“You’re the only one of my portfolio companies with a tranche,” Gill said to me after closed our $12M Series A funding. Then he added, “These are tough people (the other VC fund, “Donald Ventures”) we’re dealing with, and we’re going to be looking at each other if you don’t meet your commitments.”
Gill didn’t have to tell me that. I knew we had to “tape out” at least four product families in twelve months.
It was not a super difficult goal to hit. That being said, Jeroen, our VP Engineering, and I weren’t going to take any chances. So we decided to use the same project management system we used at our predecessor company, Maxim.
The system was great for the twelve month sprint ahead of us. And we ended up easily meeting our commitments and getting the tranche as promised.
Then the project management system stopped working, and we were behind schedule.
You need a project management system that works for the long haul of building your startup.
Our system was set up with no buffers, so it was ideal for a short-term sprint like the one we just had. However, the system wasn’t set up for the long run.
Soon we were behind schedule on our many of our new products. And, our board started getting concerned as we informed them of our progress during board meetings.
We were going to lose their belief in us if we didn’t change our project management methods.
Years ago, I had read the book, Critical Chain, by Eli Goldratt, and I thought his methodology might really help us. So I bought the book for Jeroen, and he read the book, and I reread the book.
Jeroen became a believer in Goldratt’s Critical Chain methodology, and we adopted his project management process.
You want a system that simultaneously pushes your team and has buffers. The Critical Chain methodology does that.
A simple way of showing engineering progress to your board is showing them the schedules in a red, yellow, green format:
- Red means you’re behind schedule
- Yellow means you’re in danger of falling behind schedule
- Green means you’re ahead of schedule
Most of our projects were in the red when we adopted the Critical Chain methodology.
The methodology emphasizes finding the mean times for each task of a project and understanding what the best and worst case for completing the task is.
You understand the buffer for each task by subtracting the best case from the mean time. This is pretty standard.
The brilliance of Goldratt’s innovation is that you have one buffer for each project that you put at the end of the project rather than after each task.
The normal tendency for engineers is to procrastinate and use up all the available buffer for each task and then some. Putting the buffers at the end helps eliminate that thought process with engineers that suffer from student syndrome.
You go on to the next task when you finish the task you are on. If you go over the mean on one task, then you eat into the buffer for the whole project.
It took about six months, but our schedules went from mostly red to mostly green:
There was more to our improvement than just blindly implementing the Critical Chain methodology. The other key piece was understanding that each engineer is different.
There are some engineers that are overly aggressive with their commitments. There are some engineers that sandbag their commitments. And there are some engineers that are reasonably accurate with their commitments.
Your job as CEO or VP Engineering is understanding who on your team fits in what category. Then you need to make the necessary adjustments.
The board’s view of how we were doing became much more positive as our results improved.
More importantly, we started releasing our new products ahead of schedule. Getting to market on or ahead of schedule improved our revenue performance.
For more, read: www.brettjfox.com/what-ar...