Theory of Constraints + Change management

Theory of Constraints (TOC) provides a set of holistic processes and rules, all based on a systems approach that exploits the inherent simplicity within complex systems through focusing on the few "leverage points” as a way to synchronize the parts to achieve ongoing improvement in the performance of the system as a whole.

What prevents us from achieving the goal?

CONSTRAINTS – factors or elements that determine how much the system can accomplish.

Main types of constraints of a commercial system:

Capacity Constraint – a resource which cannot provide timely capacity the systems demands for it.

Market Constraint – the amount of customers’ orders is not sufficient to sustain the required growth of the system.

Time Constraint – The response time of the system to the requirement of the market is too long to the extent that it jeopardizes the system’s ability to meet its current commitment to its customers as well as the ability of winning new business.

THE FIVE FOCUSING STEPS OF TOC

1.       Identify (choose) the system’s constraint.

2.      Decide how to exploit the system’s constraint.

3.      Subordinate everything else to the above decision.

4.      Elevate the system’s constraint.

5.      If the constraint is broken go back to step one but do not allow Inertia to cause the system’s constraint.

TOC IS BASED ON 3 BASIC ASSUMPTIONS

Basic Assumption 1:

Everything within a system is connected by cause and effect relationships. Identification of the causes leads us to converge onto an apparent core problem/contradiction/conflict.

Manifestation: Search for a logical reasoning

The use of Cause & Effect relationships to structure our thinking, record our analysis and understand the suggested solution for any problem (based on Convergence)

Basic Assumption 2:

All contradictions can be resolved without compromise – our level of understanding and our assumptions hold the contradiction in place. A compromise is not usually a win-win solution.

Manifestation: Resolve conflicts

A strong belief that there should be no conceptual conflict within our reality – hence – striving to find a win-win solution to any perceived "no solution situation” (Local & Global)

Basic Assumption 3:

There is no resistance to improvement – people do not embrace change because we have not brought them to see the win for them.

Manifestation: Seek for collaboration and contribution

The use of TOC logical tools logic to communicate to ourselves and thereafter to the team with the view of working together to achieve the desired improvement (based on Respect)

The Leader of a system sees their role as to ever improve the performance of the system under their responsibility.

Improved performance is a result of implementing a new idea ("solution”) onto the existing system.

The manager who introduces the solution needs to know:

 1.     Which parts of the system are "erroneous” and have to be replaced

2.     The new parts must be introduced to replace the erroneous parts

3.     All the other parts of the system stay as they are!

Managers need a systematic approach to develop plans for the pursuit of a significant improvement of their systems. This systemic approach is about finding answers to the four questions of system improvement.

1.     WHAT to change?

  Pinpoint the core problem

2.     WHAT to change TO

  Construct simple practical solutions

3.     HOW to cause the change?

  Induce the proper people to make the change (to invent such solutions)

4.     What creates the process of ongoing improvement (POOGI)?

        Create a mechanism to determine what to improve next

 

Solution creation:

TOC enhances the ability of managers to develop or construct solutions for improving the performance of their systems. At the same time – TOC also enhances the ability to communicate the solution to the proper people that their support and collaborations is necessary for implementing the solution.

Answer these questions in this order:

1) State the change. Be very specific, what you are suggesting be changed?

2) What’s your alligator? What’s the negative of not changing? It is something bad or negative that exists today, and unless a change is made will not go away and will hurt you/us.

3) What’s your mermaid? What’s the positive to not changing for you? It is something good you/we have now, that because of your change you/we will likely lose.

4) What’s your pot of gold? What’s the positive to making the change for you? It is something good you/we don’t have now, but you/we want, and you think we can get if the change is made.

5) What’s your crutch? What the negative to making the change for you? It is something bad (for you/we) that doesn't exist today, but can and most likely will happen if the change is made.