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Gary and Randal enter the board room . It has a large oak oval table surrounded by over 20 overstuffed chairs. Actual paintings, not prints, adorn the walls. A side bar of ice water with lemons, three types of coffee, and pastries sits off to the side. Gary looks nervously at Randal, “It has been a while since I last visited this room.”

Randal looks back, “It is the first time I’ve been here.” They go off to the side and pick two chairs next to each other. Shortly thereafter Ashley (the marketing and sales director), Herb (HR), and Grant (COO) walk in and take their places. Micky enters the room, pauses to look around, and enters as if it is friendly surroundings and sits next to Ashley. Then Clint, Neal, and Bryn enter. They are the company’s three external board members. Clint was the CEO and Neal was the president of their respective software companies. Bryn was a founder of a software start-up that went from five employees to 150 before she solid it off for a small fortune.

Randal watches as Bryn approaches the podium. “So for this quarter’s board meeting, we have three agenda items. Grant will go over the current financials, Gary and Randal will discuss the engineering status, and Micky will review strategy and direction. At the end, we can cover any additional opens people have.” She looks around the room, and seeing no concerns about the agenda, she says, “Okay, then, Grant please provide your financial overview.”

Grant approaches the podium and starts walking through various numbers, charts, and diagrams covering ROI, burn rates, revenues, and company reserves. Randal’s eyes go blurry, but he tunes back in when Grant goes on to say, “We are in a tight spot. We cannot sustain the company based on our current revenues. Bottom line, we must change and quickly.” The board members ask a few clarifying questions with seriousness in their tone, but at the same time, it does not seem to be news to them. This had been going on for a while.

Randal leans over to Gary and whispers, “This is serious.”

Gary replies, “Yes, we have tried several things in the past, but the results have not been compelling enough. That is why Tim’s Critical Chain caught my and Grant’s attention. It was something new, with a track record, and the more we worked with it, the more it made sense. It wasn’t easy, but it made a difference to both engineering and the company as a whole.”

“So if the issues are serious and have been going on for a while, I can see why Micky has been freaking out. This is his first time as acting CEO and I’m sure he does not want the company to fail in his first year. It would look terrible. And considering he killed Tim’s contract I can see that he is not bought into Critical Chain. So he has to be stressed.”

“Then why does he look so confident?” inquires Gary.

“I have no idea, Gary, but it makes me nervous.”

Grant finishes his presentation and steps down from the podium. Bryn speaks up, “Gary and Randal, the engineering update please.” Randal and Gary then walk over to the podium.

Gary and Randal Present

Gary carefully approaches the microphone. “We have made great progress with engineering. The Phoenix project has made significant improvements. The teams are more focused. The schedules we have created are more complete, solid, and reliable than before. The QA plans are more complete and flexible as well. We are 30% ahead and on track to finish our first customer milestone early.”

Micky looks over to Ashley. “Gary,” Ashley speaking up, “We have heard engineering promises before. How do we know this is sustainable and not just going to fall apart like some of the past attempts?”

Randal steps in, “That is a good question, Ashley. We have implemented a new project management process with the help of a consultant. With his help, we put new systems into place. Captured the process and learnings so we can share it with other development teams. The system allows us to manage our schedules and protect our deadlines as long as we stay disciplined. The process itself has a good track record with helping other organizations as well.”

“What about the recent Phoenix feature requests you tried to rejected from marketing? From our customers?” she continued.

Gary looked over to Ashley, “We built out our schedules to hit the timelines marketing provided. We absorbed some of the requests, but other requests would require us to push out the schedule and marketing did not want us to do that.”

Micky stepped in from there, “If we cannot respond to urgent customer requests then we lose their favor and future contracts.”

“I think we all agree,” said Randal trying to channel Tim, “We all want the company to be successful. We need to both support our current requests as well as be willing to take additional requests. But if we take on more requests than we can realistically support, we will miss the schedules and that will not help anyone.”

Micky stares coldly at Randal for a few moments. The room sits quiet. “You still have not answered the sustainability question. You say things are on track now. How do we know if things will remain on track?” Micky asks, poking the engineering results a bit more.

Randal looks at Gary. “We have a new process in place. A sustainable process,” Gary replies.

“How long until we know for sure?” inquires Micky a bit coldly.

“We are making progress with Phoenix. We’re ahead of the next milestone. The final delivery is in a few months. So it will be very clear then. From there we can continue the process and any knowledge we have from it to the next project.”

“So it will be months to know for sure for Phoenix and even longer for the other projects. We’re tight on funds. We have had engineering problems before. But you think it will be okay.” Micky emphasizing the word okay and looks around the board room.

After a long moment of silence Grant steps in, “Gary and Randal I do not believe some of the board members are familiar with this new process. Can you summarize it for them?”

“Sure Grant,” states Randal. “The new process is focused on creating banks of time to manage and protect our project deadlines, reducing inefficient multi-tasking, and building more robust schedules that will help us reach our revenues sooner. The better managed schedules will benefit us by helping to reduce employee burnout, address more customer requests, and help with maintaining and gaining new contracts.”

The board members nod and ask several clarifying questions that both Gary and Randal cover. Grant then asks, “So Gary and Randal, do you have confidence in this process?”

“Yes,” They both agree.

Grant also steps in, “Tim, the consultant Gary and Randal hired, walked me through this new product development process. I was pretty impressed with it. As Randal said, it will help us manage our schedules better and more reliably. At the same time, Tim showed me how it can help us grow the company. With some key items the new process and stronger schedules will enable us to meet our existing commitments as well as some of the urgent customer requests and late changes marketing needs to improve our relationships with customers. As Gary noted, the results on Phoenix are solid and we can transfer this process to other projects. So I believe we can turn the company around using this methodology, but as Micky noted, it will take time. We have some benefits to Phoenix. It will not take a lot, but it will take some time to start rolling it onto other projects and in turn start seeing benefits there as well.”

Bryn looks around. “Thank you Gary, for the update. Any other questions at this time?” Ashley looks over at Micky and he gives a dismissive sideways head nod no. Seeing no additional questions, Bryn states, “Micky your update on strategy and direction.”

Micky Presents

Micky confidently walks up to the podium, “We’re on the Titanic and heading for an iceberg. We either change course and do something different or the whole ship goes down. We’re not delivering the products our customers need when they need it. We’re losing contracts and barely making money on the contracts we have. We keep hearing the same story over and over—engineering needs more resources, more time—yet it keeps missing its deadlines. We do not have the time or funds to keep waiting. We simply cannot survive this way.” Micky lets the statement stand… “I want to increase the marketing budget by 20% and aggressively push into the market and make our products stand out and distinguish ourselves from our competitors.”

Everyone pauses. Grant is the first to speak, “Micky, where do we get the funds? We are already maxed out .”

“We outsource engineering. I have already talked to several software organizations in China. We can get same development work done at a fraction of the cost. They are familiar with our markets and they have an actual record of delivering on time,” Micky says, emphasizing the word actual.

The execs and board look shocked. Micky stands there gleaming. “I have already started the preliminary contracts; we could turn this over to them in a matter of weeks. Free ourselves from the engineering deadweight that is pulling us down and come out stronger and faster than before.”

Gary is the first to speak, “Micky, they don’t know our technology.”

“I have already talked to them. They have already worked in similar areas. We would need to retain some local technical experts and they can help ramp them up and get familiar with our existing code base.”

“What about our intellectual property? You outsource our development then you are outsourcing our intellectual property. We would be completely dependent on the other company. I’ve heard of less scrupulous organizations taking funds and developing products for one company and then turning around and selling the same products to their competitors. Something like that would cripple us,” states Neal.

“We would have to put safeguards in place. I’ve talked with peers at other organizations and know which companies to steer clear of,” Micky states confidently.

“What about the local engineers? We have already invested heavily in training them and getting them to use to our code base,” Gary asks, concerned.

“We would lay off the majority of them and keep a core team of architects to help guide and manage the work in China. We have to change course. This will get us there. It will be at a fraction of the current development cost and they have a successful track record of delivering products. We can get our pipeline of products quickly and reliably on track, expand it, and aggressively market it. We will be significantly better off than we have ever been,” Micky states soundly and confidently.

The board and execs look around. Bryn speaks up, “Clint, you have some outsourcing experience. What is your take on it?”

Clint thinks for a moment. “We certainly did some outsourcing in my organization, but we phased it in. As Micky noted, the cost savings can be significant; that is why so many organizations look into it. The coordination has to be really well done. There is also ramp-up time. And as Micky noted, you need to find a really good company to work with. And as Neal noted, you have to watch your intellectual property with any place you outsource. You don’t want to give them too much. Overall it’s an interesting proposition Micky brings up. It has some real strengths to it and some really big concerns as well.”

Then Bryn steps in to lead the meeting, “As Micky pointed out and the updates Grant presented we can’t just stick with what we have been doing. We have to change something. We have two very different directions to consider. We can try and trust that engineering will continue to make great progress soon enough or, as Micky said, we can try and change the game all together and outsource. To make this decision, we need to review each option more deeply and then as a group decide.”

Board Review

The board dismisses Gary, Randal, and Ashley and convenes to review the decision. As the three of them wait, they see a man in his late 50s approach the board room and enter. Gary does a double take and then turns to Randal, “Randal, that was Roger. He is our CEO who had temporarily stepped down and let Micky step up as interim CEO.”

“Really? Interesting. I wonder what they asked him here for.”

“I’m not sure…” Looking over to Ashley, she seemed puzzled as well.

After a long hour and half everyone was invited back in. Bryn stands at the podium. “Gary, you have made great progress. If you had just brought promises again, the board wouldn’t believe you. You brought data, results, and a solid plan to move ahead. Grant spoke very highly of your consultant Tim and how he thought your plan had been worked out not just to help engineering, but to grow the company.” Gary nodded.

She continued, “Micky, true to your reputation you have brought a great and bold plan to radically change things and get us to a much better position quickly. But it also comes with great risks both in how fast and successfully it would work and it potentially puts our intellectual property at risk.” Micky holds himself confidently.

“This is not a winner-takes-all decision. We need what is best for the company and its future,” Bryn emphatically states. “The board has decided to very carefully monitor Phoenix and we want a monthly report and review of its status and progress. We also want to see this new Critical Chain methodology and learnings rolled out to additional projects as quickly as possible. In the past, we have had cost over runs, excessive overtime, customer delay penalties, and customer penalties for incomplete features. These have combined to drag our overall company financials down. Per Grant’s estimates, Phoenix will beat its original revenue estimates, deliver on time, and meet the required customer requirements. If we can carry this success forward and to the other projects, this will enable us to increase our overall revenues, improve and grow our customer relations, and turn around and grow the company. Gary, your team has done very well, but we definitely need and expect this progress to continue.”

“Understood.”

Bryn continues, “Micky. Under a very challenging situation you have done well and continued to innovate. Roger has indicated that he intends to formally step down due his medical concerns and we thank him for all of his accomplishments and sharing his insights about our current situation. Micky, you will need to continue to work with Grant to leverage and successfully sell and market Phoenix’s success. You and Grant will work as co-CEO’s to move us forward. Grant will continue to focus on operations and engineering. Micky, you will be promoted to co-CEO immediately and will continue to drive the company’s overall marketing strategy and customer relationships. Once the company stabilizes, we can possibly revisit outsourcing as a way to expand and extend our existing development efforts. But we need to get the ‘here and now’ stable before we can look too far forward. You will need to work with and leverage Grant and Gary’s technical expertise if we are to be successful.”

Micky looks over warily to Gary, “Understood.”

“Any remaining questions or open topics for this forum?” inquires Bryn. Looking around the room and seeing everyone quiet, she continues. “Good. Then that concludes this quarter’s meeting.”

Epilog

A few days, Gary, Randal, and Tim reconnect at the coffee shop where Tim first saw Randal. They filled Tim in on what came out of the board meeting.

Tim looks over to Randal, somewhat baiting him, “So who won?”

Randal looks a bit puzzled, “In some ways I want to say engineering. But honesty I’m not sure; it seems like everyone got something.”

Tim smiles, “I would go along with what Bryn said as far as the company winning. It is less of one department out-doing the other. It’s more about the company as a whole doing better.” Tim looks at Gary, “Looks like you saved the engineering team from outsourcing.”

“True, Tim. I realize now that I needed your and Randal’s help to do it. We had done some improvements here and there but the processes we have now work much better. “

“Tim helped us look past the symptoms of our issues and figure out where the root of our problems are and where we needed to focus our efforts,” Randal states.

Gary looks a bit oddly at Randal, “You are starting to sound like Tim.”

“Umm, possibly he rubbed off on me. But I definitely dress better,” Randal says with a smile.

Gary continues, “With Critical Chain, Phoenix is launching on time, with the required features, and we should achieve the customer sign-off significantly faster than our past projects. With Grant’s help and new position we have balanced out marketing’s sudden feature requests and been able to put in a stronger change control process [frt 9]. We are also in the process of rolling it out to other projects.”

“That sounds great, Gary.”

“And Randal, your take on Micky’s promotion?”

“Umm, I think it is more politics. Sure it’s called a promotion, but Micky is not the CEO or at least the only CEO. They moved engineering away from him and Grant kept operations. It was clear that Micky had grown to resent the engineering team. He is exceptionally good at what he is good at and not so good at what he isn’t. They want to keep him focused on marketing and customer relations. He knows our market and has long-standing relations with customers. It’s something that the board and to my understanding Roger underscored. The company could not risk or survive losing Micky and the customer relationships he has built up and cultivated over the years.”

“And the outsourcing, Gary?”

“It was Micky’s idea. He talked to a few people and really latched onto the idea, but he had oversimplified the technical challenges involved. As the board said definitely something we can’t do now, but Grant mentioned in a year or two that we might consider outsourcing some of the non-proprietary development to help extend our existing development [frt 11]. We really need to get our current projects under control before we can even consider it.”

“And Tim,” Randal interjects, “Now that Grant has reopened your consulting contract as well as an opportunity to join full time, what do you win?”

“I get to keep working with you guys,” Tim says with a big smile.

“True true,” say Randal and Gary, both laughing.

“But Tim, with Critical Chain implemented in Phoenix and the process documented so we can carry it over to other projects, what will you focus on?” inquires Randal.

“Ahh Randal, we have implemented a single project Critical Chain to help each project do well. Once we have got it down and things are running well, we can next look at Critical Chain multi-project to help the organization manage multiple parallel projects effectively [frt 21].”

“I see,” says Randal jokingly, “More theories, concepts, and terminology for Gary and me to learn.”

“It isn’t that bad, is it?”

Randal turns to look at Tim, “Well one last thing Tim, in regards to your office cube. I seem to have run into a bit of a delay….”

Final Future Reality Tree (FRT)

Tim, ever reviewing and tuning his plan, adds two last items to his FRT.

figure a

The future needs to 21) look at Critical Chain multi-project and the possible consideration of 11) outsourcing non-proprietary features. Then he stands back and says to himself, “Now that looks a bit more complete. We have 6) Critical Chain in place as our foundation, 9) change control to pace new requests, 13) a better QA process, and 21) Critical Chain multi-project as we move forward. We also have a future possibility to 11) outsource some work to expand capacity without impacting existing resources. Now that is a more solid plan.”