Critical Chain Project Management: Motivation & Overview

Robert Richards, Ph.D. Project ManagerStottler Henke Associates, Inc.

Hilbert RobinsonPresidentAfinitus Group LLC

Are You A Responsible Person?

Scenario:You live in New England and it’s late WinterTime to airport varies from 45 minutes to 3 hours depending…Most times it takes a little over 65 minutesYou are joining the President at 9:00 AM at the airport

Questions:

How early should you leave? __________Why?_____________________________

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Presentation OutlineBackground

• Triple Constraints• Murphy’s Law• Complexity

Problem [What to Change]• Localized Risk Management

- Task Level Insurance Policy- Student Syndrome- Parkinson’s Law- Multi-tasking

Solution [What to Change to]• Governing Principle - Global Risk Management

- Project Level Protection- Systems Perspective- Execution Control

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BackgroundTriple Constraints [Binding Commitments]

1. Time [Minimize]2. Capacity / Resource Budget [Minimize]3. Content / Scope / Quality [Maximize]

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BackgroundMurphy’s Law [Disruption Event]

• Number of unknowns• Range of possibilities• Frequency of repetition

Complexity [Amplification factor]• Degree of integration required• Number of dimensions to be integrated• Speed of execution

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Presentation OutlineBackground

• Governing Principle or Paradigm Shift• Triple Constraints• Complexity• Murphy’s Law

Problem [What to Change]• Localized Risk Management

– Task Level Insurance Policy– Student Syndrome– Parkinson’s Law– Multi-tasking

Solution [What to Change to]• Governing Principle - Global Risk Management

– Project Level Protection– Systems Perspective– Execution Control

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Problem: Localized Risk Management Strategy1. Task level insurance policy

See opening scenario – answers?And if it was a task in a project??** How safe is safe enough?**

2. Student SyndromeThe dog ate my homework

3. Parkinson's LawSelf-fulfilling prophecy [good estimating?]

4. Multi-tasking [absence of priorities]Hero or villain?

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Problem: Localized Risk Management

Multi-tasking causes delays to spread across all projects, adding as much as 20% to all projects

One Resource, Four Tasks, from Four Different Projects

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Presentation OutlineBackground

• Governing Principle or Paradigm Shift• Triple Constraints• Complexity• Murphy’s Law

Problem [What to Change]• Localized Risk Management

– Task Level Insurance Policy– Student Syndrome– Parkinson’s Law

Solution [What to Change to]• Global Risk Management

– Project Level Protection– Systems Perspective– Execution Control

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SolutionGoverning Principle Behind CCPM is:

Aggregation of risk…

Benefits:• Lower overall protection needed• Higher degree of “coverage” achieved• Leading to lower incidence of “failure”

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Solution: Global Approach to Risk Management1. Planning

1. Project Level vs. Task Level Protection2. Systems Perspective for Multiple Projects

1. Should load for multiple projects be considered?2. Why?3. How?

2. Execution Control1. Promote and encourage team culture2. Controlled work queues3. No multi-tasking work rules4. No batch processing work rules5. Task assignment prioritization6. Management by Exception

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Critical Chain Planning Process

1. Traditional Plan

2. Safety Excluded

3. Resource Leveled

4. Critical Chain Marked

From Task to Project Protection

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144 hours

72 hours

84 hours

Critical Chain Planning Process

1. Traditional Plan

2. Safety Excluded

3. Resource Leveled

4. Critical Chain Marked in Yellow

From Task toProject Protection

144 Hours

72 Hours

84 Hours

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Aggregation Principle

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The Concept of Risk Pooling:Can someone explain why this works?

Health Care Example: Larger pool = Lower cost

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Aggregation PrincipleInsurance is designed to work by spreading costs across a large number of people. Premiums are based on the average costs for the people in an insured group.  This risk-spreading function helps make insurance reasonably affordable for most people.

http://www.insurance.wa.gov/legislative/factsheets/PoolingRiskReducingCost.asp

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Critical Chain Planning

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Aggregation Principle [where did some of the safety go?]:

1. Pooled protection provides more coverage

2. Location is just as important as amount

3. Sizing Rule of Thumb 2/3rds to 1/3rd

Buffer is half of preceding chain

PB = Project Buffer FB = Feeding Buffer

Compared to 144 days traditional

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132 hours

Critical Chain Planning

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Proj_Buf = Project Buffer FB = Feeding Buffer

Schedule shown in Aurora

132 hours compared to 144 hours in traditional schedule

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Critical Chain in Execution

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Schedule Before Execution Starts

“AS OF DATE”

1. T8 experienced a 5 day increase in scope or delay2. Results in a 2.5 day impact to the project buffer3. The rest was absorbed by the Critical Chain gap4. 35-32.5=2.5 7% Complete and 14% Buffer Consumed

132 hours

132 hours

Perspective on BuffersNot “rear view mirror watching”Predictive/Preventative/Leading Indicator Mechanism to Promote and encourage Team WorkCollaboration / Communication Incentive MechanismMeasuring device – Neutral, Normalized MetricsReal-time Risk MeterEncourages an holistic/goal oriented perspective

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NOTES• * Tipping point also reminded me about what we were taught in psychology and

sociology classes.• * Human Behavior is greatly affected by their CONTEXT / environment.• This is not obvious because people are actually very good at

controlling their context.• There have been many presentations at this and virtually every other project

management related conference, about how team members should perform and how project managers should deal with human relationships to make projects successful.

• HOWEVER, most of the time we are trying to change human behavior withOUT changing the context.

• * Critical PATH project management creates a CONTEXT for people to perform in• * Critical CHAIN project management creates a very different CONTEXT for

people to perform in• * Critical Chain is a context that promotes the type of behaviors that needed for

effective teams• E.g., “Avoid Blaming & Complaining”• * Critical Chain When things go bad, not meeting commitments team

rushes to help NOT blame• So incentive to hide problems, & look for scapegoats is greatly

reduced.

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Critical Chain Priority Metric

Project Status Trend Chart or “Fever” Chart

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Critical Chain Priority MetricProject Status Trend Chart or “Fever” Chart

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Multi-Project SystemSystems Perspective for Multiple Projects

1. Should load for multiple projects be considered jointly?– Obviously

2. Why?– Prevent System Overload/Multi-tasking

3. How? – By taking a Systems Perspective

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Finite Capacity Pipeline

Ingredients:

1. CC Plans [shorter]

2. Strategic Pacing Mechanism

3. Strict Priority Scheme

4. Rate Limit Policy/Guidelines

Due Dates Are Derived

Creating a Multi-Project Schedule

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0%

Buf

fer C

onsu

med

1

00

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % Critical Chain Completed0 10

0

1009

1010

1007

1008

1006

1005

1003

1004

1002

1001

By Portfolio of Projects

In Execution, Buffer Status Drives Priority Decisions, not Project Importance

Multi-Project Execution ControlPipeline Status Snap Shot

The Upshot…

Benefits1. Operational Coherence – Stability2. 20% Shorter Cycle-Times – Speed3. On-time Performance – Reliability4. More throughput – Growth

Challenges:1. Simple but not easy to grasp – too simple?1. Requires a change in mindset2. Takes 120 days for typical 100 person team3. We don’t need that much improvement

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Questions ???Robert Richards Ph.D.,

Stottler Henke Associates, Inc.Richards@StottlerHenke.com

Hilbert RobinsonPresidentAfinitus Group LLC