Critical Chain

Page returns to B. J.’s office to complain about the business school budget, which B. J. cut based on a reduction in applicants compared to the forecast. Page cannot argue against her decision, but B. J. is unhappy with the need to shrink the business school. She arranges a meeting with Goldsmith, who is president of another university, and they go for a drive. B. J. tells Goldsmith that the issue with their business schools is not oversaturation, as the demand for qualified managers is not being met in the real world. B. J. asserts that, unlike lawyers, who need law school to learn critical information for their careers, she fears MBA students are not gaining crucial knowledge. B. J. and Goldsmith agree that neither of them cares if applicants for managerial roles within their own organizations have MBAs, and they know that companies are actively discouraging their employees from enrolling in MBA programs.

Goldsmith disagrees with B. J.’s assertion that managing is an art, saying that business is a matter of science and data, even though the methodology for measuring it is not fully concrete. B. J. insists that the only way to save their schools from failing is to cut back their business programs to meet the reduced demand for business degrees, but she also notes that she feels bad doing it. B. J. suggests that she may resign to avoid needing to crush the hopes of her young professors looking for tenure during a freeze on promotions, noting that many professors may need to be fired. Goldsmith comforts her by observing how young professors have time and energy to adapt to change, meaning they can continue their careers at other schools, even if B. J. is forced to fire them.

Jim meets with Richard to discuss their research for an article to publish. Jim combines the reports he has from previous semesters of teaching project management, and, with Richard’s new additions, he feels they can write a comprehensive survey on the complaints regarding delays and budget issues. Richard knows the research will be tedious, but he is anxious to publish a paper. Richard mentions a pattern he noted in seven of the reports, including Fred’s report on the Malaysian factory: The main source of delays seems to be cutting costs on vendors. By saving money on the initial cost, the company ultimately loses money due to delays in getting the project to start making money. The delayed payback ends up costing more than the company saved in choosing a cheaper vendor. Jim thinks this is interesting, but he suggests separating Richard’s ideas into multiple papers, rather than trying to cover too much in one article. Before Jim leaves, Richard asks about the budget cuts in the business school, and Jim comments that Richard’s tenure should be safe, even though B. J. and Page are disagreeing on budget, revealing that B. J. is the president of the university at which Richard works.

Richard discusses Gantt and PERT charts with the class, asking Fred to develop an example PERT chart for the construction of a factory. PERT charts show individual tasks, the order they need to be completed, and the time it should take to complete them, and Fred makes two paths: one shows the building construction, and the other shows machine construction, culminating in a functioning factory. Richard has the students identify the critical path, which is the path in the PERT chart that takes the longest period, as the critical path determines the length of the project. They agree that the critical path is constructing the building, while the noncritical path is constructing the machines.

Richard has a student, Brian, make a Gantt chart for the project, which shows the relative timing of each task, and Brian has the noncritical path on a late start, beginning later than the building construction. Another student, Ted, insists that the two paths should start at the same time. Ruth interrupts, noting that the project manager will struggle to focus on two paths at once, and the class agrees that the project manager needs to be focused for the project to succeed. They decide that they would need a good control mechanism, but the control mechanism would depend on progress reports, which they all acknowledge identify issues too late for project managers to compensate. Ultimately, because all paths coincide with the critical path, reports tend to show progress based on specific paths, even when others are lagging, especially when one problematic path gets ignored for too long.

At home, Richard has a fight with Judith about Judith buying Richard a new car as a gift. Richard insists that they cannot afford it, and he recalls telling Judith they could not afford a child, noting that Judith recently found out that she can no longer have children.

Jim presents Richard with edits to his first draft of their paper, and Richard is dismayed by the extent of the edits. Jim tells Richard that Johnny, who was going to perform the mathematical analysis of the issues with hiring cutting costs for complete timelines, has declined to help. Richard claims to have two new ideas for more papers, and Jim is shocked. The first idea is about project managers’ abilities to focus on the project, which are hindered by multiple paths of tasks regardless of using an early or late start on noncritical paths. Jim rejects Richard’s idea for two reasons: Richard does not propose a solution to the issue of focus, and the idea of focus cannot be quantified in a mathematical model, both of which are needed for publication. Richard is frustrated, but Jim urges him to discuss the second idea, which is the need for a change in measuring progress. Jim has established ideas on measuring progress, such as measuring in a way that serves the whole project and using measurements that call attention to potential issues. Richard agrees with those ideas, but he says that current standards of measurement go against that advice, detracting from the overall project and diverting attention away from problematic paths. Jim suggests meeting with Johnny, who recently worked on developing methods for quantifying and analyzing logical procedures, such as the ones Richard is suggesting.