The selection and completion of enough projects to improve an organization is often a matter of survival for executives. Witness the statistic that from 1992 through mid-1996, 163 CEOs of the Fortune 500 were fired.2 Executives use projects as a primary means to meet their goals. Therefore, we can assume that many of these CEOs were unable to complete enough projects successfully in the measurement time period to keep their jobs. In trying to meet their goals, executives often describe three major challenges in project management:

• Choosing the right projects from among a large pool

• Getting each project to completion more quickly

• Funneling more projects through the organization without adding resources

1. Chapter author Gerald I. Kendall, PMP, VP, International Institute for Learning, Inc., email [email protected], 850-936-0003.

2. USA Today, April 22, 1997, Page B1, "Turnover at the Top."

Critical Chain is a project management methodology designed to address the latter two goals. Critical Chain is based upon a general improvement methodology called the Theory of Constraints, which addresses the first executive goal—choosing the right projects. Choosing the right projects is part of strategic planning, which is discussed in depth in other books.3

As executives attempt to release new projects into the organization, they often hear complaints that people are overloaded. Inevitably, they face a conflict between moving resources to the new project and allowing resources to continue working on existing projects. People in the organization may also urge the executive to delay the start of the new project while the executive feels compelled to move ahead.

Most executives accept this conflict as a fact of life. They believe that their role is to push people as hard as they can to perform to high standards. As a result, the reaction of many executives to the resource conflict is to demand that existing projects be finished earlier so that their new projects can begin sooner. These demands leave project managers with their own huge conflict. In order to finish a project sooner, most project managers find that they are forced to either reduce scope or quality or add resources, which will exceed the budget. None of these alternatives is acceptable to executives.

The resulting behavior, which is now prevalent in many organizations, is the fodder for a new approach called Critical Chain Project Management. When project and resource managers fail to convince executives to delay the start of a new project, they often take three actions that lead to many other negative effects:

• Multitasking of resources

• Working toward cutting task estimates

• Managing people very closely to ensure that they meet their due dates

Since executives are a major part of the system of projects inside organizations, Critical Chain recognizes that executives are part of the problem. To solve the problem and have a major impact on project results, executives must therefore be part of the solution.

The Critical Chain solution to scheduling and managing projects was derived from a methodology called "The Theory of Constraints." Dr. Eliyahu M. Goldratt is the individual most often credited with the creation and advancement of this methodology over the past twenty-five years. To derive the Critical Chain solution, Goldratt applied the five focusing steps, identified in his writings.4 These steps are:

1. Identify the system's constraint.

2. Decide how to exploit the constraint.

3. Subordinate everything else to the above decision.

4. Elevate the system's constraint.

5. If, in a previous step, the system's constraint has been broken, go back to step 1.

Within any project, the Critical Chain is defined as the longest chain of dependent events where the dependency is either task or resource related. This definition assumes that the longest chain is the one that is most likely to impact negatively the overall duration of the project. The Critical Chain is not necessarily equivalent to the project duration since, sometimes, there are noncritical tasks that begin before the Critical Chain tasks begin.

3. See Gerald I. Kendall, Securing the Future, Strategies for Exponential Growth Using the Theory of Constraints (Boca Raton, FL: St. Lucie Press, 1998).

4. Eliyahu M. Goldratt, Theory of Constraints (Croton-on-Hudson, NY: North River Press, 1990).

The Critical Chain solution recognizes the Critical Chain as the leverage point for reducing the project's duration. The first focusing step, identify, recognizes that managers put practices into place that block the reduction of the Critical Chain. The exploit and subordinate steps implement changes to condense the Critical Chain (in other words, to shorten the amount of time it takes to complete a project).

Critical Chain implements major behavioral changes in project managers, resource managers, team members, and executives. The only way that so many people in an organization can accept such fundamental changes is through a deep understanding of the current behaviors, the new behaviors required, and the benefits. This is usually accomplished through education of executives, project managers, resource managers, and team members, followed by policy and measurement changes. These changes include:

• An end to the practice of measuring people in any way on the accuracy of their estimates

• An end to the practice of measuring people on meeting due dates for individual project tasks

• A replacement of the above two practices by "the relay runner work ethic," explained later in this chapter

• A system, agreed to by all executives and senior managers, of allowing new projects to start only when a "strategic resource" is available

• The recognition of the need to strategically protect projects from task time variations, by using properly placed buffers. This imbeds the philosophy of W. Edwards Deming, the great quality advocate, regarding the handling of "common cause" and "special cause" variation and predictability.

• The significant reduction of the practice of multitasking by moving toward dedicated work on project tasks

• The implementation of multiproject software with the data actually being used by executives, resource managers, and project managers. Critical Chain reports present a common and accurate picture of the organization's projects and a systematic and logical way to manage variances.

• The implementation of buffer management as a key management and executive process for identifying project problems during execution

The successful implementation of Critical Chain has resulted in major improvements in organizations, examples of which are documented in the case studies in this chapter. In order to understand the magnitude of the cultural change and the problems to be overcome, this chapter explains the fundamentals of the Critical Chain approach, in both individual project environments and throughout an organization.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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