Network of Projects: Organizational Design Using Network Theory and Critical Chain
A Network of Projects is an organizational design that treats everything an organization does as a project. It synchronizes those projects with the Critical Chain algorithm. It replaces the silo-based, hierarchical structure with an organic, network-based model built for sustainable growth.
Why Network Theory Matters for Organizations
We have worked with organizations ranging from metal foundries to nursing homes. In all of them, projects proved foundational. We found that Network Theory could support a way to explain how organizations behave, evolve and improve.
A network is a set of nodes connected by links. Beehives are a natural example, and a city subway system is a manmade one. There are two main kinds:
- Random networks form connections without a specific goal. Their connectivity follows a Gaussian (normal) distribution, with most nodes clustered around the mean.
- Scale-free networks connect some nodes far more than others. The most connected nodes are called hubs, which creates a hierarchy of busy hubs and more isolated nodes. Their connectivity follows a Power Law.
Organizations are inherently network-like. Seeing this lets us analyze how they behave and consciously design, manage and operate them with a much higher level of optimization.
What Is a Network of Projects?
A network is not static. It evolves continuously, and in human networks its dynamics are non-linear because people interact non-linearly. At the most fundamental level, organizations are networks of communities of practice. We believe the prevailing silo-based, hierarchical and functional design should give way to a more organic way of structuring them.
In our book Sechel: Logic, Language and Tools to Manage Any Organization as a Network (2011), we present the Network of Projects as a model for sustainable growth. The model rests on the Critical Chain algorithm developed by Dr. Eliyahu Goldratt. It builds organizational systems in which control mechanisms, feedback cycles and the allocation of finite resources work better and stay aligned with the organization’s goals.
Here is how it works:
- Everything is a project. Some projects are repetitive, such as bookkeeping. Others are non-repetitive, such as new product development.
- The goal gives the network its direction. This makes it a directed, scale-free network.
- There are hub-projects and node-projects. Hub-projects matter most to the organization’s success. Node-projects are smaller but still necessary.
- A finite-capacity algorithm connects them. It synchronizes the projects and is fed by a database of resources.
In the ten steps of the Decalogue, which manages organizations as systems by managing variation and constraints, step 7 (organizational design) becomes the design of a Network of Projects.
The Network of Conversations
The links that hold an organization together are the conversations for action between people. Synchronizing them effectively requires predictable outcomes. This raises a key question: how can human interaction through language, as opposed to a one-way command to a machine, produce predictable and actionable results?
Our answer is to replace the outdated hierarchical structure with an organic design built on managing variation and constraints, one that reflects the project-like nature of organizational work. The change is transformational, not cosmetic. It rests on cooperation, togetherness and win-win thinking, and it asks everyone, including the wider value chain, to think, communicate and act at a higher level.
The real challenge is emotional and cognitive. It lies in how people learn, use their knowledge and see themselves in the workplace.
Thinking Process Tools: Enabling the Shift
Dr. Goldratt developed the Thinking Process (TP) from the Theory of Constraints to support this shift. They guide change through three phases:
- What to change
- What to change to
- How to make the change happen
Used as a complete suite, the tools guide the change process and also support project planning. Using precise verbalization and simple diagrams, they help people:
- Visualize the non-linear network of cause-and-effect relationships behind their reality
- Map the conversations that shape their thinking and actions
- See interdependencies and resolve conflicts
- Communicate through a common language, which reduces variation in how people think and talk
- Work cooperatively and build the empathy collaboration needs
The tools take practice, but within days they help people focus and accelerate their work together. Over time they strengthen three human faculties: intuition (conceiving new ideas), understanding (analyzing them fully) and knowledge (deploying the actions to implement them). Linking these faculties often leads to breakthroughs that once seemed impossible.
Learning also creates a gap between what we know and what we feel we can do, and that gap can be uncomfortable. The tools help turn that tension into a positive force, so that change becomes sustainable rather than temporary.
Moving Beyond the Hierarchical Mindset
The main obstacle to replacing hierarchy is the set of unchallenged mental models that say an organization needs a superimposed control mechanism, such as a boss, a function or a cost-accounting structure. The Thinking Processes make the cause-and-effect assumptions behind those beliefs explicit, so they can be tested and changed.
Changing processes alone is not enough. Flat organizations can become a short-lived gimmick unless the deeper paradigms about how we live and work together are challenged. That takes cognitive effort, and the right cognitive tools are what make it last.
FAQ
What is the Network of Projects?
It is an organizational model in which all work is treated as projects connected in a network and synchronized by the Critical Chain algorithm. It replaces silo-based hierarchy.
How does Network Theory apply to organizations?
Organizations behave like scale-free networks, with a few hub-projects and many smaller node-projects. Recognizing this lets leaders design and manage the organization deliberately.
What is the difference between random and scale-free networks?
Random networks have no goal-driven structure and follow a Gaussian distribution. Scale-free networks have highly connected hubs and follow a Power Law.
What role does Critical Chain play?
Critical Chain is a finite-capacity algorithm developed by Dr. Goldratt. It synchronizes hub- and node-projects and allocates limited resources effectively.
What are the Thinking Processes?
They provide a language-based framework from the Theory of Constraints that guide change through three phases: what to change, what to change to, and how to make the change happen.
Where does the Network of Projects fit in the Decalogue?
It is step 7 of the Decalogue, where organizational design becomes the design of a Network of Projects.
