Wednesday, March 6, 2013

Focus and Leverage Part 191

I know that I promised to get back into a posting on performance metrics, but I’ve been involved in a discussion on my favorite LinkedIn Group, TLS.  This discussion has centered around the use of my favorite tool of all time, the Intermediate Objectives Map (IO Map) which Bill Dettmer now refers to as a Goal Tree.  Although I have tried to change my reference to the IO Map as a Goal Tree, it just doesn’t seem right to use this expression even though the principal developer of it (Bill Dettmer) has changed its name.  I know I’ve written about this tool before on my blog, but there’s more to say about it.

First I want to state unequivocally that the IO Map does not replace Goldratt’s original Thinking Process (TP) tools such as the Current Reality Tree (CRT), Conflict Resolution Diagram (CRD), the Future Reality Tree (FRT), etc.  But what I am saying is that for me (and I might add Bill Dettmer recommends this as well), the IO Map is the natural starting point for the use of the TP tools.  Actually the true starting point is to first define the boundaries of the system we are studying primarily to determine which elements of our problem lie both within it and outside of it.  The reason we start with boundaries is because we need to know which elements are within our span of control and which fall within our sphere of influence.  Those elements that fall within our span of control are those things that we have unilateral decision and change authority on while those that fall within our sphere of influence are those things that we can only influence.

As Dettmer rightfully points out in The Logical Thinking Process, “the distinction between span of control and sphere of influence is important because we can influence far more than we can control.  The Thinking Processes provides us with a way of expanding our sphere of influence to include things we never thought possible.”  So let’s take a look at the basic elements of the IO Map in more detail……namely the Goal, Critical Success Factors and Necessary Conditions.

So exactly what is the purpose of a Goal?  I think Steven Covey said it best with his immortal phrase “Begin with the end in mind.”  A goal is an end-point, a destination if you will, for which we strive to achieve.  For example, suppose you are overweight and you want to lose….say 50 pounds.  Your goal then might be as specific as losing 50 pounds.  Who sets this goal?  If you are the person who wants to lose 50 pounds, then it’s very clear that you set the goal.  But what if you’re the owner and CEO of a company.  Since you own the company, doesn’t it stand to reason that it’s you who decides what the goal is for your company?  In other words, the goal is established by the owner(s) of the system and it is stated as though it has already been achieved.

The Critical Success Factors, on the other hand, are the high level requirements that must be in place before the goal can be achieved.  The CSF’s are also stated as though they were already in place… terminal outcomes.  In our simple example of losing 50 pounds, our CSF’s might be written as follows:
Because the IO Map is a necessity based logic structure, it is read as, In order to become 50 pounds lighter, I must eat healthy, exercise regularly and avoid stressful situations.  Each of these three CSF’s are stated as terminal outcomes that must realized and achieved before we can achieve our goal of being 50 pounds lighter.  One could argue that these aren’t the CSF’s someone might select for losing weight, but for demonstration purposes, they will suffice.

The next level of the IO Map are Necessary Conditions (NC’s), but unlike the Goal and CSF’s, the NC’s are written more as activities that must be completed before each of the CSF’s can be realized.  As such, the NC’s are seen as discrete actions that must be taken to achieve the CSF’s.  The NC’s form the basic foundation for the entire necessity based logical map.  It is from the NC’s that improvement action plans can be developed.

As I said earlier, what prompted this posting was a discussion on the LinkedIn Group, TLS where one of the members asked the question, “What are the best Lean or TOC metrics to use to analyze the current state of a manufacturing site?  There were lots of suggestions forthcoming and then I recommended using an IO Map.  So what does the IO Map have to do with developing the best Lean or TOC metrics to analyze the current state of a manufacturing site?  Let’s look at an example from Epiphanized that Bruce and I used to demonstrate how this can be done.
Joe and Sam, two of the key figures in Epiphanized, had been asked to help a corporate team come up with a list of key performance metrics.  Joe knew that everyone would necessarily have to agree on a goal. Knowing this group was motivated by money and financial metrics, he suggested that the goal should be read, “Make more money now and in the future,” and everyone nodded in acceptance.  Joe then explained the concept of the Critical Success Factors (CSFs) and Necessary Conditions (NCs) to the group.  After many attempts to develop a complete IO Map, the group finally agreed on the final version.  It was not perfect, but for its purpose today, perfection wasn’t a prerequisite.  After all, the real purpose of this team was to develop a new performance measurement system, and this diagram would facilitate that objective.
The next step for the team was to focus on what metrics would be used to evaluate Barton’s overall performance in the days to come.  With that in mind, Becky suggested that the group take another fifteen-minute break.  So how do you think it’s going Becky?” asked Joe as he lit his cigarette.  “I think it’s going very well,” she replied.  “Let’s just hope that the selection of metrics will flow as easily,” she added.

Just as Joe and Sam lit another cigarette, Paul came out to join them, and to their surprise, he actually complimented them on their work so far.  Needless to say, they were all stunned, but they were even more stunned when Paul asked if he could lead the metrics piece.  “Of course you can, Paul, and if you get stuck, we’ll be here to help,” said Becky. And with that, they went back into the conference room.

Paul, who was a character who previous to this meeting had been adamantly against the adoption of Throughput Accounting, was simply brilliant in his leadership of this phase of the group’s activities, and the final outcome, the IO Map with metrics, was a thing of beauty—at least that was the consensus of the team.  It was clear that Paul had just been epiphanized and it would not go unnoticed or unreported in Becky’s mind.  Paul had somehow managed to incorporate all of the Throughput Accounting metrics and formulas into a single blueprint for Barton that everyone agreed would work.
So there you have it, an example of how performance metrics can be developed by first starting with an IO Map.  While the metrics for the Goal and CSF’s are high-level organizational metrics, as we move down through the organization other important lower level metrics can be developed and tracked.

Bob Sproull




Jim Bowles said...

Bob Your inertia to give credit to Bill Dettmer's invention to his preliminary process that he called the Goal tree is both misleading to others and a distortion of the Goldratt TOC Roadmap. I was present when we taught the IO map process to a group of MSW licensees as part of the Achieving Ambitious Targets session on 1995. Bill and you use his shortcut process to help focus on relevant UDEs but that is not method used or taught by the Goldratt team/

Bob Sproull said...

Jim, I give Bill credit for popularizing the IO Map, not for developing it. In his own books he does not take credit for their existence. Many people such as yourself like to stay firm and rigid in the teachings of the TP Processes, but as you know, they a difficult for some people to grasp and use. The beauty of the IO Map is that they are simple to learn for many people and although the results aren't as dramatic compared to a full TP analysis, the IO Map does get credible results. I do appreciate your comments Jim and I apologize to the Goldratt team if I mislead you. I will, however, keep promoting the IO Map (a.k.a. Goal Tree) as well as the other TP Tools. In fact, I agree with Bill when he told us to begin the analysis with an IO Map (Goal Tree). Thanks again for your always upbeat and supportive comments about the things people write. Bob

Erik M. said...
This comment has been removed by the author.
Erik M. said...

For having followed Bill Dettmer's Workshop in November 2012 in LUXEMBOURG, I would also like to give all my support to the GOAL TREE (previously IO MAP) as it is something people can practically do without hours of training.
And just letting them do their Goal Tree makes them understand what Critical Success Factors are and thanks to that, very often they think that their goal is actually just a CSF... That does not mean a CSF is not important, but it means that you have realized what "was your goal" was only a necessary step to "reach your goal"

Bob Sproull said...

Thanks for your comments Erik and I absolutely agree with everything you said.