Monday, April 28, 2014

Focus and Leverage Part 343

In my last posting, I finished by saying that I would discuss more on the different facets of Constraints Management (a.k.a. Theory of Constraints).  In this posting, I want to discuss TOC’s Thinking Processes and how you can use them to identify and isolate your organization’s core problem(s).  Within all organizations, there are numerous negative symptoms, or undesirable effects (UDE’s), that exist. And if your organization is like many others, what typically happens when these UDE’s are identified, many organizations tend to move into a fire-fighting mode to eliminate the symptoms of the true underlying problem.  But is this the right approach?

The Thinking Processes (TP’s)

Constraints Management offers a set of tools that allows an organization to do a “deep dive” into the observed negative symptoms to find the root cause of many of these negative symptoms.  And when the true root cause is uncovered, it is then possible for organization to develop viable solutions.  These tools use both sufficiency and necessity based logic as they identify and isolate organizational negative symptoms.  Sufficiency based logic applies a series of “if-then” statements to identify cause and effect relationships between the observed UDE’s.  On the other hand, necessity based logic uses the syntax, “in order to have x, I must have y.”  An example of this type of logic would be, in order to have a fire, I must have fuel, fire and air.  The fuel, fire and air are referred to as Critical to Success Factors (CSF’s) which must be in place to have a fire.

The improvement conundrum revolves around successfully answering three very important questions as follows:
1.  What to change?

2.  To what to change to?

3.  How to cause the change to happen?

The Thinking Process tools help provide the answers to these three critical questions and are used to construct powerful and practical solutions to your organization’s specific core problems.  Each of the six TP tools can be used separately or together to achieve breakthrough solutions for your organization.  Originally, there were only five of these tools, but now, thanks to William Dettmer, there are six tools as follows:

  • The Goal Tree (originally named the Intermediate Objectives Map (IO Map))
  • Current Reality Tree (CRT)
  • Conflict Resolution Diagram (CRD, also known as the Conflict Cloud and Evaporating Cloud)
  • Future Reality Tree
  • Prerequisite Tree
  • Transition Tree

I won’t be discussing the details of each of these logic trees, but I will be demonstrating their logical progression of use, or perhaps a better way to say this, is their interconnectedness.  Having said this, I do want to discuss one of these tools in a bit more detail, the Current Reality Tree.

A Current Reality Tree is a sufficiency based logic tree that uses if-then statements to ultimately identify an underlying core problem and the symptoms that we see in our system because of it. The structure of the CRT is a logical map of a sequence of cause and effect statements originating from, many times, a single core problem for the symptoms we see.  If we can identify and neutralize this single core problem, usually we will be able to remove most of the observed negative symptoms. In constructing a CRT, we work backwards from the apparent undesirable effects or symptoms to discover the underlying core problem.  So, how do you do this?

Using brief interviews from a cross section of key employees, we ask them to complete the following statement.  “It bothers me about (Your company’s name) that……..”  The responses to this question are the UDE’s that exist within your organization.  It’s important to understand that the UDE’s must be real issues and not personal “gripes,” so time must be spent listening to and observing the organization for conclusive evidence of the existence of each UDE.  Many times what someone thinks is happening, can be far removed from what is actually happening.  This UDE gap can widen between what you are told versus what actually exists.

The CRT forms the basis for the remaining four TP tools which are listed in the diagram below.  Although the graphic below displays the Current Reality Tree as the second of six tools, many times it is the first step in the TP analysis.  As I said earlier, William Dettmer introduced a new tool, the Goal Tree, which is used to establish the organization’s Goal as well as the logical steps to achieve it.  There are people within the TOC community that have rejected the introduction of the Goal Tree as one of the logical Thinking Process tools, but I, for one, believe its introduction was not only a wise one, but an important one.

Each box in the diagram below reflects the TP tool to use and what each one will provide to the user.  Directly beneath each box there are questions that each tool answers.  For example, for the CRT we see that it answers two important questions, "How can we decide what to change?” and “What is our core problem?”  The CRT uses sufficiency logic (i.e. “if-then” statements) to connect many of the organization’s undesirable effects until ultimately the core problem(s) has been identified.

In any organization there are bound to be conflicts that arise within it.  Sometimes these conflicts are between two ideas or two courses of action and there needs to be a way of resolving them.  The Conflict Resolution Diagram (CRD), also known as the Evaporating Cloud and the Conflict Cloud, is another of the TP tools and is used to better understand the basis for these conflicts. So how do you know when it’s appropriate to use the CRD?
Suppose that you have completed a Current Reality Tree and you see that the root cause(s) of an undesirable situation arise out of a conflict.  This conflict can have one of two forms, contradictions and exclusive alternatives.  In a contradiction, one side believes that they must do “x” and the other side believes they must not do “y.”  For example, one political party in government believes it must spend money to revive the economy, while the other political party believes it must spend less money to shrink the deficit.  This is clearly a conflict that must be resolved if progress is to be made.

The other type of conflict, exclusive alternatives, occurs when you need two critical success factors or necessary conditions to reach your goal, but you can’t have both.  Typically we might lack resources like money, time, or people in order to pursue both alternatives.  For example, you want to spend time at work delivering value, but you also need to spend time at work learning, but you don’t have time to do both.  In exclusive alternatives, you need both “x” and “y” but because you can’t have both, you need to choose between one or the other.  One thing we don’t want is a compromise or a win-lose solution, we want a win-win solution.

In both of these scenarios a CRD can be used to better understand the contradiction or exclusive alternative with one or more of the following outcomes.  We might discover that the assumptions behind the conflict are actually incorrect and that there really isn’t a conflict after all, but rather a simple misunderstanding.  We may also discover that the conflict can be resolved without compromise, if we can have or do something else, by inserting a new idea called an “injection” and then agree to explore ways of achieving the injection. If this is the case, we can use the next TP tool, the Future Reality Tree to explore the consequences of implementing the injection.   Again, a win-lose or compromise (or lose-lose) solution is not acceptable.

Once we have identified and accepted the necessary injections or ideas to improve the situation, we can then explore them by using the Future Reality Tree and Prerequisite Tree tools. We can then establish a plan of action by using a Transition Tree.  The TP Tools, when used in tandem or in isolation can be a formidable way to identify and solve a plethora of problems we observe within the organization.

In my next posting, I want to discuss a subject that I have discussed numerous time before, TOC’s version of accounting, Throughput Accounting.
Bob Sproull

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