Quality Money Management : Process Engineering and Best Practices for Systematic Trading and Investment

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immediately, that system ’ s time-to-market will be reduced. If management stops develop-

ment of a trading/investment system, it can quickly reallocate resources to other more

promising projects. For active firms, we recommend that gate meetings happen once

every month or so, or at least as often as necessary to set and reset priorities.

The objective of a gate meeting is to obtain development approval and allocate

resources, so everyone who has a say in these matters should be invited, including all the

members of the product team and top management and any external seed capital provid-

ers. At some firms, a cross-functional product approval committee fulfills the manage-

ment function at gate meetings. At others a peer group fulfills the role. With respect to

gate meetings, responsibilities of the product team represented by the team leader are to:

● Provide deliverable materials to management at least a few days before the meeting.

● Keep the presentation brief and to the point. We recommend 15 to 20 minutes fol-

lowed by 30 to 45 minutes of discussion.

● Use document and presentation templates so management understands the structure

of the presentation.

● Make the recommendation and supporting data the core of the presentation.

● Be specific about resources required and how they will be used.

● Articulate clearly what help the product team will need from management to elimi-

nate project risks.^4

Responsibilities of top management with respect to gate meetings are to:

● Be prepared. Read presentation materials before the meeting. Start on time.

● Only ask clarifying questions during the presentation.

● Stay on target with the discussion. Only ask questions relevant to the stage and that

the development team is able to answer.

● Make sure every decision-maker is heard from and their position made clear.

● Make sure that back-door decisions do not circumvent the meeting process.^5

The rules of the gate meetings are that top management cannot request information beyond

that specified in the deliverables and must make their decision based on the criteria for that

gate. At the gate meeting, the product team should ask management (or seed capital investor)

to sign off on the Stage 1 results as well as the interpretation of those results.

12.1.1. Meeting Format

Gate meetings are systematic reviews of design and development performed in accor dance

with planned arrangements to evaluate the ability of the results of the trading/invest-

ment system to meet requirements and to identify any problems and propose necessary

actions. This is intended to prevent design and development from being done in an

unstructured, uncontrolled fashion.

Well in advance of the meeting, management should notify all interested parties about

which trading/investment systems will be discussed. This allows everyone to give their

input well in advance. The objective is not to spring new trading/investment ideas in the

meeting, but to give people time to think about them.

12.1. RUNNING A SUCCESSFUL GATE MEETING