In the previous article of this series, we tried to determine what can be a constraint and what cannot. Identifying the constraint is the first of the Five Focusing Steps aiming to achieve higher throughput for an organization. One obvious prerequisite to identifying the constraint is that there can be only one – which is why for the longest time this was one of the basic premises of the Theory of Constraints. Eli Schragenheim’s TOCICO webinar in June of this year tried to challenge that idea.1
Blocking the flow
The Theory of Constraints defines the constraint as the factor limiting the performance of a system, a word that Schragenheim takes exception to. According to him, it is too vague to really be useful when identifying the constraint. Do large international organizations such as Google or BMW, present in countless markets and with several product lines and subsidiaries, really have only one constraint? Of course they don’t.
Schragenheim suggests replacing system with “flow” – which also gives greater relevance to the image of the bottleneck leading to a blockage. Almost all organizations have several of these flows: capital, products or ideas are just a few examples. Most of the time these are interdependent – leading again to only one, common, constraint. Certainly, this is the case for the three examples given. Sometimes, however, there are fully independent flows – each with their own constraint.
The flow – now and in the future
Schragenheim goes even further and identifies two flows which exist independently in nearly all organizations, and should be treated as such: the value flow and the flow-of-initiatives.
The value flow describes the flow of (current) products or services flowing from the business to the clients: the value produced by the business, on which it bases its turnover and its profits. This flow is anchored in the present, and our considerations in part one of this series pertain largely to this flow.
The so-called „flow of initiatives“ designates the improvement initiatives allowing the business to develop: the Strategy leading it from its current state to a superior future state. The resources involved with the flow-of-initiatives will generally be separate from the ones working on the value flow (only very small businesses or startups should have an overlap).
Improving on improvement
So can the Five Focusing Steps be used on this flow-of-initiatives? Of course they can, says Eli Schragenheim, and it is a worthwhile enterprise to do so: improvement initiatives too can be improved.
In the vast majority of cases, the constraint for the flow-of-initiatives lies within management. Eli Goldratt called it “management attention”, but Eli Schragenheim estimates that the issues are somewhat more diverse than that:
- Lack of knowledge necessary to objectively judge ideas;
- Unwillingness to take risk;
- Self-interest / ego interfering with what is best for the business;
- And of course lack of time and attention: in theory, there are an infinite number of ideas for improvement, but it is impossible to implement (or even consider) them all. Thus the “flow of ideas” is naturally limited by the management constraint.
The Five Focusing Steps in the flow-of-initiatives
How, then, do you efficiently apply the Five Focusing Steps to the constraint in the context of improvement initiatives?
- Exploiting means prioritizing and focusing on the most effective improvement initiatives. As is so often the case, it is important to know what to do and what not to do. This also means dropping an initiative if it shows itself to be ineffective. It is also important to avoid multitasking at all costs: only one initiative at a time! Trying to start several projects concurrently does not speed things up; it only leads to loss of focus. Additionally, it is difficult to measure the effect of an initiative if several changes are happening at the same time.
- Subordinating means always providing the management constraint with ideal conditions to make fast decisions. Ensure that:
- all necessary information is available at all times or can quickly be obtained;
- processes exist to allow for fast mutual decisions. Fundamental changes often require the agreement and experience of various departments, which tends to be a source of considerable frustration and delays;
- safety buffers are in place, such as a “plan B” or financial buffers in case of unexpected events.
- Potentially elevating the management constraint involves hiring additional highly competent managers. But be warned: too many cooks spoil the broth – the additional communication channels can easily disperse the attention rather than focusing it. It is important here to find the right balance.
The constraint isn’t everything
Schragenheim closes with a warning not to forget to look beyond the constraint: even if the constraint limits the flow, the quality of the flow (as opposed to the quantity) is influenced by other factors, such as erroneous assumptions or false paradigms.
The Five Focusing Steps provide a solid basis to lead your business into a better future. In the course of their implementation, the numerous other tools offered by the Theory of Constraints (such as the Evaporating Cloud mentioned in the previous article) can be applied to the core problems and invalid assumptions you uncover. The process of improvement and some of the tools used are presented in more detail in our six-part series on Continuous Improvement.
1: Eli Schragenheim, Re-evaluating the Five Focusing Steps, TOCICO 2015