[6] Tactic: Focus Resource Capacity

To achieve the company's dramatic improvement in performance, the leadership of Confluence made several changes. One such change involved the company's process for allocating resource capacity to projects. In the past, the company's approach was similar to that of the defense contractors. Each project was allocated a perceived fair-share of resource capacity. As a result of the leadership team's new paradigm, each project is now allocated all the resource capacity that it can use effectively. Further, given the company's prioritization strategy, each project actually gets all the resource capacity that it can use effectively, at the right time.

The result of this sustained focus on the right project at the right time is illustrated by Figure 1, below. That figure shows a scatter plot of project size versus project duration. The horizontal axis denotes project duration, expressed in business days. The vertical axis denotes project size, expressed as the number of staff-days needed to complete each project. Data points at the same height denote projects of equal size. The blue data points indicate the projects completed during the years 2000 and 2001, prior to the company's adoption of TOC Multiproject Management (not merely the critical chain model for individual projects). The white data points indicate the projects started and completed during the years 2002 and 2003, after the company's adoption of TOC Multiproject Management (not merely the critical chain model for individual projects).

The data in Figure 1 show an unquestionable and dramatic reduction in project duration. However, Confluence did not achieve faster projects simply by planning smaller projects. The summary statistics of the two data sets indicate that the average size of projects was unchanged throughout the interval covered by the data. Mean project size was 92 staff-days, before the change in the company's management process. It was 96 staff-days after the change in the management process, essentially the same. Therefore, the huge reduction in project duration was the direct result of the highly focused effort that each project now enjoyed. The new management process, of course, permitted that highly focused effort to take place.


Figure 1: The leadership team of Confluence achieved a dramatic reduction in project duration, by focusing resource capacity rather than diluting capacity on too many active projects.

Notice the two data points at the very top of the figure. The blue data point in the upper-right of the figure indicates a project that required 534 staff-days of effort and lasted 328 business days. The white data point directly across indicates a project that required 537 staff-days of effort. The latter project was completed in only 85 business days. This represents an astounding 74% reduction in project duration. The intriguing trend line suggested by the data for larger projects (white dots), which indicates that project duration is a but a week function of project size, is the result of the company's strategy of focusing as much capacity as possible on each project.

Now, the question remains. What can the Department of Homeland Security and other government offices do, to move the nation's defense contractors in this direction? In addition to eliminating the two obstacles discussed in my earlier articles, the answer is quite a bit. Once a specific contractor location has been targeted for improvement, and the projects at that location have been prioritized and sequenced, the government can achieve the highly desirable focus of capacity with a most powerful tool already in its possession, the budget. By simply shifting budget dollars from the lower priority projects to the highest priority project, the government can cause a corresponding shift in the contractor's allocation of resources. Should any government office object to such a shift in budget dollars, one need only ask why capacity that can be applied effectively to the highest priority project (from a homeland security perspective) should be spent on a lower priority project. The answer, of course, is that it should not.

Ideally, the contractor's executive team would cooperate with the government's effort to focus resource capacity. In fact, an executive team that put the nation's security ahead of its own short-term profits would champion the change effort rather than have it forced upon them by the government. However, while the cooperation of the contractors' leadership teams might be desirable, it is not essential. Much of the current dilution of capacity has been caused (and continues to be caused) by the government's existing policies and practices. The contractors are merely doing their best to optimize financial performance within the financial eco-system that the government has created.

By now some readers may be asking an important question: does this approach really cause the completion of more projects in the same time and with the same resources? Look for the answer to this question in the next article.

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Getting To Speed - a web-based presentation.

1) Discover how much more you can achieve with the resources currently on your payroll;

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3) Understand the link between your policies and the performance of your product development enterprise;

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