The tools presented over the previous posts allow you to identify what can be changed in your organization (using an enabling, rather than a limiting approach) as well as what should be changed (by focusing, i.e. not everything at once). What now remains is determining what the organization should change to: what new reality is to replace the current one?
Eight criteria for a breakthrough solution
The proposed solution is set against the previously mentioned obstacles and gaps, its aim is to eliminate or overcome each of them. Based on these needs, Dr. Barnard offers the following criteria that a satisfactory solution should fulfil1:
1. Knowing where to focus scarce resources.
2. Allowing you to quantify the impact of the change.
3. Raising stakeholder expectations (esp. upper management), thus ensuring full support.
4. Allowing each stakeholder to actively contribute to the solution.
5. Eliminating inertia, complacency or fear of failure.
6. Aligning everyone’s priorities towards the goal of the organization.
7. Ensuring a high success rate (70% success rate rather than 70% failure rate).
8. Reducing time to detect and eliminate wrong assumptions or poor execution.
The right solution will remove the identified core conflict and its undesirable effects, without creating new undesirable side effects. While this list of criteria can be slightly intimidating at first, the comprehensive toolkit offered by the Theory of Constraints (of which we have already seen the Evaporating Cloud) can help you working out the best solution for your particular circumstances.
The TOC toolkit
The Five Focus Steps
The Five Focusing Steps are another important tool. How to apply them in practice has previously been described in more detail in this blog post.
The five steps on their own constitute a process of Ongoing Improvement: the last step (“If the constraint has moved, begin the process anew”) ensures that the organization is constantly developing: once you have eliminated the constraint – i.e. the most pressing problem (at that moment in time), you move on to the next one (which has now inevitably become the constraint).
This focus on the constraint does not mean, however, that nothing at all is happening in the remainder of the organization. Quite on the contrary: as everything subordinates to the constraint, these areas are also focused on improving the system. Dr. Barnard calls this the “good enough” threshold, which ensures that the constraint can work at an optimal level. If a non-constraint performs below its threshold, it harms the entire system (and may itself become the constraint). The same applies if it improves too much (by using local targets / optima) and negatively impacts the constraint.
Buffer Management as performance indicator
With Buffer Management, the TOC offers another useful tool which helps setting and monitoring this “good enough” threshold level. A buffer (of time, inventory, etc.) protects against uncertainty during planning. By dividing it into three color zones and regularly updating it, you can then use this as a performance indicator during implementation. You can find out how this works in practice in this blog post.
Dr. Barnard warns against using incentives and rewards to drive or guide performance. Too often, this turns into an end in itself, with the actual goal dropping out of sight. Humberto Baptista also explains the risks of incentives, as you can find out in this blog post.
The TOC Thinking Processes
On your way to the solution, you can find another helpful tool in the TOC Thinking Processes. These were originally developed to assist with implementing the Five Focusing Steps and offer a general framework as well as specific methods to answer the three fundamental questions of each change:
1. What to change?
2. What to change to?
3. How to cause the change?
Here you will come across the previously mentioned Evaporating Cloud and other tools such as the Current Reality Tree or the Prerequisite Tree, which can serve as step by step guides towards your solution.
The Thinking Processes are often implemented in the course of a five day workshop with stakeholders of the change, allowing them to collaboratively develop the solution needed. The first day is usually dedicated to the question “why change”, while the last day (after treating the three main questions) concerns itself with measuring and monitoring progress.
In this way, the Five Focusing Steps and the Thinking Processes already offer a complete toolset to implement Continuous Improvement. The Viable Vision developed by Goldratt later in his life takes this process further and builds a long term growth strategy based on the Five Focusing Steps.
The final post of this series will talk about how to actually reach the goal you have set; using Strategy and Tactic Trees for concrete implementation.
____________________
1: Dr. Alan Barnard, “Continuous Improvement and Auditing” Cox III, James F., and Schleier Jr., John G., Ed. Theory of Constraints Handbook. New York: The McGraw-Hill Companies Inc., 2010. p. 418f.
