Eli Letters

Letter to members #5

September 1999

To POOGI forum members,

The solution (continued)

My last e-mail ended with: "But this e-mail is already too long so I will continue next week. In the meantime, I need your observations: …"

As you have, no doubt, noticed it took me six weeks to continue. No, this considerable delay it is not due just to my ingrained laziness (I am the master of procrastination), it is mainly due to your valuable responses. Your feedback has highlighted a slew of important issues and I needed the time to check (and in one case even to reconstruct) practical, yet generic, answers.

1. The first issue concerns cases where most top management of a business unit have seen the satellite program. As I had hoped, there was a consensus that it is the way to go; a satisfactory confirmation. Alas, in too many cases only sporadic initiatives (in my eyes) have been taken. Exchanges of e-mails clarified that the reason was that top management didn‘t know what process can lead them to construct, as a group, the strategy and tactic of their company. Being eager to proceed they launched local initiatives.

2. The second issue was no surprise: How to reach all top management? What was a surprise to me was the extent of middle management‘s disbelief that they can get the attention of top managers, and that even if they can get their time, the disbelief that top management will listen and act. I deduced that I have to construct a more robust solution to this problem.

3. The third issue regards cases where, objectively, it looks hopeless to reach top management. What should be done then? Is no action better than a pocket of improvement? I gave it a lot of thought. I went back and re-examined the cloud and maybe I have an answer. Let me make some checks before opening my mouth.

Since it will take me sometime to be ready with my answer for the second issue, and more time until I‘ll be ready to answer the third issue let me devote this article to issue one.

The challenge is to bring all top management to agree on the strategy and tactic of their organization. No just any strategy but a strategy that will guarantee that the organization rapidly embark on an ambitious and lasting Process Of OnGoing Improvement.

To reach a true consensus my experience is that it is not enough for each top managers to agree with the outcome. It is not even enough that each top manager will feel that hes (his/her) concerns have been adequately addressed. To ensure that the resulting plan of actions will be aggressively implemented each top manger should rightfully feel that hes (his/her) contribution was vital; that the outcome is hes baby.

This is a very ambitious target. Never-the-less, unless the president of the organization is exceptionally charismatic, it is mandatory.

There are many obstacles that stand in the way of achieving our ambitious target. The first group of major obstacles is:

1. Many times the strategic direction, that is contemplated by a top manager, is based on concentrating only on one side of the existing core conflict. Of course, this direction will be opposed by other directors who are concerned more with the other side of the conflict. As long as we don‘t prevent such erroneous directions the chance of reaching a meaningful consensus is negligible.

2. Many times some top managers are so "bitten" that they take the existence of the prevailing conflict as given. Their starting point is that these conflicts are here to stay and therefore the direction of the strategy that they contemplate is along the lines of polishing the existing compromises. Such an attitude blocks the possibility of constructing a valid strategy.

3. To meaningfully contribute to the construction of a good strategy, a person must be familiar with the erroneous prevailing assumptions that are at the base of the false paradigms that currently hamper the performance of most organizations. Without such familiarity it is unrealistic to expect that the direction of the good strategy will naturally immerge from the group.

4. To meaningfully contribute to the supporting tactic a person must have a comprehensive understanding of all the major cause and effect that govern the organization. Without it s/he will be unable to adjust the required tactic that can carry out a strategy which is based on changing some of the fundamental assumptions that guided the organization in the past.

The experience gained in the live broadcast of the satellite program and experiments done since then clearly shows that all the above obstacles are successfully removed by watching the program. Preferably in a group. Preferably with a facilitator.

The video-tapes of the GSP (Goldratt Satellite Program). enable for the first time to embark on our ambitious target without the need for an outstanding knowledgeable and charismatic facilitator. The door is open for organizations to do it on a major scale. This is the base for my proposed process. I call the process the "4x4".

The first "4" stands for the time - four net days - it takes to watch, as a group, all the eight sessions of the GSP (Goldratt Satellite Program). These four days can be done consecutively but my recommendation is to take it slowly; people need time to digest, contemplate and internalize. The best rate is probably one four-hours meeting per week. It is enough time to allow for stopping the video-tape wherever needed to discuss or debate the applicability to the organization and still finish one topic (a session) per meeting.

If (when) at the end of viewing the video tapes there is a consensus that conceptually it is the direction that should adopted, the strategy and its supporting tactic should be built. As your feed showed, for most top managers it is not clear how to do it. A clear indication that there are still many obstacles that have to be overcome.

1. To develop a good strategy and tactic the group must answer in sequence the three fundamental questions: "What to change?" "To what to change?" And
"How to cause the change?". In spite of watching the GSP and agreeing with the necessity to follow that sequence, people are not used to it. Rather they tend to make intuitive jumps that lead to confusion, to the drop of some (many) members from the group effort and to an incomplete plan of action.

2. In most groups there are few people who are dominant. These dominant people usually tend to "take over" when they find themselves in an environment of indecisiveness. As beneficial as this is it does prevent some others from fully contributing sometimes to the extent that they feel that the interested of their areas of responsibility were ignored or even compromised. As a result the implementation in these areas will lag behind or, much worse, pockets of resistance might develop.

3. The answer to the first question "what to change?" is usually provided through building of the cause and effect diagram called the Current-Reality-Tree. The answer to the second question "to what to change?" is usually provided through building of the cause and effect diagram called the Future-Reality-Tree. These methods are not appropriate for a group effort; an effort to build a current or future reality trees usually turn quickly to a finger pointing and power match. Moreover, mastering the skill of building these trees takes a lot of time and determination.

Constructing the strategy and tactic and converting it to an action plan is the purpose of the second 4 days. The process that should be used is designed to smoothly overcome all the above obstacles*. Read it while checking if it does completely overcome the obstacles.

_____________
* Special thanks to the group of TOC experts in AGI South Africa headed by Doug Renecle that contributed a lot to the formation of the 4x4 and has also done a lot of the real-life checking of its validity.

The first step, as we said, is to identify the core problem; to answer "what to change?". And every one should contribute to it. A contribution that, from the point of view of the contributor, is the most important one. To achieve it, we should start building the list of UnDesirable Effects by asking each top manger to contribute the most important UnDesirable Effect that impacts hes area of responsibility.

Under each undesirable a whole "Pandora box" is usually hiding. To expose the full story each manager is asked to detail hes contribution; to turn the "title" into a meaningful half-a-page description. An method it is to try and cover the following aspects:

1. Why is the UnDesirable Effect undesirable or bad?
2. In what way is it undesirable?
3. Why do you put up with the undesirable Effect?
4. What is being jeopardized by the undesirable Effect?
5. Is there a specific action resulting from this undesirable Effect that you find yourself complaining about?
6. Or maybe an action causing the undesirable Effect?
7. Does this UnDesirable Effect ever put you into a conflict? If so, describe the conflict.

Next each top manager is asked to turn hes "story" into a cloud. The cloud can be easily built by answering the following five questions:

D: What action do you find yourself complaining about?

D‘: What is the desired opposite action of D?

B: What need is being satisfied by the action in D, or why do you put up
with D?

C: What need is being satisfied by the action in D‘, or what is jeopardized
by D?

A: What is the objective achieved by having both B and C?

Once everybody has finished, each top manager, in turn, presents hes undesirable effect and hes resulting cloud to the group. God forbid that the story will be read before the cloud is presented - the almost unavoidable result will be the start of fierce finger-pointing. The cloud, as we all know, does not put the blame on anybody, instead it highlights the fact that we are caught between a rock and a hard place. Due to that, experience shows, that the attempts of the group to polish a presented cloud are not rejected but are welcomed by the manager how presented it.

It is gratifying to watch such a process. In all cases that I witnessed the resulting ah-ah‘s pulled the group together.

Now, the individual clouds are used by the entire group for constructing the generic cloud. This is done by listing the D‘s of all the individual clouds and looking for a single statement that describes them all; a statement that each individual D is one of its specific cases. The same process is repeated in order to generate the generic D‘, then A and lastly B and C.

Then all the resulting components are displayed in the cloud form and the group does the needed adjustments so that the result is a legitimate cloud (B and C are necessary conditions for A, D is for B, D‘ is for C and D and D‘ are in direct conflict).

It is actually much easier than it sounds. For an illustration of a generic cloud build from generalizing the components of several specific clouds see the specific and generic clouds used in GSP session 3 on the subject of project management.

The intuition gained by this process is so deep that experiments showed that there is no need to invest the time to explicitly writing the Current-Reality-Tree. Each member of the group does internalize that as long as the generic cloud is not evaporated hes specific undesirable effect, as well as all other undesirable effects appearing on the list, will continue to exist. A true consensus is reached on the core problem.

Reaching this point usually absorbs the better part of the first day. A lot is accomplished so it is better at this stage to close the day.

The morning of the second day is devoted to exposing assumptions on the right-hand side of the generic cloud, and discussing which one can be challenged and in what way. As it turned out the video-tapes gave people a lot of relevant examples of prevailing wrong assumptions, so, in most cases, the group doesn‘t have any problem agreeing on the best way to "evaporate the cloud"; they agree on the direction of the solution. To ease the work on the next step it is imperative to verbalize the assumptions which are challenged and to precisely verbalize the agreed upon injection - the direction of the solution that once implemented will remove the conflict. Surprisingly, verbalizing the assumptions and the direction of the solution takes more time than finding them.

Now, we move from a group effort back to individual assignments. Each top manager returns to hes specific cloud and reexamines it in light of the direction of the solution. Although at first glance it is obvious that somehow the agreed upon direction somehow breaks the specific cloud, exactly how is not clear. The task is to turn the direction of the solution into specific injections which, everyone agrees, will remove the specific conflict.

It is best to illustrate the process on one or two specific clouds by asking the group to do it. That is usually enough for people to develop the skill and the confidence.

Then, each top manager, in turn, presents hes work to the group. In almost every case, the group‘s remarks force the introduction of additional (albeit, less important) injections. There are two advantages to this phenomenon. First, everybody justifiably fills that everybody have contributed -- not just regarding hes own areas of responsibilities but to other functions as well. And it does polish the solution. So much so that experience shows that after the group has finished scrutinizing the work on all clouds there are no meaningful negative branches left. Therefore there is no need to explicitly write the Future-Reality-tree .

Once, the list of all injections have been assembled the group goes over the first page of the generic Future Reality Tree (Page 185 of the viewer notebook). They check that injection 100 has been covered and that the ground has been laid to achieve injections 120 and 140. If not, they need to add more injections. Which ones? Don‘t worry, at that stage it is obvious.

The group now has a real consensus on "to what to change to?" Another satisfying day comes to its end.

The third day starts with the group working to answer the last question" "how to cause the change?" The target is implementing the list of the injections constructed the previous day.

This is straightforward and is done by building a prerequisite tree as described in session 7 (managing people).

It is important is to ensure that each manager contributes. The easiest way is to use the "bridge game method." Going clockwise around the table each manager is allowed to contribute only one obstacle (standing in the way of implementing the list of injections) or to "pass." Passing in one round doesn‘t prevent a person from contributing an obstacle in a later rounds.
The process stops when everyone has passed; nobody can think of any more obstacles preventing implementation of the necessary steps.

The result is a list containing between 30 to 50 obstacles. Then every manager supplies the Intermediate Objective(s) that, if achieve, remove the obstacle(s) s/he had contributed to the list. No debate is allowed when the obstacles are raised but debate is encouraged on the Intermediate Objectives.

Once all obstacles have an agreed upon Intermediate Objective the group sequences them into an IO map. Then responsibilities are assigned (from experience, people are volunteering according to the match between the Intermediate Objective and their area of responsibility) and time estimates are given.

The IO map is converted to a PERT chart with the critical-chain highlighted and appropriate buffers are inserted in the required place (as explained in GSP session 3 - project management). Remember, putting an organization on a Process Of OnGoing Improvement is a project, a major project.

The fourth day is a buffer, and as in any case where a buffer in called for, the time that you desperately need it is when you didn‘t schedule the time for it.

What about an expert consultant to facilitate the process? Well, if you paid close attention to the Q&A section of the GSP you know my opinion. In cases where the know-how is in the public domain (and in this case the required know-how is in this document) a consultant is a luxury. S/he can prevent the group from spending too much time wondering into blind alleys. S/he can confirm what will probably work and what will not etc. But as long as the required know-how is not proprietary a consultant is a luxury and people which insist on luxury, know that they will have to pay for it.

Next article (and this time I‘m not saying next week) will hopefully be on "how to convince top management".

Now what I need from you…

The number of people I call experts in TOC, people who I know will bring to the table plenty of experience of what works and what doesn‘t, is very limited. If there will be a lot of demand I will face another challenge, namely: how to turn an experienced consultant into a TOC expert in a relatively short time.

So, if you hold a management position where you report directly to a manager of a business unit, or if your position is higher, please write to me about the following:

In the case that you succeed to convince all your peers to go on the 4x4, would you ask for an expert TOC consultant to facilitate this effort or would you use an internal resource? I‘m not just looking for a yes or no answer, I‘m also looking for your reasons.

Thanks
Eli