Exceeding the competition, finding new clients and keeping your business profitable are challenges that you have to face, regardless of how experienced an entrepreneur you are or how many years you have been in business. With fires to put out in every corner, the day-to-day hustle of business can easily send your plan and intentions to oblivion! Before you know it, you are nowhere near where you thought you would be.
Don’t panic! Large organizations have been in your shoes and pulled their resources to find a solution. That’s where the critical path methodology comes into play.
Critical Path is a project management method first developed in the late 1950s to schedule projects. The US Navy’s Fleet Ballistic Missile (Polaris) Program was behind schedule and needed help resolving the problem. The solution was to divide the project into tasks, organized in the proper sequence of importance and dependencies, estimate the completion time of each task to obtain a clear picture of the entire project. At the same time, the chemical company EI DuPont de Nemours was experiencing delays in its plant turnarounds and came up with an answer similar to the Polaris Program.
Applied to entrepreneurship, Critical Path is a comprehensive process for determining a business future and how it can best achieve that goal. It audits the business powers and explicitly articulates the business’ objectives, the critical actions, timelines, and resources required to achieve them.
Here is an overview of the Critical Path methodology we deploy to move companies forward:
- Identify the critical tasks
The first step is to identify the main objectives that will advance the company. Often entrepreneurs would excessively focus on activities within their comfort zone regardless on their impact on the desired outcome. For example, developing features for a, early stage product that are not deal breakers for the customers.
Once the most important tasks are identified, then you can start breaking down into smaller chunks of work.
- Establish dependencies
Some tasks will depend on the completion of others. To identify the correct sequence, ask yourself these three questions for each activity on your list:
Which task should take place before this task happens?
Which tasks should be finished at the same time as this task?
Which tasks should happen right after this task?
- Estimate completion time
Using past experience or best guess, estimate the time required to complete each task. You can also apply the 3-point estimation method with best-case estimate, most likely to happen and worst-case estimate, weighing on each one them as you feel most comfortable.
a = the best-case estimate
m = the most likely estimate
b = the worst-case estimate
To put more weight on the most likely value: E = (a + 4m + b) / 6
To share weight equally: E = (a + m + b)/3
- Estimate the resources
Now that you have an idea what the workflow looks like, check the resources needed to complete each task and complete a preliminary budget. Based on the results, you may need to rearrange the sequence of the work breakdown.
- Identify the critical path
Drawing a visual representation of your workflow will help you see which path is the shortest: simply add the completion time, from start to finish, and select the option that will match best the outcome.
Now execute and measure your progress. As you execute your plan, you will learn the actual completion times and resources used. Update your diagram as new information emerges, to have a more realistic view of your progress, able to track in real time if you are on point or falling behind. You may also recalculate a different critical path if necessary.
Entrepreneurship can be a bit messy. Critical Path provides a road map and supports business owners who have the innate ability to sustain successful businesses. Ultimately, their extraordinary results benefit everyone. Successful businesses create today’s jobs, sustain our economy and communities.