Cumulative Flow Diagram (CFD) as a Health Indicator For Your Project

This is a cumulative flow diagram (CFD) from a healthy project:

The solid gray block in the bottom-right of this chart is the customer value, completed and recognizable by customers. Running right above is a thin orange band, which is the work in process (WIP).

How you define your project work items is key. A project comprises many work items. Their number is the height of the vertical axis of the project CFD. In the above example, it was possible to define the project scope as thousands of tasks. The trouble with this approach is, it’s possible to complete many tasks, yet not complete anything valuable or even recognizable by customers.

The project manager took the customer-oriented approach. It wasn’t without difficulties. Completing each customer-recognizable work item involved several specialist teams and dependencies. Getting even one item across to the customer required daily problem-solving focus. It was more difficult than simply starting, completing and declaring done some fifty tasks within a specialist team (and adding 50 tasks to another team’s queue).

The project manager kept the work item lead time short and somewhat predictable by focusing on delays and dependencies. He didn’t control the WIP tightly, but intervened when there were too many work items stalled in the middle of the workflow. As a result, the project WIP averaged about 4% of the total scope and never exceeded 8%. The average work item lead time was much shorter than the project duration (4%), assuring fast feedback and possibilities for course correction based on learning from earlier deliveries of customer value.

General guidelines for projects:

1. Define scope in terms of customer-recognizable work items
2. The lead time of project work items, on average, should be significantly less than the project duration. Ratio of project timeline to work item lead time of 10:1 is recommended. With lower ratios, feedback arrives late, when you’re already too far into the project.
3. For example, if you’re planning a year-long project, ask: do you have a capability to deliver the project’s typical work items in about a month on average?
4. Shorter lead time and faster feedback don’t happen by magic. You have to keep work in process (WIP) under control, roughly in the same proportion on average as the time ratio.
5. If there is no capability currently in your organization to deliver desired work items within the required lead time (or if there is no evidence of such capability, e.g. a recent lead time distribution chart), your project plan is unrealistic. You have to work on improving the service delivery capability, create a realistic plan, possibly negotiate both at the same time.
6. If the work item lead time is trending (improving or deteriorating), your project outlook is trending as well. Therefore, regularly conduct data-driven reviews of delivery capability of services involved in the project. This assures that your project plan is still healthy or gives an early warning.