Someone asks for a project to be made “critical”. The word costs nothing to say, and everyone in the room wants it said, because anything less sounds like a demotion. The owner agrees. No money moves, no plan changes, no contract is signed. It seems nothing has happened.
Something has. If the project’s outcome is fixed and its date is fixed, which is usually why people call it critical, then the only thing left that can move is what it consumes. By agreeing, the business has undertaken to supply whatever it takes: overtime, contractors, the best people, priority with suppliers. Derek Lidow, writing in the Project Management Journal in 1999 from his experience as a chief executive, described committing to a critical project as signing an open-ended commitment of resources. Most businesses have signed several of these against the same limited pool of people and money, and never added them up.
This article explains a more useful way to think about priority labels: not as statements of importance, but as statements about which part of a project is allowed to move. It covers the three classes of priority, why too many top priorities damages a business in a specific way, a simple ledger for priority commitments and a test for when a project’s problem is not really resources at all. It is general information for owners and managers who set priorities across several projects.
Three classes of priority
Every project has three elements that can, in principle, change: what it delivers, when it delivers and what it consumes. Lidow’s classification sorts projects by which of these is allowed to vary:
| Label | Fixed | Allowed to vary | What the business has promised |
|---|---|---|---|
| Critical | Outcome and date | Resources | To supply whatever is needed, when it is needed |
| Important | Budget, plus either outcome or date | The other of outcome or date | To fund a known amount, accepting that either scope or timing will move |
| Desirable | Nothing | Everything | To progress it with spare capacity, expecting interruptions |
Read this way, a priority label is not an adjective. It is a promise with a cost.
Three common misreadings
- The label describes the project. It describes the business’s stance towards it. Two projects of equal value can legitimately carry different labels, because one has an immovable date and the other does not. Equally, a project everyone agrees is vital is not critical in this sense if the business is not prepared to fund overtime and extra help to hold its date. It is important, and calling it critical describes enthusiasm, not intent.
- Many top priorities show ambition. They do the opposite. When everything is top priority, experienced staff learn that their best efforts on any one thing are likely to be undone by the next urgent demand. They stop believing the label and start allocating their effort by private judgement, which the business can neither see nor steer. The visible cost of priority inflation is conflict over resources; the hidden cost is that the most capable people stop trusting the signal.
- Low-priority work needs lighter tracking. It often needs no progress tracking at all. If a project is genuinely optional and expected to be interrupted, monthly progress reports simply manufacture variances that someone then has to explain. That turns sensible flexibility into a recurring story of failure.
The open-ended promises nobody adds up
Each critical label is defensible on its own. The problem appears when several draw on the same people at the same time. Each project then discovers, separately, that the resources it was promised are not there when needed. Each escalates, at different times, to different people, in different words. The real prioritisation ends up being done case by case by whoever escalates most persuasively.
The number of open-ended commitments a business can honour at once is small, and it is a question with an answer. Lidow’s own approach was to label very few projects critical and to give the desirable projects reasonable resources on the explicit understanding that those people could be called on when a critical project needed them. That creates a reserve, named in advance, rather than a scramble under pressure. The how much change a business can carry article covers finding the limits of key people.
A priority ledger
Keep one line for each project with a top-tier label:
| Column | What it records |
|---|---|
| What is fixed | Which of outcome, date and budget genuinely cannot move, with the reason |
| The promise | What the business has therefore committed to supply, in plain words |
| The reserve | Where the extra resources will come from, and who releases them |
| Collisions | Which other top-tier projects draw on the same reserve |
| The tie-breaker | Who decides, in advance, which yields when two collide |
Three tests keep the ledger honest:
- The date test. For each critical project, ask what specifically happens if the date moves by a month. If the answer is a legal penalty, a contractual liability or an event the business cannot move, such as a lease ending or a trade show, the date is genuinely fixed. If the answer is that it would be disappointing, the project is important, not critical. Relabelling it costs nothing and frees real capacity.
- The reserve test. For every critical label, name the reserve. If there is none, the business has made a promise it has no way to keep. Either create the reserve or change the label.
- The tracking test. For every desirable project, ask what decision its progress report informs. If none, stop producing it.
The saying no to good projects article covers deciding which projects to take on in the first place; the ledger starts after that, when labels are attached.
Important projects: say which element will move
The important class is where most worthwhile projects belong, and it only works if the business decides in advance which element will flex. With a fixed budget, either the scope or the date has to give when problems arise. Say which. “The new quoting tool has a $20,000 budget and will launch with whatever features fit; the date stays” is a different commitment from “the full feature list stays; the date moves if needed”. Telling the team and any affected customers which way it will go prevents a predictable argument later, and stops an important project quietly being treated as critical when it runs into trouble.
Review labels as conditions change
Labels are not permanent. A lease extension can turn a critical move into an important one; a new regulation can turn an optional improvement into a fixed-date obligation. Review the ledger whenever a key date, budget or person changes, and at least each quarter.
Words that commit nothing
The same problem appears in smaller documents. A common responsibility chart lists who is responsible, who approves, who is consulted and who is informed. Many such charts mark managers from other areas as “collaborate” or “support” against key tasks. Those words name no deliverable, no date and no consequence if nothing happens. Like an inflated priority label, they read as commitment and specify nothing. Replace them with what is actually expected: “provides two days of testing in the week of 12 May”. The most of your plan is someone else’s promise article covers collecting commitments that hold.
When the problem is not resources
Lidow also offered a useful diagnostic. If a project still has resource problems after its scope has been reduced and suitable resources have been made available, the constraint is not resources. It is commitment or capability: the team does not really accept the objective as stated, or a necessary skill is missing and nobody has said so.
The test prevents an expensive loop. More people are added to a project that does not have a people problem, each addition slows it further through coordination, and the slowdown is read as proof that still more people are needed. Run the test before adding anyone.
A worked example
This is an illustration. A 20-person accounting practice starts its year with four projects, all described as critical at the planning meeting:
- Office move: the lease on the current premises ends on 30 June.
- Peak-season readiness: preparing systems, templates and staffing for the busy lodgement period.
- New practice management software: replacing the current system.
- Website rebuild: a refreshed site with online client onboarding.
All four depend heavily on the office manager and the practice’s part-time IT contractor, both of whom are also needed in the busiest months.
The owner applies the date test. The office move is genuinely critical: the lease end cannot move. Peak-season readiness is critical: client deadlines are fixed. The software replacement is important: the budget is set, and if it moves a month nothing serious happens, so the date can flex. The website is desirable: it will progress with spare time and can be interrupted.
For the two critical projects, the owner names a reserve: the IT contractor’s hours are increased to three days a week from April to July, and a temporary administrator is booked for June to support the move. The tie-breaker is agreed in advance: if the move and peak readiness collide, peak readiness wins in the first week of July and the move team uses the temporary administrator.
The software project is given a fixed budget and a flexible go-live date, and its kick-off is moved to August, after the move. The website stops appearing in the monthly report.
In September, the website has still made almost no progress, even though its scope has been reduced to the onboarding form and a designer has been offered. Applying the diagnostic, the owner realises the problem is not resources. Nobody in the practice owns the client onboarding content, and the partners disagree about what clients should be asked. The owner settles the content question with the partners, assigns ownership to one of them, and the form goes live six weeks later.
How this applies to a small Australian business
- Count your top-priority labels, not your projects.
- Apply the date test to every “critical” project.
- Name a reserve for each genuinely critical project.
- Agree tie-breakers in advance for projects that share people.
- Give important projects a fixed budget and one flexible element.
- Stop progress reporting on genuinely optional work.
- Replace vague responsibility words with specific commitments.
- Check commitment and capability before adding people to a struggling project.
Signals worth watching
- More “critical” projects than key people.
- Staff quietly ignoring priority labels.
- Escalations resolved by whoever shouts loudest.
- Optional projects generating monthly explanations of variances.
- Responsibility charts full of “support” and “collaborate”.
- More people added to a project that keeps slowing down.
Common mistakes
- Using “critical” to mean “important to me”.
- Making promises without a reserve.
- Leaving collisions to be settled case by case.
- Tracking optional work as if it were committed.
- Assuming every stalled project needs more resources.
- Treating relabelling as withdrawing support.
Frequently asked questions
How many critical projects can a small business run? Usually very few at once, often one or two, depending on how many share the same people.
Won’t downgrading a project upset its champion? Present it as clarifying what was always true: the date can move, and the business will fund a known amount. That is a promise the business can keep.
What is a reasonable reserve? Enough people or budget, identified by name, to cover the critical project’s likely peak demand. It can be on-call time from people working on optional projects.
Should desirable projects have deadlines at all? They can have targets, but treat them as aims, not commitments, and expect them to move.
Should customers know our priority labels? Usually not the labels themselves, but customers affected by an important project should know whether its scope or its date is the element that may move, so their expectations match the business’s actual commitment.
What if the outcome of a critical project cannot be achieved even with more resources? Then the outcome or the date must change, and that is a decision for the owner, made openly and early.
Questions to ask
- Which of our projects are truly fixed in both outcome and date?
- What would happen if each “critical” date moved by a month?
- Where is the reserve for each critical project, and who releases it?
- Which projects collide on the same people, and who breaks the tie?
- Which progress reports inform no decision?
- Is this stalled project short of resources, or of commitment or skills?
Bringing it together
A priority label is a promise about what can move. Calling a project critical fixes its outcome and date and leaves resources as the variable, which is an open-ended commitment the business must be able to honour. Use the date test to keep critical labels for genuinely fixed deadlines, name a reserve and a tie-breaker for each, give important projects a fixed budget and one flexible element, and stop tracking optional work as if it were committed. When a project still struggles after its scope is cut and resources are offered, look for missing commitment or skills rather than adding more people.
Source: KEVOS notes, drawing on D. Lidow (1999) on project priorities in the Project Management Journal, and teaching material on resource planning and responsibility assignment. Examples and figures in this article are illustrations. This article is general information.
