge, from both direct and indirect experience, and analyze how teams develop conceptual frameworks and interpret those experiences. Finally, we discuss how organizational memory develops and how teams in agile organizations adapt simultaneously within an ecological structure that also comprises the changing environment. Our findings reveal substantial flaws in the capacity of agile methods to foster organizational learning.
Article
In this study, we examine three under-explored dimensions of the temporal relationship between formal written business plans and the achievement of new venture viability. First, we theorize and investigate the effects of plan sequencing; arguing that a business plan written early on in new venture development increases the prospects of venture viability. Second, we examine plan duration effects, and argue that there is a curvilinear relationship between spending time on a plan and achieving venture viability. Finally, we investigate plan intraentrainment effects (synchronization with other gestation activities). We theorize that if plans are synchronized with other gestation activities, venture viability is more likely. Using longitudinal data and controlling for truncation and endogeneity issues, we find that it is beneficial to plan early but that this is contingent on how long a founder spent on a plan and whether or not a plan is intraentrained with other gestation activities. This article is protected by copyright. All rights reserved.