Smart Moves: A novel attempt to rebuild construction
Sunday 14 March 1999
The Goal and Critical Chain, the novels in question, are not your ordinary pot boilers. In them, the author, maverick management guru Eli Goldratt, outlines his theory of a project management process that includes the human element. When applied, the theory has been remarkably successful. One British engineering firm, Balfour Beatty, has already shown dramatic improvements since adopting the method, with major engineering work regularly being completed early.
Change is badly needed: in the UK a staggering 75 per cent of construction work is completed late while costs, on average, go over-budget by as much as 190 per cent. Some 30 per cent of programmes are cancelled before they reach completion. And that's despite sophisticated software programs, management processes and data systems designed to help managers' project lead times. If anything, argues Goldratt, the over-reliance on rigid software programs has led to this ineffective planning.
The failure of traditional methods is stark when compared to Critical Chain theory. Goldratt maintains that projects fail because sponsors have ignored uncertainty instead of building it in. They have hoped that "things will go according to plan" rather than looking longer at the potential danger areas. The key, he says, is to take the vagaries of human endeavour into account in the planning process.
The theory says that unreliable performance, poor understanding by contractors, variation in the time to complete tasks, and a haphazard pattern of tool, equipment and material delivery are inevitable. So attention should be paid to the bottlenecks in the process. Progress should be seen in terms of interlinking chains and interdependent events rather than as a series of tasks. Instead of individual contractors fulfilling their criteria irrespective of the considerations of the other participants, everyone should play an active joint role from the start and hammer out a shared timetable.
Goldratt's approach is being rapidly adopted by project management experts worldwide. The latest to embrace his thinking is management consultants Ashridge, which is running a series of seminars called Project Management in Action to introduce Critical Chain thinking.
"Critical Chain theory has been one of the most significant advances in project planning and resourcing for over 40 years," said Carole Osterweil, programme director for Project Management in Action. "In our workshops we challenge managers' traditional approach to sponsoring projects, which is the unquestioning application of tools and methodologies. Although Goldratt's theory is highly scientific in nature, the end result is a more human and practical approach to project management."
Critical Chain theory centres on the removal of bottlenecks that can throttle the progress of a project. It seeks to turn thinking upside down by switching from a mindset that sees cost considerations as paramount to one in which throughput is predominant. Flexibility is vital, project phases do not matter, and milestones are largely meaningless. One of the repercussions of this new approach is that a contractor is hired for reasons of good performance rather than value-for-money. The result is a shorter lead time and lower costs.
Critical Chain seeks to reduce waiting times and the lack of co-ordination which frequently leaves machinery and parts hanging around while another section of the project is finished. Adherence to established planning strategies is a stumbling block to performance, Goldratt argues. Rather, open-ended thinking should be the first procedure. To produce an accurate estimate of a project's duration, all the human elements must be part of an equation which sees life as it really is.
It means that the start-up stage is slower, with longer, more detailed discussions involving all major parties with the express aim of achieving a consensus. It seeks to do away with contingency plans - the safety nets that pick up the pieces when things go wrong. If procedures are planned thoroughly at the outset, the theory goes, there won't be any need for a secondary strategy.
But essential to fostering the necessary collaboration are project managers who can handle the political as well as the technical aspects of a project. None of these skills can be acquired in isolation from the traditional personal skills and capabilities of a good leader.
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