Gate Reviews That Add Value: Lessons from a Realistic Project Scenario
A phase gate review (also called a stage gate review or decision gate) is a structured decision point at the end of a project phase where the project's governance body -- typically a steering committee or project sponsor -- reviews the completed work, assesses whether the project is still viable and on track, and authorises (or declines to authorise) progress to the next phase. Gate reviews are a core component of many project management frameworks, including the Project Management Institute's PMBOK Guide and the UK Government's Green Book.
In 2022, with capital project costs increasing due to inflation and supply chain disruption, the case for rigorous gate reviews -- genuine go/no-go decisions that can stop a project that is no longer viable -- is strong. But in many organisations, gate reviews have become a rubber-stamping exercise that adds time without adding scrutiny. Here is a realistic scenario that illustrates the difference.
The Scenario: Two Projects, Two Gate Review Cultures
Consider two infrastructure projects of similar scale and complexity. Both have gate reviews built into their governance framework. Project A's gate reviews are scheduled 6 weeks in advance, the gate documents are circulated 2 weeks before the gate, and the gate meeting itself is 90 minutes. The gate document is a 45-page status report that updates the previous 45-page report. The steering committee members have 15 other commitments and read the executive summary on the morning of the gate meeting. The gate is approved in 20 minutes.
Project B's gate reviews are also scheduled 6 weeks in advance. The gate document is a 10-page decision brief -- not a status update -- that answers three questions: (1) Is the project still viable? (2) What is the expected cost to complete versus the expected benefit? (3) What are the three most significant risks and are they manageable? The steering committee members are expected to come prepared with questions, and the gate meeting is structured as a challenge session, not a presentation. The gate takes 2 hours because difficult questions get asked and answered.
What Made Project B's Gates Effective
The gate document was a decision brief, not a status report. A document designed to inform a decision is different from a document designed to report activity. Project B's brief forced the project team to synthesise the project's current position into a clear case for or against continuing.
The governance body was prepared to say no. Project A's steering committee had never declined to approve a gate in its history. Project B's had declined twice and had requested a one-month extension on three other occasions. A gate review body that always approves is not exercising governance -- it is processing paperwork.
The gate reviewed current information, not the original business case. A gate review that compares current project performance against the plan approved at initiation will always look acceptable -- the plan was set before any of the project risks materialised. Project B's gate reviewed the expected cost to complete and the expected benefit based on current conditions, not original estimates.
XNM provides project management advisory services to public-sector and capital-project clients, including gate review design and governance frameworks. Reach out to XNM's program & project delivery advisory team to discuss gate review effectiveness and project governance for your project.