Theory of Constraints POOGI Part 65 You want me to do WHAT?

In Theory of Constraints we follow a process to improve. First we decide "what to change". To do this, of course, we need to agree on the problem(s). Once we have consensus on the problem we then work on the solution or "what to change to". And after that, we decide "how to cause the change".

It all sounds very straight forward and logical and it is. This process does work, but at times it can prove to be challenging -- especially when we don’t take enough time to agree on the problem. So Brad and I are especially vigilant about that. Because there is really no point to moving into discussing the possible solutions unless and until we have agreement on the problem. Every time we’ve pushed ahead too fast we always have to go back and get agreement on the problem.

This is particularly true when we are talking about problems that the Theory of Constraints (TOC) logistical solutions will solve. So Brad coined the expression “we are going to go slow so that we can go fast”. That approach has helped us to get better, faster results with clients. Then we teach our clients to do this each time a challenge, problem, or opportunity presents itself. And, with a little coaching and guidance, they also get very good at this.

Then we move to agreeing on "what to change to". Now, you would think this should be pretty straightforward once we’ve agreed on the problem, but we have found it’s not that easy. Why?

• There can be multiple solutions that would work or we think there are multiple solutions that could work.
• People are only comfortable with solutions which they are familiar with and have intuition around.
• We don’t know what we don’t know.
• The Theory of Constraints solutions are often counterintuitive, the opposite of what most people do now, and most people have no familiarity or intuition around them.

So you can see, if the solution is to implement our Velocity Scheduling System for scheduling job shops (based on Goldratt’s Theory of Constraints and Simplified Drum Buffer Rope) we may get some push back (aka You want me to do WHAT?) even AFTER we have successfully agreed on the problem.

In fact we’ve had some job shops suggest that we must have been hiding out in their shop when we wrote "The 9 Challenges to Scheduling Jobs Shops and Why Your Schedule is Dead on Arrival".

That is the highest compliment someone can pay and we have clearly agreed on the problem. Then those same companies argue and resist every step of the way during implementation. This was super frustrating until we learned how to get them to agree on "what to change to".

So how do we get the key people in a highly custom job shop to do the totally counter intuitive steps of the Velocity Scheduling System? Well, instead of pushing the steps of a system they don’t understand, don’t agree with, and have no intuition around - we build on a previous success.

... next week I'll take you through how we do that.

 What's your experience with getting buy in? Please tell me in the comments of this post.

Theory of Constraints POOGI Part 59: Do you have an Exit Plan? Why not?

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}


There is nothing as fundamentally important as having an Exit Plan. The purpose of exit planning is for owners to achieve their financial and lifestyle objectives after they leave their business. It covers when you plan to exit, how much you’ll want or need from a sale/transfer of ownership, and to whom you want to transfer (a third party, family, or employees/co-owners).  Some people refer to it as succession planning, transition planning or just selling my business.


Dr. Lisa: What’s Exit Planning have to do with TOC, Lean, Six Sigma and continuous improvement?

Brad: It is consistent with TOC’s three questions. What to change, what to change to, and how to cause the change. When a business owner decides how much he or she needs from the sale of the business by when, we can calculate the growth is needed to accomplish the objective. A business that has put in place excellent processes—the kind TOC, Lean, and Six Sigma provide—coupled with a management team that can operate without being dependent on the owner, is much more valuable.

Dr. Lisa: How is exit planning done?

Brad: First, the business owner works with an exit planning advisor to develop the framework for his exit plan. This is usually developed by answering a series of questions aimed at determining when he wants to exit, how much is needed from the sale/transfer of the business in addition to other personal resources, and to whom the business owner wants to sell/transfer the business.

Next, the exit planning advisor coordinates the business owner’s other advisors—like the CPA, Estate Planning attorney, financial/insurance advisor, and business consultant—to flesh out the plan. From then on, apart from course corrections, the plan is being implemented over time until the ultimate exit.

Dr. Lisa: Are most businesses ready to sell?

Brad: No, most are not ready to sell. And a business that is not ready to sell will either be sold for less than the business owner needs, or it will be liquidated.

Dr. Lisa: In real estate, it is well known that before you buy a property, you have an exit strategy. Is this true for businesses, too? Do most business owners go into business with an exit plan?

Brad: No, most businesses are owned and run by entrepreneurs that have grown their business over time. Most of these owners are totally consumed by running their business, and have not thought enough about their eventual exit from the business. This is unfortunate because it can take several years to make the business valuable enough to meet their financial and lifestyle objectives after they leave the business.

... to be continued.  (more on exit planning next time)
 
Here's to maximizing YOUR profits!
Dr Lisa Lang

(c)Copyright 2009, Dr Lisa, Inc. All rights reserved.

A Process Of On-Going Improvement (POOGI) - Part 26

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.

Whether you’re selling stuff or just trying to get the collaboration of other people, you need buy-in. Do you follow a buy-in process?

As W. Edward Deming, father of the Quality Management revolution said, “If you can't describe what you are doing as a process, you don't know what you're doing.”

So let’s describe the buy-in process that was developed by Dr. Eli Goldratt, father of the Theory of Constraints (TOC). Big picture, the steps are:

• What to Change?
• To What to Change?
• How to Cause the Change? more information on the TOC Thinking Processes

You use a buy-in process to accomplish business objectives. For a profit-seeking company, the overall company objectives can be generalized as:

• “Make more money, now as well as in the future”, and
• “Provide a secure and satisfying environment for employees now as well as in the future”, and
• “Provide satisfaction to the market now as well as in the future”.

Usually though, buy-in is sought related to a more specific objective and you should verbalize what that is. This more specific objective should make sense in relation to the overall business objectives of the company.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.


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