Have You Discovered the Critical Path For Your Business?

Back in the eighties I had a friend of mine, Bob Randolph of the Professional Management Institute, tell me there were only about 11 effective critical paths in all of business.

[Note: This post may be a little less ‘sexy’ than the QSBJ’s posts on marketing campaigns and so forth, but further research on, thorough knowledge of, and wise application of your critical path can result in the same or even better net dollars than new marketing interventions. It just ‘sounds’ like this is an egghead post, believe me!]

Meaning that, from Bob’s statement, once deciding on an appropriate critical path for a certain enterprise, you could basically run any business in the world with one of those 11 critical paths. Your task is to discover your best critical path for your business.

Whilst we are still desperate to have Quad State entrepreneurs plan and develop more businesses in our region, we are going to take what I trust will be a profitable vertical journey of discussing business management.

The Invention of the Critical Path and PERT are Synonymous Breakthroughs In Business History

My above friend was Bob Randolph, President of the Professional Management Institute. He constantly had the American Management Association try to convince him to come with them.

We did some interesting projects together during the 1980s. While Bob was of the ‘cantankerous’ lot, he knew his stuff. He invented and got a patent for a technique called Planagement (R) that combined planning and management.

The QSBJ is going to go into some of the techniques of Planagement in upcoming posts. Quite interesting.

Bob received his MBA in 1964–back when institutions of higher learning had to be convinced that a student actually earned their MBA. This, as opposed to what some call MBA mills today, where the institution receives more money from the U.S. Government when they can show they graduate more students. (But I digress.)

An Example of Critical Path Application Resulting In Higher Net Profit

An Example of Critical Path Application Resulting In Higher Profits Due To Developing Shorter Steps to Project Launch

This chart shows how the critical path method works. Many project management initiatives run with critical pathing in mind.  Obviously, the ‘launch’ wouldn’t have to be a product or project. It could be overlaid to problems of logistics, problems in the accounting department or whatever function.

There is an entire subset of critical path methodology used in the computer programming world–something that you may be more familiar with. But let’s tally forth. First a very brief backgrounder.

The Critical Path Method (CPM) was credited with the successful developing and launch of The Manhattan Project in the years 1940 to 1943 (the U.S. atomic bomb).

It was the brainchild of Morgan Walker of DuPont and James Kelly of Remington Rand. Critical path was actually a ‘summary’ term in which Kelly referred to the results of Booze Allen’s Project Evaluation and Review Technique (PERT).

CPM, it was discovered, was a technique that could be profited from in business applications in the 1950s and thus, CPM became the more popular term.

But What Does All That Have To Do With My Screwed Up Shipping Department?

Hold on.  If you have ever taken a course in project management, you experience just about the same things. Project management comprise of steps to accomplishing a project. The critical path is what is discovered when cheaper, better, faster techniques are discovered on the way to launching the project.

In other words, it would do you well, as the CEO, to have all of your present management team take the intro course offered by the Project Management Institute. THEN watch the insight take place. Make sense?

If you are referring, say, to a ‘screwed up shipping department’ for example, you are simply asking for the most direct, or simple, steps from inventory management, to the pick and pack state to the freight on board stage. CPM looks remarkably like project management in some ways…

 

  1. A list of all activities required to complete the project (typically categorized within a work breakdown structure or disassemble,
  2. The time (duration) that each activity will take to complete,

  3. The relationships or dependencies between the activities and,
  4. The logical end points such as milestones or deliverable items.

 

As the late, great Stephen Covey would tell us, ‘Begin with the end in mind.’ What you want to accomplish must be defined well. What does success look like? Who else thinks that is what success should look like?

I have seen it where a CEO of a smaller firm (under $10 MM)  calls all of his management team together and presents an opportunity or a problem the company has.

And then hands out graph paper to each manager and ask them to come up with the ‘best’ critical path to that opportunity or solution. And then gathers up the graphs from each and creates a ‘master’ critical path.

Sometimes that technique works well. As organizational leaders, we all must fight against the attitude that we have all the answers. In reality the employee closest to the problem or opportunity–or idea–oftentimes is the best expert for you.

Back in the ‘old days’ of management consulting, there were entire consulting practices formed around this one technique. And the wise corporate leader would use them to their enterprise’s advantage.

Nowadays, business coaching has taken over many of the areas that still should be the purview of the consultant. (Sigh.)

As I’m a business coaching purist of sorts, I ask your indulgence when I sometimes rail against the folks who still do not know the difference between consulting and business coaching (to their bank account’s peril).

As an old management consultant turned marketing consultant turned business and corporate coach, I can tell you that when a wise CEO understands and exploits the differences between the two interventions, wonderful things begin to happen!

Again, if you have any questions, give me a shout!

This idea of critical pathing can be used in SO many ways in business.

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About Steve Lanning

Steve Lanning is a nationally recognized entrepreneur who has been creating his own paycheck since 1975 and loves to help others do likewise. As the founder of both the National Association of Business Coaches (sold in 2002) and the Consultants National Resource Center (for all marketers of professional services), he and his family have lived in three of the four states in our Quad State region. His passion is to see individuals and small businesses, start-ups to mature, discover and promote their strengths in building revenue streams individually, that, collectively, make for a strong region as reported on and celebrated by the Quad State Business Journal. He can be contacted at AdviceMarketing@gmail.com.

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