TVP – Metric 40 Decision Gate Processes

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1. Metric Definition

Measures of the degree to which a formal decision process is applied at project decision gates, and the effectiveness of the decision process itself.
For the generalized case of a work process, such a metric is important to the management and improvement of the process. There are two important metrics: an objective measurement of the degree to which a formal decision process is applied; and a subjective rating of the effectiveness of the decision process.

a. Metric 1: Use of Decision Process

The use of a decision process is characterized by computing the proportion of programs (either budget or number percentage ) passing through the stage-and-gate process which has been subjected to a formal decision process at the last gate encountered.

b. Metric 2: Quality of Decision Process

The quality of the decision process is rated subjectively (on a scale of one to four) with respect to the primary dimensions of fit, attractiveness, and capability. A rating of four contains parameters which are precisely defined and are the objective basis for decision at the last gate. The parameters in a rating of three are well defined and are given primary consideration in the decision at the last gate. A rating of two consists of poorly defined parameters and receives limited consideration in the decision at the last gate. The lowest rating finds parameters are neither defined nor are given significant consideration in the decision at the last gate.

1. Parameters which define Fit (Attractiveness, Capability) are neither defined nor given significant consideration in the decision at the last gate.
2. Parameters which define Fit (Attractiveness, Capability) are poorly defined and received limited consideration in the decision at the last gate.
3. Parameters which define Fit (Attractiveness, Capability) are well defined and were given primary consideration in the decision at the last gate.
4. Parameters which define Fit (Attractiveness, Capability) are precisely defined and were the objective basis for decision at the last gate.

2. Advantages and Limitations

These metrics are subjective measures of what is intended to be an objective decision process. They are intended to drive the use of objective decision processes at the gates of a stage-gate innovation process. It should be recognized that the best R&D decisions may not be obtained by deterministic processes. It may be that a rating of three in the scale above is actually the optimum, when combined with excellence in subjective technical and commercial judgment.

3. How to use the Metric

This metric is relevant to a stage-gate innovation process in which go, no-go, turn-back, abandon decisions are made at each gate. Metric one measures the use of the process and metric two rates the quality of the decision process. Metric one may be computed by clearly identifying the formal decision process and by computing the proportion of projects subjected to it. Metric two requires a subjective evaluation by knowledgeable people.

4. Options & Variations

The best measure of the effectiveness of the decision process is the quality of subsequent results, for example, the proportion of projects surviving the subsequent gate, but that is retrospective. The current metric is intended to be prospective and focuses on the nature of the decision process.

5. Champions and Contacts

6. References

Van Remoortere, F., and Cotterman, R., 1993, “Project Tracking System Serves as Research Management Tool”, Research-Technology Management, 36 (2), March-April, 32-37.