One of the most liberating and powerful aspects of TOC is that it provides one with a different, more effective perspective on organizations (particularly businesses). Most people who learn about the concepts and take them in deeply enough to re-think the way they view a business find that they can never go back to their old way of seeing things. It's like the old story of the emperor's new clothes. Once you have seen that the emperor is naked, you can no longer see anything else. People who absorb TOC even a little bit find that their perspective of virtually everything is colored by it. They see the constraints in any system--in the line at McDonald's, at the doctor's office, in their children's schools, and in their own companies.
They just see things very differently than many of those around, and I would say more clearly. It's not that they are smarter than the next guy or gal, or have more experience than someone else, they simply have a very powerful set of lenses (TOC) that shapens their vision beyond that of others. I think I am personally a good illustration of this. I had the good fortune to meet and work with Eli Goldratt at a young age, and my father is Bob Fox, before I worked in the world and aquired the conventional way of looking at things which I characterize as the lens of complexity. In other words I had very little experience in looking at systems by breaking the complexity down into lots of smaller pieces in order to make sense of it. I was given the gift of being able to see them whole through TOC and the 5 steps.
I could give lots of examples of how this perspective helped me to see and understand large highly complex businesses very quickly, and to see them more clearly than almost anyone within those companies, but I won't. (If you want to read one of them check out the post on this blog called "TOC Stories #2: Blue Light".) What is important is that TOC is a game-changer. It provides an enormously powerful lens for looking at systems, organizations of any type, that enables the user to identify extremely quickly what really matters within the entire thing and what to do to immediately to improve that system.
It is not just an improvement methodology or a powerful set of techniques. It is a new perspective, it is the ability to see aqnd understand the world better and more clearly. Armed with an understanding of the 5 steps or the TOC thinking tools, any individual becomes capable of seeing through enormous amounts of noise, detail and confusion filtering out the trivial many from the very few truly important things in any system. This is an enormously empowering ability to possess. I have felt it personally and have seen it repeated hundreds of times in the companies I have worked with.
Since most people suffer greatly due to an inability to understand and control the things that go on in their world, acquiring the perspective of TOC literally changes people's lives. With the ability to understand comes a significant peace of mind, even if other factors prevent one from immediately changing things. But TOC provides the perspective and the skills to change things as well, further increasing a person's enjoyment and satisfaction in life.
We've long characterized our consulting work as "unleashing the potential of the organization" because we have always viewed what we do as an effort to provide our clients with the new perspective of TOC and enough coaching to use it to change their own organization. Once they acquire the perspective they are able to see for themselves much more clearly what to do and how to do it. The only reason they need the additional coaching and guidance we provide is because they carry a lot of baggage from the way they have always done things. In other words they have inertia and initially will readily slip back into the old perspective, take off the TOC glasses and look at things without those lenses. So it helps to have us stick around until the TOC becomes fixed and established broadly and deeply enough in the organization.
For my money nothing else out their in the improvement universe holds a candle to TOC. TOC has given us the perspective and the skills to understand cause and effect in complex systems. A good analogy in my mind is that TOC is akin to the skills and abilities a doctor gets in his medical school and residency training, giving one the ability to select and utilize the specific tools around us, as a doctor uses scalpels, X-rays, and MRI's.
The value of the perspective of TOC is hard for me to overstate. Over the last 25 years since I was first exposed to it, I have watched repeatedly as individuals and organizations have been transformed by it. The measurable gains that we all read about in terms of the performance of organizations are astounding, but what is less well publicized and less easily measured is the impact that it has had on people like me and our ability to understand, manage and improve our worlds. Everyone is aware of the power of a fresh perspective on things, TOC has created processes tools and techniques whereby anyone can acquire and consistently apply such a perspective. This is indeed a powerful thing.
All about Goldratt's Theory of Constraints, applications, stories, successes and challenges, and open dialogue on Theory of Constraints methodology for improving almost any kind of system. Particular focus on TOC applications in Project Management, Manufacturing and Distribution. All things Theory of Constraints, TOC
Tuesday, March 29, 2011
Friday, March 25, 2011
The Simplicity Paradox
I have been banging my head against a long-standing paradox within TOC--the paradox that while the concepts of TOC are simple to grasp and understand intellectually, they have not been simple at all for people and organizations to implement. Or said more plainly: "How can something so easy, be so darn hard to implement?"
I think that the essence of the correct answer is generally well known to people in the TOC world and is even captured in the 5 steps. The underlying reason TOC is so hard to implement, even though it is simple to understand, is inertia. The methodology, in all its simplicity, actually demands that so many aspects of how we run and manage our organizations be re-thought. Things like the metrics we use, cost-accounting, scheduling, logistics, sales, inventory management, etc. all are altered by the core principles of TOC. Each of these areas, and more, should be re-thought and re-worked in light of the TOC principles.
In other words, while grasping intellectually the 5 steps and the essence of TOC is truly simple, the implications it has for nearly everything in an organization are extremely far-reaching. The principles impact things that people have done a certain way in organizations for a long time. They encounter many points where people have inertia built from years of past practice. So while the principles can be grasped simply, we immediately bump into the need to change a significant number of things people have always done differently--if you will we activate a lot of inertia.
Since people are not generally in the habit of re-thinking everything just because they have been exposed to a new concept like TOC, there is little actual recognition that so many things are affected by the new insight of TOC. So people don't even realize in most cases many of the things that should be changed. As people we simply carry on as we always have until something causes us to see the need to change it.
I think this is exactly what we encounter when we try to bring TOC into an organization. People get the principles quickly, on an intellectual level, and because they are so simple conceptually, they have the mistaken perception that implementation will also be simple. "Yeah, we get it, find the weakest link, exploit it, etc. What's the big deal?" But the things they don't are the implications of the concepts.
I suspect that people like myself who are working to help companies really capitalize on TOC may have fallen into the same trap. We understand TOC so well and have made such a profound shift in our own thinking, that we have forgotten the magnitude of the inertia that TOC bumps into in organizations when we try to implement it. And as a result of this I think we haven't done all we can or should do to address the real barrier to implementing TOC, which is how to overcome the organizational inertia (not the intellectual inertia of understanding TOC). I don't think we have focused enough of our efforts on strategies, tools, processes, techniques, models, roadmaps, etc. to help expose the impact of TOC on existing organizational behaviors, and how to shift those behaviors.
I have a lot more to say on the subject, but I really need to know what you think about it, and whether you think my observations are sound.
I think that the essence of the correct answer is generally well known to people in the TOC world and is even captured in the 5 steps. The underlying reason TOC is so hard to implement, even though it is simple to understand, is inertia. The methodology, in all its simplicity, actually demands that so many aspects of how we run and manage our organizations be re-thought. Things like the metrics we use, cost-accounting, scheduling, logistics, sales, inventory management, etc. all are altered by the core principles of TOC. Each of these areas, and more, should be re-thought and re-worked in light of the TOC principles.
In other words, while grasping intellectually the 5 steps and the essence of TOC is truly simple, the implications it has for nearly everything in an organization are extremely far-reaching. The principles impact things that people have done a certain way in organizations for a long time. They encounter many points where people have inertia built from years of past practice. So while the principles can be grasped simply, we immediately bump into the need to change a significant number of things people have always done differently--if you will we activate a lot of inertia.
Since people are not generally in the habit of re-thinking everything just because they have been exposed to a new concept like TOC, there is little actual recognition that so many things are affected by the new insight of TOC. So people don't even realize in most cases many of the things that should be changed. As people we simply carry on as we always have until something causes us to see the need to change it.
I think this is exactly what we encounter when we try to bring TOC into an organization. People get the principles quickly, on an intellectual level, and because they are so simple conceptually, they have the mistaken perception that implementation will also be simple. "Yeah, we get it, find the weakest link, exploit it, etc. What's the big deal?" But the things they don't are the implications of the concepts.
I suspect that people like myself who are working to help companies really capitalize on TOC may have fallen into the same trap. We understand TOC so well and have made such a profound shift in our own thinking, that we have forgotten the magnitude of the inertia that TOC bumps into in organizations when we try to implement it. And as a result of this I think we haven't done all we can or should do to address the real barrier to implementing TOC, which is how to overcome the organizational inertia (not the intellectual inertia of understanding TOC). I don't think we have focused enough of our efforts on strategies, tools, processes, techniques, models, roadmaps, etc. to help expose the impact of TOC on existing organizational behaviors, and how to shift those behaviors.
I have a lot more to say on the subject, but I really need to know what you think about it, and whether you think my observations are sound.
Wednesday, March 23, 2011
We have to change?!! Oh no!
I get asked all of the time why TOC isn't more widespread, why it isn't at least as big as movements like Lean and Six Sigma. There are lots of theories about this from many quarters and I certainly don't have the definitive answer. I do have a couple of observations I think are worth sharing.
The TOC concepts are not complex or difficult to understand. In fact by comparison, Lean and Six Sigma are far more complex and demand much technical knowledge of statistics, variation and the like. What makes the change to TOC more difficult is not learning the concepts, but it's coming to grips with all the ramifications those concepts have for how we run our organization.
TOC suggests a complete "re-modeling" of the organization, it's measures, the roles each function play, how levels work together, what information is important, etc. I don't think any of this will be news to most followers of TOC. I like the analogy of re-modeling the organization though, I think it offers an insight into one of the reasons TOC is not as widespread as it could or should be by now.
Think about what you would do if you were going to remodel something, say your house. What would be some of the steps you would take? Certainly you would sketch out some plans of what you want the house to look like when you are done. If it was a large enough remodel you would have a builder or an architect create detailed plans of the new layout. You would make sure that these plans then got in the hands of the builders so that they purchased the right materials, dug holes in the proper places, erected the correct structures, and executed everything you wanted properly. Without the picture (the drawing, blueprint, design) and the specifications it's hard to imagine the remodel turning out the way we want it to.
I don't think it's any different with remodeling an organization using TOC. Yet when I look at the ways TOC has traditionally been brought into organizations, I don't see many examples of blueprints for how the organization should look AFTER TOC has been rolled out. For the most part what we have given organizations is the generic process (the 5 steps) and a number of applications (DBR, Critical Chain, Throughput Accounting, etc.) to functional needs. To use the analogy of remodeling a house, these are akin to the generic process of building a house (first you dig the foundation, then you pour it, then you frame the structure, etc.) and the technical skills needed to do the various components of the remodel (the wiring, plumbing, drywall, etc.). While each of these is necessary to being successful, we still need to apply them to each organization's unique situation, and individual objectives. In other words we need the blueprint laying out how TOC is going to be applied in each specific organization.
Without a specific design for a given organization, we have no way of telling the builders (the managers and staff of the organization) what they should be doing, how they should be applying the skills and knowledge they have. Imagine hiring the best builder in the world, with the best process, skills and resources and then asking him to build you a great house without any plan, design or model. It's not likely the house would be well suited to your specific needs or desires.
I believe we have done much the same in TOC. We have great processes, and generic applications like DBR and Critical Chain, but for the most part we have not provided organizations with the picture of how to apply these capabilities in their environment. We haven't given them a very clear picture of what their organization looks like on TOC. And without a clear and visible destination it's hard to keep people focused, to keep them aligned and to keep them on-task. I believe this inability to see what my organization looks like on TOC is a part of the problem with TOC becoming more widespread.
This is not to say that there aren't some out there who have recognized and are addressing this shortcoming. Eli's Strategy and Tactic teams provide some of the missing specifications. Realization, the providers of Concerto for critical chain, typically does a first-class job of mapping out how each client's organization will look, including definitions of the roles and responsibilities, before launching into the change process. My organization, Viable Vision, utilizes a simple visual blueprint we call the Throughput Operating Strategy in every TOC implementation we are involved in. In simple terms its a picture of the organization's workflow, and how they want to apply the 5 steps to managing their business. It documents the metrics, roles and focus of each department and level of the organization as we want them to function.I can't imagine embarking on a change the magnitude of TOC without having this blueprint of how the organization should look when it is working in the new way.
Change is hard enough, especially when it requires us to challenge so many fundamental assumptions and long-held beliefs as TOC does. I think we (the TOC community) have made it even more challenging by not giving people a clear picture of the target, the destination, the end state. What do you think?
The TOC concepts are not complex or difficult to understand. In fact by comparison, Lean and Six Sigma are far more complex and demand much technical knowledge of statistics, variation and the like. What makes the change to TOC more difficult is not learning the concepts, but it's coming to grips with all the ramifications those concepts have for how we run our organization.
TOC suggests a complete "re-modeling" of the organization, it's measures, the roles each function play, how levels work together, what information is important, etc. I don't think any of this will be news to most followers of TOC. I like the analogy of re-modeling the organization though, I think it offers an insight into one of the reasons TOC is not as widespread as it could or should be by now.
Think about what you would do if you were going to remodel something, say your house. What would be some of the steps you would take? Certainly you would sketch out some plans of what you want the house to look like when you are done. If it was a large enough remodel you would have a builder or an architect create detailed plans of the new layout. You would make sure that these plans then got in the hands of the builders so that they purchased the right materials, dug holes in the proper places, erected the correct structures, and executed everything you wanted properly. Without the picture (the drawing, blueprint, design) and the specifications it's hard to imagine the remodel turning out the way we want it to.
I don't think it's any different with remodeling an organization using TOC. Yet when I look at the ways TOC has traditionally been brought into organizations, I don't see many examples of blueprints for how the organization should look AFTER TOC has been rolled out. For the most part what we have given organizations is the generic process (the 5 steps) and a number of applications (DBR, Critical Chain, Throughput Accounting, etc.) to functional needs. To use the analogy of remodeling a house, these are akin to the generic process of building a house (first you dig the foundation, then you pour it, then you frame the structure, etc.) and the technical skills needed to do the various components of the remodel (the wiring, plumbing, drywall, etc.). While each of these is necessary to being successful, we still need to apply them to each organization's unique situation, and individual objectives. In other words we need the blueprint laying out how TOC is going to be applied in each specific organization.
Without a specific design for a given organization, we have no way of telling the builders (the managers and staff of the organization) what they should be doing, how they should be applying the skills and knowledge they have. Imagine hiring the best builder in the world, with the best process, skills and resources and then asking him to build you a great house without any plan, design or model. It's not likely the house would be well suited to your specific needs or desires.
I believe we have done much the same in TOC. We have great processes, and generic applications like DBR and Critical Chain, but for the most part we have not provided organizations with the picture of how to apply these capabilities in their environment. We haven't given them a very clear picture of what their organization looks like on TOC. And without a clear and visible destination it's hard to keep people focused, to keep them aligned and to keep them on-task. I believe this inability to see what my organization looks like on TOC is a part of the problem with TOC becoming more widespread.
This is not to say that there aren't some out there who have recognized and are addressing this shortcoming. Eli's Strategy and Tactic teams provide some of the missing specifications. Realization, the providers of Concerto for critical chain, typically does a first-class job of mapping out how each client's organization will look, including definitions of the roles and responsibilities, before launching into the change process. My organization, Viable Vision, utilizes a simple visual blueprint we call the Throughput Operating Strategy in every TOC implementation we are involved in. In simple terms its a picture of the organization's workflow, and how they want to apply the 5 steps to managing their business. It documents the metrics, roles and focus of each department and level of the organization as we want them to function.I can't imagine embarking on a change the magnitude of TOC without having this blueprint of how the organization should look when it is working in the new way.
Change is hard enough, especially when it requires us to challenge so many fundamental assumptions and long-held beliefs as TOC does. I think we (the TOC community) have made it even more challenging by not giving people a clear picture of the target, the destination, the end state. What do you think?
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.
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.