Critical Chain

Critical Chain is a business novel by Eliyahu Goldratt, a business management guru. Critical Chain expands on Goldratt’s prior business novel, The Goal, and the integral theory of The Goal, the Theory of Constraints. Goldratt is a well-known business novelist and innovator, having published 12 fiction and nonfiction business management titles focusing on the Theory of Constraints. Critical Chain was initially published in 1997, and it follows the development of Critical Chain Project Management, or CCPM, through the story of Richard Silver, a professor in the business school of a struggling university. As Richard Silver works to secure tenure in his role at the university, he must envision new ways to manage projects that can have a real-world impact on his students’ companies. When his coworker Johnny shares the Theory of Constraints, or TOC, with the other business professors, students and professors alike share in an open discussion on innovation in resource management and task scheduling.

Critical Chain, as with many of Goldratt’s business novels, was well-received, and the primary proposition of the work, CCPM, is a useful tool in project management. As a business novel, the premise of the narrative is to expose readers to the thinking behind the Critical Chain method, covering questions and concerns through open discussion between students and professors in the novel. As such, the book provides an in-depth explanation of each element of CCPM and how the methods in the book might be applied to real projects and companies.

This guide uses the 1997 North River Press Kindle edition of Critical Chain.

Plot Summary

The novel opens with the formation of a think tank at the company Genemodem, which produces modems and needs a more efficient project management strategy. Mark Kowalski is the project leader in the development of the new modem, the A226, and he joins Ruth Emerson, a brand manager, and Fred Romero, an accountant and project auditor, in trying to figure out a better method of project management. As a part of the think tank’s work, they enroll in the Executive MBA program at Richard Silver’s university.

Richard Silver is given the opportunity to teach the project management class in his university’s business school, which he sees as an indication that he will be granted tenure. Jim Wilson, the professor in charge of the Executive MBA program, offers the role to Richard because of his talent for leading open discussion in the classroom. Richard’s main concern is developing an idea to publish in an academic journal, and he intends to research project management and co-author a paper on it with Jim.

B. J. vonBraun, the president of Richard’s university, is concerned that she will need to cut the budget for the business school, as companies are no longer sending large numbers of students to enroll in the Executive MBA program. She and other university presidents fear that MBAs are no longer considered necessary to be effective in industry, and they are contemplating reducing the size of their business schools to match the current, lower demand.

Over the course of Richard’s class, Richard and the students begin to develop novel ideas about time estimates and safeties, including the idea that employees often give estimates much larger than the time needed for a task to protect themselves from criticism. Among other similar ideas, Richard begins to see the need for a more effective means of estimating the time it takes to complete individual steps in a project. Covering the ideas of critical and noncritical paths, the class works to construct PERT and Gantt charts to illustrate the impact of included safety times in estimates of project lead times.

Johnny Fisher, another professor at the university, returns from his sabbatical at UniCo with new knowledge of TOC, or Theory of Constraints, which he shares with the other professors. The premise of TOC, that a primary constraint needs to be the focus of production organization, inspires Richard to start working toward an application of TOC to project management. By helping students in their own workplaces, gathering information on resource and scheduling conflicts, and developing new ways to negotiate with vendors, Richard begins to see tangible results for his students.

B. J. vonBraun puts a freeze on tenure and threatens Richard’s job, but she allows the possibility that Richard may increase enrollment and earn an extension. As Richard continues to develop the Critical Chain Project Management method, or CCPM, his students increasingly ask for his assistance, leading to lucrative consulting fees. The A226 project, led by Mark, Ruth, and Fred, completes two months early, proving the success of Richard’s new methodology. Other professors in the university also begin innovating from TOC and CCPM, leading to an accumulation of new thought and methodology across the business school. When Richard begins to spread his ideas, B. J. is convinced of his worth, and the novel ends with Richard receiving his tenure, while UniCo agrees to hire the university’s top graduates.