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Wednesday, March 16, 2011

TOC in a word: Focus

Many others, including Goldratt, have already suggested that if you had to summarize TOC in a single word, the best word is "focus." The essence of the core principles of TOC (5 steps, thinking processes, etc.) is that they provide a way to separate the important few from the trivial many. I agree this is at the essence of TOC, and in and of itself is extremely powerful.

Following the principles one is able to look at a large, highly complex organization, no matter what it does, and define where the key points are to improve it. Without a similar insight, one is almost forced into the historical solution for dealing with complex systems--breaking them down into some smaller subsystems that we feel we can get our hands around. We know that this creates distortion, usually large distortions, because the individual components of an organization are not usually smaller versions of the whole, they are "pieces" of the whole. And as soon as we try to optimize the little parts we have divided the organization into, we lose touch with how they are supposed to work together.

The fact that TOC provides a process and a logic to effectively see where to focus without distorting the picture is enormously powerful. If we know where are the weakest links, the constraints, in our system we know which actions will lead to improving the organization, and which will not. It gives us a methodology for brushing aside those things which will not improve the whole, those many things that occupy most of people's time.

This topic reminds me of my first job in industry, with a large multi-national conglomerate. At my facility we had a team of engineers who each year were assigned ambitious cost reduction targets. Each year these people worked diligently to devise creative solutions to reduce costs in every area of the business. And year after year they successfully achieved their targets, saving 2 minutes of labor here, 6 minutes of re-work there, and of course all of the overheads associated with that labor. Yet year after year, in spite of these millions of annual cost savings our division's bottom line remained largely unchanged. Why? because almost none of their efforts were targeted at the organization's constraint.

What would the power of focus have meant to them and to the company? I can only imagine if they had had the ability first to pinpoint the constraints in the business what kinds of real gains they would have been able to make. So much effort was spent optimizing non-constraints, reducing times at steps with extra capacity that did not limit Throughput, and which produced only paper cost-savings because we couldn't lay-off 2/17's of a person. (In any event we had a policy of not laying off staff due to productivity improvements, we would just transfer them somewhere else!)

Without increasing any of the skills, training or tools of those engineers, but simply by providing them with a means of focusing their efforts using TOC they could have had a profound, and almost immediate, impact on the company's bottom line. In my mind that's the definition of a powerful solution--change one little thing and the results increase dramatically.

Another illustration of the potential of focus is management time. Ask nearly every manager what s/he is focusing on and you will get a list of half a dozen or more items--by definition the opposite of "focus". I have even gone so far as to ask managers, if they had "two full days a week, uninterrupted, to focus on solving one problem in their organization (no matter what that problem is) would they be able to make meaningful, significant improvement in that area?" Universally the answer I get is "yes, absolutely". So why don't they do it? Because they don't have "the luxury" of being able to focus like that, they must manage all of the other things as well.

It's interesting because managers immediately get the fact that this lack of focus means that problems rarely get solved, they get at best "band-aids" which will require further time from them in the future to re-patch. They recognize that intuitively not all things are equally important and that focusing on a few would produce lasting and significant improvements, but our habits, and the mode of operation that drives our organizations undermines their ability to do it. In my experience this is prevalent even in companies where there is widespread awareness and appreciation of Theory of Constraints.

I find this paradox interesting and worth exploring further. I would very much like your thoughts on the subject of focus and the gap between the "focus" suggested by TOC as a set of core principles and the focus, or lack thereof, we see in reality. If you're interested I have a few more thoughts I might share on the subject.


Akshat said...

Hi, It was a good read. Thanks for writing.
I was recently introduced to TOC and was wandering if there are any online courses available on TOC. Is their any agency in India involved in conducting such courses!


Stuart Taylor said...

Wow welcome back! I often use your "more blue light" story. To help people understan what their focus should be.

Many thanks for the inspiration.