Moving the organization

In this article I make two assumptions about you, the reader. My first assumption is that you have seen the 8 sessions of my Satellite Program. If this is wrong and you continue reading, no harm will be done except for wasting your time. My second assumption is much more daring. I‘m assuming that you agree with me that achieving the strategy described in Session 8 is a very desirable target and you are wondering how to accomplish it in your organization.

There are many obstacles standing in the way, all stemming from one core problem. It is the same core problem that we have struggled with in each one of the 8 sessions. This core problem is the rooted tendency to judge actions and decisions according to their local impact as if it is a good indicator for the global impact. Or, as we called it in short, "the cost world mentality."

Persuading an individual

Before we delve into dealing with the multitude, one thing is clear. No matter what your position is in the company, being the CEO or being at the very bottom of the management hierarchy, you‘ll have to persuade people; you will have to convince them to abandon the cost world and embrace the throughput world. In other words, you must induce them to go through a mammoth paradigm shift.

So before we discuss the recommended tactics needed to convince the organization, we have to clarify to ourselves whether or not there is a reliable method to convince an individual. Without such a method the chance of convincing the whole hierarchy seems slim to nothing. So the question that I would like to discuss first is: How do you convince a person to abandon the cost world and embrace the throughput world?

Do you have any experience, good or bad, of attempting to do such a thing?

I am quite convinced that you do. Let me speculate that after reading TheGoal you tried to tell others about it. As you struggled to explain the ideas you‘d read in The Goal, you probably encountered a mixture of two types of reactions. People rejected your arguments and/or dismissed them: "We are doing that already". In your frustration you found yourself saying, "Just read it." Once the book was read, the reactions were much more positive.

The difference between your explanations and The Goal are not differences in content, but differences in the structure of the arguments. The Goal follows (masterly, even if I say so myself) the buy-in process described in Session 6: reaching agreement on the problem, on the direction of the solution, on the solution, etc.

The six points

We can learn, from our experience with The Goal, some important lessons about what is needed to put a person through a paradigm shift:
1. The buy-in must be done following, rigorously, the process described in session 6.
2. The buy-in must be done perfectly. There is almost no room for mistakes.
3. There is no need to start with the details of the specific environment.
As a matter of fact, an explanation based upon a more generic environment is less offensive and less liable to raise defensiveness. Relating to the details of a specific environment helps after agreement on a step has been achieved, not before.
4. Any attempt to cut corners, to use abbreviated or "more to the point" explanations, usually ends in a less than desirable outcome (a British understatement).

In the case of The Goal, the way to deliver its message was to use the book itself. We are now facing a much bigger challenge: we need to convince the organization to embark on a sincere effort to implement the future reality tree described in Session 8.

There is no doubt, the four lessons we learned from using The Goal are even more important for our current challenge. Are there any additional requirements?

In The Goal, the paradigm shift was confined mainly to production. Here it is clear that the paradigm shift will have to engulf all aspects of the organization. We are about to ask people to believe that not only will their department adopt a new paradigm, but other departments will also adopt new paradigms. To convince a person of that is not easy; they must be convinced that the changes needed in the other departments are nothing but "common sense." That means that we have to convince people about the need for
changes in functions in which their intuition and experience are limited.

What about motivation? Most people in most organizations are quite skeptical about the chance of achieving major changes in several departments in sync. For a person to collaborate with such an attempt, motivation is of the utmost importance. That means that the buy-in must show how every section is connected to the others, and how all sections combine to generate something
much bigger than the individual changes.

So let‘s add two more points to our list:
5. The buy-in must be good enough to convince people on issues about which they have limited intuition and experience.

6. All sections must have strong interconnection leading to a total which is bigger than the sum of the parts.

Read the six points above again, keeping in mind our objective: "convincing the organization to embark on a sincere effort to implement the future reality tree described in Session 8."

Now, ask yourself whether or not the same tool that convinced you to embrace the big picture can achieve it - namely, the 8 sessions of the Goldratt Satellite Program.

I believe that currently, and probably in the foreseeable future, there is no alternative.

Will the tapes do it?

The last statement may look self-serving (and in a way it is) but that doesn‘t mean that it is not correct. In the last ten years or so I‘ve
personally invested a lot of time and energy trying to move companies to adopt, not just some selected applications of TOC, but the overall strategy. In some cases I succeeded; in most I must admit just partial success.

Assuming that I do have deep knowledge of TOC and further assuming that I‘m not a bad presenter, based on my experience my conclusion is decisive: I don‘t know any other way we can use to cause people to reach the conclusion that the strategy described in Session 8 is the desired strategy and that it can be implemented. Nothing else can do it, but the question is, can the GSP tapes do it? And that, at this stage, is an open question. That is where I need you, the members of the POOGIforum, to help develop a reliable answer.

If we believe that a sensible and doable strategy is vital for companies, their employees and their shareholders, we must find the answer. And if the GSP tapes do work (as I expect) we must find and refine the best ways to effectively use these tapes.

So from here on, what I‘m writing in this article is not verified by direct experience (remember the Satellite Program has finished only this month). Nevertheless, it is not based on guesses. It is based on cause and effect logic which, like any cause and effect structure, before it is put to the test of reality may suffer from erroneous hidden assumptions. So read carefully. Think. Decide. Act. And then write to me about your real life experiences and observations. What did work. What didn‘t. What modifications you found to make it work.

Our working assumption is that if we want people to sincerely adopt the TOC strategy they should be exposed to all (or almost all) of the tapes. This brings us to the first obstacle.

The time/attention obstacle.

Seeing all eight sessions requires about 24 hours. People are busy. It is unlikely that most people will agree to devote so much time to see videos.

Overcoming the obstacle: Suppose that we are dealing with some people who trust your recommendation to the extent that they are willing to give it a try. A try doesn‘t mean that they are willing to devote 24 hours. Let‘s realistically assume that, at the start, they are willing to commit to just one hour.

What should we do? We are in a conflict. On the one hand, in order to achieve their buy-in to the TOC strategy, we need to expose them to many, many hours. On the other hand, to get them exposed at all we must limit it to just one hour.

The compromise approach might be to search for the appropriate section of the tapes for the specific person. But we are not going to use a lousy compromise - we are going to check our hidden assumptions. The one that I‘ve chosen to attack is the assumption that the time people are willing to devote before they have seen any part of the Goldratt Satellite Program material is the same amount of time they are willing to devote after viewing material for one hour. If we use the hour effectively we all know that this assumption is
usually unfounded.

How should we use this precious hour?

Judging from what people usually do in such cases I‘m afraid that this hour might be devoted to present a summary of the tapes, using examples which fit the environment of the audience‘s specific organization.

This cannot be the answer. Remember the fourth point of the lessons we learned from The Goal: "Any attempt to cut corners, to use abbreviated or ‘more to the point‘ explanations, usually ends in less than desirable outcome (a British understatement)." Since we learned it (the hard way) in a case where the issue was narrow, we‘d better not repeat the same mistake for our much broader case.

Another thing that I‘m afraid that people will do is to bring in an expert to give a one hour, or even a three-hour presentation that will paint the whole picture.

Read again the above warning. An expert, if s/he is really good, can persuade top management in a few hours to move on one subject, but I don‘t know anybody who can move the company on the new strategy. I certainly cannot and I‘ve tried. More than once. I have personally succeeded only in cases where I had at least five full days.

My suggestion is to use the hour to show the beginning of tape one.

I think it will work since people do want to work in a better environment, they have a lot of experience and a lot of intuition. Besides, we don‘t want to manipulate people, we want them to reach the conclusions on their own. So why cut corners? If the material is good, a one hour teaser should suffice to cause them to want more.

Actually if we examine again the first hour of the first tape we see it serves as an excellent teaser. The first hour of the first tape introduces the paradigm of the system approach versus the prevailing practice of local optima. Operations is the subject used to demonstrate the paradigms. People working in an organization, no matter what their specific jobs, find it interesting since they do have an intuitive recognition of that core problem.

In order for them to more fully understand the material and also to let them get a feel as to how much more material the program covers I would recommend giving each viewer the Viewer Notebook. I‘m convinced that if we do this, at the end of the hour people will ask to see the Sessions which they think relate to their job.

Should we? Maybe. But let‘s not forget that if we want them to really adopt the strategy we had better try to expose them to all the GSP Sessions. Preferably in sequence. So why won‘t we try suggesting that they will watch Session One until the end. There is a high chance that they will agree. True, initially they were not interested in the solution for Operations. But how many people do you know who are going to object to seeing a solution to a problem they (now) appreciate?

If they do see the first tape in its entirety, I think it will be easy to convince them to see Session 2, Measurements. Not just because of what I say at the end of Session One - but because after watching the first tape, it is apparent that adopting the system approach requires a reconsideration of all measurements. And discussing measurements (once recognized as a problem) is relevant to any person holding whatever job.

After seeing the two tapes there is a high chance that the viewers are now also interested in the logic. The logic of hard science, applied rigorously for the first time to the field of organizations. For those for whom it is not the case, I think that we should supply, at this stage, the reason for seeing all the tapes. And the reason is, of course, solving the conflict presented in session 8; the one that if not solved endangers the future of any company.

So let‘s show them the first half of Session 8, up to the point where I start to explain the tree; the point where it is obvious that all the previous sessions are mandatory. That, I would guess, will move more than 50% to see all tapes in sequence.

Why not simply start with the first half of Session 8? Because I‘m afraid that it will not trigger the desired reaction. Not because people will disagree or find it too difficult to understand, but because at that stage people will assume that there is no practical solution. And many might conclude that since there is no practical solution there is no point in wasting the time. The first two sessions are needed to convince people that TOC is capable of supplying solid solutions to seemingly unsolvable problems.

Let me add one point. So many times I have good intentions but somehow I don‘t succeed to do them. I‘m not talking about big (somehow I don‘t have a real problem with them) but on little things. Like going to the gym each morning, or studying Esperanto. Why do I mention it? Because unfortunately it is very relevant to our subject.

Suppose that a person takes the eight tapes with the firm intention of seeing a tape per day. What are the chances that he/she will actually do it? If they are like most people that I know , the chances are not particularly high. If we want people to actually see the tapes I strongly recommend that you schedule specific times to watch them, in groups. Enough said.

As you can judge for yourself, my suggestions may make sense but they certainly need to be checked in and by reality.

Persuading a group

So far we have dealt with people who were willing to give it a try; to devote some time to watching a tape. What about those who refuse? The ones who are too busy to see another "flavor of the month" tape?

Many times what one person cannot do, two or three can. Observe our own behavior. Suppose a friend has recommended a movie. We might ignore hem. But if we were approached by several people, each recommending the same movie, the chance that we will see that movie significantly increases.

Our ability to influence people to devote time to watch the GSP might be limited. But still, we can persuade some people. As more people watch the series, and grasp its importance, their ability to persuade others grows. If the group is big enough it triggers "social pressure". That will move everyone except for the real hard nuts. Such people are a small minority and as long as one of them is not your boss, don‘t worry; they will be persuaded by the results.

If you can persuade almost everybody to give it a try, who should you pick first? I recommend that you start with the more experienced and skeptical people. The ones that nobody suspects will become enthused with a flavor-of-the-month fashion.

Why? Two reasons. First of all, it is good to check, by using others, whether or not your conviction is based on sound logic and facts. And who is better to verify it than such people? The second reason is that the opinions of such people are usually respected by others. This will accelerate the rate at which others will be attracted to see the tapes. To accelerate it even further, start with experienced, skeptical "opinion leaders" from different disciplines. This is especially important if a much higher management level is to be persuaded. Most top managers do listen when the same message arrives from different directions, especially from departments
that usually do not agree on anything (let alone an improvement project).

Now that we have covered the basics I think that we are ready to deal with concerns I‘ve read (sometimes between the lines) in your e-mails.

Reaching the top.

It is obvious that we are dealing here with changing not just tactics (as was the case of The Goal) but also strategy. That means that such an effort has to be lead by at least the top management of a business unit.

A business unit is defined as a in which none of the relevant functions reports to another section of the organization. For example: for a business unit of a for-profit organization the relevant functions are: operations, finance, product engineering, distribution, marketing and sales. *

[*FOOTNOTE If one of these functions simply does not exist it is still a business unit (for example: the company does not have engineering since it produces mature products or it does not have distribution since its lead time is shorter than the tolerance time of its clients). It is not a business unit if the missing function does exist in the company but it reports to corporate. The importance of that distinction becomes obvious when, for example, a change in the design of the product will be needed. In the first case the business unit is free to contract outside engineers. In the second case it doesn‘t have the required freedom.]

Since many of you are not the presidents of your companies, many of you are concerned with a non-trivial question: How can we reach the top management of the business unit and persuade them to see the GSP tapes?

Well, let‘s list some of the relevant points we have already mentioned:

1. Viewing the entire Goldratt Satellite Program is an effective way to bring experienced people to each agree on the strategy outlined in Session 8. This point was verified by the many people who saw the live broadcast, among them (according to your emails) were many skeptics who were initially dragged into the program by their peers or were sent, kicking and screaming, by their
boss.

2. Our experience that individuals tend to follow a recommendation given by many people whose opinion they respect.

3. Most top managers do listen when the same message arrives from different directions, especially from departments that usually do not agree on anything (let alone an improvement project).

Putting the three points together suggests we have to convince the highest manager we can reach to initiate the forming of an "evaluation team". The charter of the evaluation team is to examine the validity of TOC for the business unit. If what we said so far is correct we should expect that without any manipulation the evaluation team will arrive at the same conclusions that we did. Namely: TOC does look applicable to our organization. It does look as if we should do it now. And the top managers should lead it.

Now, this assumes that the highest manger we can reach is a top manager of the business unit. What should be done if the highest manager we can reach is, let‘s call him Richard, and Richard is not a top manager of the business unit?

That is a problem.

I guess that if we use the same process we can successfully pass the baton to a level that can reach the top. Of course, in this case, the charter of the "evaluation team" will not be as broad as the entire business unit but only a section of it. But the evaluation team, having no less brain and experience than we have, will probably reach the conclusion that the best way is to implement TOC throughout the business unit. And as a first step they will probably suggest that Richard and his peers devote the time to see the GSP tapes.

If some of you are very low in the pyramid and you decide to try, please write to me, in detail, what actually happened. I might be able to guide you to correct some glitches. For the sake of so many frustrated middle level managers we need to have the process of fast bottom-up movement polished. Then testimonials will be available to encourage many more to try.

That brings us to the second most frequently asked question (in your e-mails) coming from companies where top managers viewed the GSP broadcast as a group. And not too surprising the question is: What is the best way for top managers to lead the implementation?

Constructing the implementation plan.

In guiding the implementation, we must have the target in front of our eyes.The target is to put the organization on a real POOGI, on the red curve. The problem is that if the implementation is not planned carefully it can easily slip away from the red curve. I‘ve seen it so many times that maybe one day I‘ll write a book entitled "Fifty ways to leave your red curve." In this article, since it is too long already, I‘ll just list the most common traps.

1. Starting the implementation in one function and than bragging about the results.

That might cause the rest of the organization to regard TOC as applicable to that function alone. If it happens the green curve is guaranteed.

2. The constraint is internal, and we address the current constraint without even asking what will happen once we break it. Until we wake up and look for the next constraint we will already be on the green curve. As long as the bottom line is okay, there is no alarm. We are likely to rest on the green curve for a long time.

To avoid these two common traps, our Future Reality Tree starts with Injection 100; the demand to introduce modifications to its offerings to substantially increase the perception of value for a sizable market. start by striving to achieve a competitive edge in the market. This starting point forces the organization to focus efforts toward breaking the external constraint. It also forces the implementation of TOC in more than one function since rarely a situation exists where implementing a Mafia-Offer does not require it.

And now we are ready to fall into the third trap: 3. Being so happy with the positive bottom line results of succeeding to
implement Injection 100 that the company loses the urgency to continue to Injection 120, where the real profits are waiting.

But the biggest trap of them all: 4. Not using the momentum built by the achievement of the first two injections to build the culture needed for the organization to embark on Injection 140.

To build this culture two things are needed. One is obvious - we need excellent communication between all departments. No more local optima. We have to uproot the cost world language and replace it with the throughput world language. Don‘t fool yourself, it requires at a minimum the education of all management, at all levels, and the education of those opinion leaders who are not managers.

The earlier we start the easier it will be because we then have time to allow volunteers to take the education. The build up of momentum and social pressure almost guarantees that before the organization is ready to embark on Injection 140, the throughput language had already become the only language.

The second thing which is needed to implement Injection 140 is more subtle but not less important. We must build pride across the board. Pride in the organization‘s ability to achieve whatever it sets its mind to achieve. The best way to reach it is to start at the stage where Injection 120 is implemented. What has to be done is to take the mystery out; make sure that as many people as possible will be exposed to the specific Future Reality Trees and PreRequisite Trees the company is busy implementing. Progress
should be constantly marked on those trees and made public to the employees. Then they are able to see, over and over again, how ambitious targets are broken down into logical components and routinely achieved.

Of course to achieve all the above it is essential that the top managers of the business unit will reach a true consensus on implementing this strategy. My impression is that to reach such a consensus will take about five to six days if it is structured well. Each session of the program should be viewed by all top managers together (even if some have already seen it). Open
discussion to relate the generic messages to the business unit‘s reality should be held during each session after the problem is explained, and also after the solution is presented. Management should try to refrain from making any decisions until all tapes have been viewed. When that point is reached, the discussion should revolved around whether or not to adopt the strategy of TOC.

If the decision is positive the last day (or two) should be devoted to a team effort to build the PreRequisite Tree leading to the ambitious first target; Injection 100.

And I‘ll finish with the POOGI forum motto:
Read, think, act, send observations.

Yours,

Eli Goldratt