Critical Chain Project ManagementSolving the 3 Biggest Problems in Project Management

Prepared for PMI Montgomery ChapterApril Chapter dinner

April 4, 2012

Hilbert Robinson, Senior Program ManagerMike Hannan, VP, Public Sector

Common Project Stakeholder Complaints

2

Low

Organ

izatio

nal

prod

uctiv

ity

Long lead timesDe-scoped or

cancelled projects

Cost/budget overruns

Unhappy stakeholders

Poor due date reliability

Missed opportunities

Common Project Management Complaints

3

Rework

Errors

Unpleasant Surprises

Scope creep & spec changes

Overloaded resources

Frequent “fire drills”

Unclear/competingPriorities

High stress Frustration Low

moraleBurnout/turnover Low

productivity

More reporting Meetings

Poor coordination

Severe and chronic

multitasking

Severe and chronic

multitasking

Productive effort

Unrecoverable losses

Cur

rent

Pot

entia

l

Recoverable losses

OtherHigh Rework

Many Open IssuesPoor Coordination

Severe MultitaskingMissing Inputs

PER

FOR

MA

NC

EOperational Gap (1)

4

OtherHigh Rework

Many Open IssuesPoor Coordination

Severe MultitaskingMissing Inputs

Missing Inputs, Severe Multitasking, Poor Coordination, Many Open Issues,

High Rework, Other

MurphyMurphy

CurrentEffectiveCapacity

FUTURECURRENT

Future gains from reducing losses

IncreasedEffective Capacity

Murphy

IncreasedEffective Capacity

%

Old Rule #1

5

Old RuleProblem

1 Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

Estimate vs. Commitment

6

If we treat task-level estimates as commitments, Task Owners will build in hidden schedule buffers, and then have little incentive to finish early.

If we treat task-level estimates as estimates, and pool schedule risk at the project level, we can allocate project-level schedule buffer to those tasks that need it, and only those tasks that need it.

10 Days 10 Days 10 Days 10 Days 10 Days

15 Days10 Days 15 Days10 Days15 Days10 Days 15 Days10 Days 10 Days

Set of task-level estimates = 50 days

Set of task-level commitments = 125 days

10 Days 10 Days 10 Days 10 Days 10 Days

2 Days Work : 1 Day Protection Project Buffer

15 Days

New Rule #1

7

1

New Rule Advantage

Buffer Projects, Not Tasks

Highly reliableproject commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

Old Rule #2

8

1

New Rule Advantage

Buffer Projects, Not Tasks

Highly reliableproject commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

2Assign staff to multiple

tasks, and start all projectsas early as possible.

Focusing staff on 1 taskat a time results in low resource utilization, andholds up other projects.

9

The Overcommitted / Overloaded Organization

Simple Example:

Three person team: A – DesignerB – BuilderC – Tester

The sooner we start ….

Three hot projects

Seven weeks each

10

The Illusion of Progress

Delay Delay Delay

High resource utilization

Delay

Reasons to Multitask

11

Be responsive to demands/needs of others Appease customers, stakeholders, PM, boss, etc. Avoid idle time while waiting for input Be efficient Be busy Impress others with how many projects you can juggle …and many others.

The Hidden Cost of Multitasking

Loss of focus / more mistakes / rework More open / unresolved issues / expediting Disguises other process failures Destroys the smooth flow of work Increases need for (burden of) tracking and reporting Wastes capacity [need for more overtime] Longer project cycle time/lead time Increases per unit cost Fewer completions / higher burnout / lower morale Dilutes managements attention and focus – Loss of control

12

Some negative effects of multi-tasking includes:

Simultaneous vs. Staggered Projects

P4

13

86

4

Simultaneous Projects

Staggered Projects

New Rule #2

14

1

New Rule Advantage

Buffer Projects, Not Tasks

Highly reliableproject commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

2Assign staff to multiple

tasks, and start all projectsas early as possible.

Focusing staff on 1 taskat a time results in low resource utilization, andholds up other projects.

Stagger ProjectsMaximize project completion rate

and resource utilization.

Old Rule #3

15

1

New Rule Advantage

Buffer Projects, Not Tasks

Highly reliableproject commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

2Assign staff to multiple

tasks, and start all projectsas early as possible.

Focusing staff on 1 taskat a time results in low resource utilization, andholds up other projects.

Stagger ProjectsMaximize project completion rate

and resource utilization.

3 Each PM lobbies the PMOfor critical resources.

Priorities across projectsshift, resulting in persistent conflicts over resources.

To Which Project Should I Assign the Critical Staff Resource?

16

15 Days10 Days 15 Days10 Days25 Days 25 Days

15 Days10 Days 15 Days10 Days 15 Days10 Days25 Days 25 Days 25 Days

Project A

Project B

Today

Two identical tasks, only one person with the required skill

Urgent Field Problem

versus a New DesignEngineering Congress

Regulators

Irate Customer

Project Manager

Golf Partner

Executive Sponsor

Respond to Whomever Shouts the Loudest?

17

To Which Project Should I Assign the Critical Staff Resource?

18

15 Days10 Days 15 Days10 Days25 Days 25 Days

15 Days10 Days 15 Days10 Days 15 Days10 Days25 Days 25 Days 25 Days

Project A

Project B

Today

Two identical tasks, only one person with the required skill

Project Buffer

Project Buffer

To Project B, because it is further from completion than Project A, and because it has less project

buffer remaining.

19

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%0%

10%20%30%40%50%60%70%80%90%

100%

Series1; 60%

40%

Percent Project Buffer Consumed Versus Chain Completed

% of Chain Completed

% P

roje

ct B

uffe

r C

onsu

med

DC

BPI Based Prioritization Metric

All projects and tasks are prioritized according to

their current BPI

Single Project Buffer Trend Chart

20

Watch

Plan

Recover

21

Portfolio Dashboard Real Time Organization-wide Prioritization

All decisions are evaluated according to their predicted

impact on BPI

Watch

Plan

Recover

New Rule #3

22

1

New Rule Advantage

Buffer Projects, Not Tasks

Highly reliableproject commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

2Assign staff to multiple

tasks, and start all projectsas early as possible.

Focusing staff on 1 taskat a time results in low resource utilization, andholds up other projects.

Stagger ProjectsMaximize project completion rate

and resource utilization.

3 Each PM lobbies the PMOfor critical resources.

Priorities across projectsshift, resulting in persistent conflicts over resources.

Protect ProjectBuffers ThatNeed It Most

Clarity, commonly agreedpriorities, stronger

cooperation among PMs

Cur

rent

Pot

entia

l

Productive effort

Futu

re P

oten

tial

Unrecoverable losses

Recoverable losses

OtherHigh Rework

Many Open IssuesPoor Coordination

Severe MultitaskingMissing Inputs

The Whole is Greater…

23

OtherHigh Rework

Many Open IssuesPoor Coordination

Severe MultitaskingMissing Inputs

Missing Inputs, Severe Multitasking, Poor Coordination, Many Open Issues,

High Rework, Other

Murphy

More Effective Teamwork, Reduced Learning Curve, etc.

MurphyGains from

reducing losses

PER

FOR

MA

NC

E

FUTURECURRENT

Expected Stakeholder Benefits

24

Long lead timesDe-scoped or

cancelled projects

Cost/budget overruns

Unhappy stakeholders

Poor due date reliability

Missed opportunities

Shorter lead times

More stable scope fewer

cancelled projects

Effective cost/budget

controls

Happier / satisfied

stakeholders

Fewer missed opportunities

Highly reliable due dates

Much higher organizational

productivityLow

Organ

izatio

nal

Produ

ctivit

y

Strong Foundation for Growth

Documented Benefits of Critical Chain

25

Sample Results

18 months vs. 60 months,

IT department first then drug development – CEO: “100% due date performance”

Warner Robbins – Iraq War – Expanded C-5 air lift capacity by 8 million ton-miles

Iraq War – One extra submarine in steaming days

Satellite Division – Turned around the business

Engine Division – partially funded Northwest acquisition

Software delivered 5 months early, 33% cost reduction

26

Sometimes Speed and Reliability Are Mission Critical.

What if We’re Not an Advanced Project Management Organization?

27

CCPM is simple in concept—it turns common sense into common practice.

Introducing CCPM will help any project right away, regardless of how sophisticated and disciplined your project-management practices are (or aren’t).

Some “high-discipline” PM organizations take longer to realize CCPM benefits, because they have a harder time letting go of the “Old Rules.”

Many “low-discipline” PM organizations have an easier time adopting CCPM, because the “Old Rules” are not as deeply embedded.