December 2000

To POOGI forum members,

It‘s about time to address the question that bathers most of us: How to implement a holistic approach from bottom up? How can a relatively low-level manager cause hes (his/her) whole organization to change?

Why is it such an important question? Why is it that advocates of TOC, even if they are relatively low-level managers, are so concerned about transferring their whole organization rather then concentrate their efforts on improving their area of influence? Is it because unless the whole organization adapts TOC, no section of the organization can implement it and realize major benefits?

That is definitely not the case. For example, an organization can implement TOC just in production while all other functions of the same organizations are still deeply immersed in the cost world. TOC can be implemented in just one plant out of many and, as described in The-Goal, have a major impact on the bottom line while all other plants are not even aware of TOC. Moreover, there are many cases where only one department within a plant have implemented DBR and Buffer-Management and drastically improved its performance. As a matter of fact, there are numerous cases where not a whole application but just one concept had been implemented, like cutting the batch sizes or exploiting a bottleneck. The same is true not just for production but for all other TOC applications; even partial implementations bring substantial benefits. So why are we all so concerned about finding an effective way to transfer an organization from bottom up?

I think that it is because, by now, we are all painfully aware of the X-Y syndrome (the X-Y syndrome was described in POOGIforum letter number 8). It is the phenomena where X is improving, and Y is (now) the constraint. X, being on the holistic approach, realizes that further improvement to the company‘s bottom line depends on Y improving its performance. X is pressing on Y to use TOC in order to improve. Y tries to explain that "it won‘t work here, we are different." War starts between X and Y. A war that usually ends with X being defeated and the TOC implementation stagnates or even disappears.

Let‘s investigate the X-Y syndrome in more depth. There are three questions that beg an answer.
1. Why does X go out of hes way to poke Y?
2. Why doesn‘t Y accept X common-sense recommendations and improve?
3. Why does X lose the war?

At the beginning of this year I invested a lot of time communicating with dozens of Xs trying to figure out the answers for the above three questions. Thank you POOGIforum members for your open and candid collaboration.

As for the first question there are three plausible answers:
1. The fear that major improvements in one area will lead to a real damage somewhere else *.
2. The fear that corporate will "trim" the access capacity that have been revealed by the improvements.
3. The frustration that so much more can be gained and just because of "stupid inertia of Y" this real potential is wasted.

*Footnote: There is one single case where it can and does happen. When production feeds distribution. For the full analysis and solution for this case see chapters 16 and 17 of Necessary-but-not-Sufficient.

>From my extensive communication I found that in the vast majority of the cases answer number 3 was the dominant factor.

This fact surprised me. We are told that when there is a threat on security, the desire for security becomes the main motive. What we witness here is that the desire for satisfaction (reason #3) is the overwhelming motive. So either the desire for satisfaction is much stronger then the desire for security or that the Xs do not perceive a real threat on their security.

It might be that both explanations are correct since, in the vast majority of the cases I examined, there was no threat on X. Initially Y (and anybody else in the company) did not put any pressure on X to revert back to tradition. On the contrary, there was a broad recognition of the achievement of X. The situation started to deteriorate as a direct result of X going out of hes way to poke Y to improve and at the same time poke top management to change rooted policies and measurements. Does it mean that partial im plementations of TOC are secured? I don‘t think so since X is typified by a strong motivation to improve, that is what caused hem (him/her) to start the implementation in the first place. This same motivation is the one that makes reason number three so dominant and the clash with Y is almost unavoidable.

Communicating with many Xs helped to gain a deepe insight to the first question. As for gaining answers for the latter two questions I was very disappointed. The answers that I‘ve got from the Xs for the second question (why Y doesn‘t listen) were always in the form of unflattering remarks about Y management. The answers that I‘ve got for the third question (why X loses) were even more bitter opinions about top management.

Since my basic assumption is that people are not bad or dumb I could not accept such answers. I was stuck.

But, as it usually happens, when your mind is concentrating on a problem you become much more attuned to the hints that reality constantly throws your way. Early this year I was invited to be the keynote speaker of a conference organized by "Industry week", a conference that was dedicated to the announcement of the "ten best plants in the US." The groups that led the implementations in each of the ten plants gave the other presentations.

I was asked to give the first presentation, probably to set the theoretical ground. As I frequently do when speaking with people from production, I asked the audience about The-Goal. Overwhelming majority did read it. They love this book. They call it common sense. But when I asked how many actually implemented it, only a handful raised their hands.

When I was sitting there listening to the testimonials of the "10 best plants" it started to down on me that I actually don‘t know why only a small percentage of the readers implement TOC. I realized that all the explanations I raised to this strange phenomenon are false.

You see, the presenters, even though they were aware of The-Goal and agree that it make perfect sense, non had used any of the ideas in their efforts to improve their plants. Rather they were talking about efforts that extend over four to six years and were listing long lists of action items. For example, the first group had presented a list of thirty-two action items. One of the items was "improvement projects". They said that just in 1999 they have completed one thousands seven hundreds and forty two improvement projects. The plan for this year is to exceed two thousand improvement projects.

And the results? I was not overly impressed. Regarding improvements in inventory, lead time and due-date performance they were on the level that I come to expect as standard after six month of TOC implementation. But most have achieved only a modest increase in the plant throughput. And that is after mammoth efforts over many years.

So what is actually happening? Why didn‘t they use the common-sense ideas they read in The-Goal and achieve much more, with a fraction of the time and
efforts? All my usual explanations were clearly false. These people had the authority to implement major changes. They had the time and the badget. They had phenomenal determination. These people were real doers, no doubt about it. The conclusion that I was force to make is that there must be something that I still don‘t know what it is, a force powerful enough to block most people from using the TOC way.

Once we accept that there is some powerful force, whatever it is, that blocks most people from using TOC we shouldn‘t be surprised that Y is usually not listening to X. We also shouldn‘t be surprised that usually top management is not residing with X but with Y. In other words this, still unnamed, force is probably the one blocking the movement from bottom up.

The only thing that, at that stage, I knew about this "mysterious" force is that since the process of moving a company from top down is working extremely well, there must be something in the process of the 4x4 that naturalize this force.

That was not enough of a clue. But these same ten presentations gave me the key. It turns out that these plants are widely used as references by the JIT/TQM/LEAN community. No wonder that delegations from other plants are visiting to find how exactly to improve. All presenters, without any exception, were complaining that their visitors are "looking for a silver bullet". "There is no silver bullet," the presenters passionately stressed. "It is hard work, by everybody in the plant. Hard work for a long, long time".

During the two days conference I heard the phrase ‘There is no silver bullet‘ so many times that at last it penetrated my thick scalp. They all believe that there are no silver bullets, that you can not achieve something meaningful without hard work for a long time.

No wonder that most of us are open to believe that the long way is the only way. That notion, almost a way of life, is what all of us were brought up to accept; by our parents, by our teachers. We have been taught that "a cent plus a cent plus a cent plus... is the way to make a fortune."

We were trained to accept it except when technology is involved. When dealing with technology we are always looking for a breakthrough, for the thing that will double performance without a change in efforts. As a matter of fact, it is not just technology, it is all of hard sciences. I think that one of the first scientists had verbalized it in the most beautiful way: "If I can find a leverage point and a long enough lever I can move the earth."
Arcimedes.

Which one of the two philosophies, "a cent plus a cent" or "a leverage point," is currently dominating the field of management?

There is no doubt that currently the prevailing management philosophies are TQM and JIT or as they are now called LEAN. Unfortunately the way that these management philosophies are (inadvertently?) promoted is by using a powerful collection of excellent techniques to foster the notion of "cent plus cent," of "there is no silver bullets."

That is exactly the opposite of what TOC is standing for. What is TOC if not a collection of silver bullets? Of ways to achieve so much, not by major investments, not by major efforts exerted over a long time, but by stopping to obey some erroneous assumptions.

Let‘s tie it together. What we are facing when considering a reader of The-Goal is a situation were a person reached conclusions after following the logic of the book and judging it according to hes experience and intuition. But these conclusions are contradicting what everybody around is preaching. How many people have the self-confidence to ignore everybody else‘s opinion and stick to their own?

Not many. Few percent at the most.

When Y (or a top manager) is concerned, and Y is not from production, it stands to reason that Y is less impacted by the massage of The-Goal; that Y doesn‘t believe in the existence of silver bullets. No wonder that Y refuses to listen to X. Why are we then so surprised that the X-Y syndrome exists?

When I discussed it with my doughtier (she just finished the Ph.D. in psychology) she referred me to the work of Solomon E Asch. In the fifties Asch conducted a research on the subject of "conformity" - at last I had the name of this "mysterious" force.

Conformity is a major force as can be seen from the paragraph that Asch is using to summarize his work:
"That we have found the tendency to conformity in our society so strong that reasonably intelligent and well-meaning young people are willing to call white black is a matter of concern. It raises questions about our ways of education and about the values that guide our conduct."*

*Footnote
Aronson, E. The social animal, chapter 2. New-York Freeman & Company 1984.
4th edition.
It might be interesting to note that Asch experiments are now used in Psychology also as an example for "unethical" experiments. The ethical code demands that experiments will not cause any harm. Asch‘s experiments didn‘t stand this criterion since they caused harm to some volunteers when they faced the extent to which they yielded to "conformity".

Asch work also contains a ray of hope. He found that if just one of the crowd is holding the opinion that matches the "subject‘s" opinion then the chains of conformity break and in the vast majority of cases the subject decides according to his own conclusion.

Let me now summarize what we concluded so far. Due to the force of "conformity" the process of a person reaching a decision is a two step process. The first one is reaching a conclusion, the second is reaching a decision. What we now know is that, due to conformity, the decision might be the opposite of the conclusion.

>From my experience I‘ve learned that the most effective way to accomplish the first step is rigorous logic, especially if applied in the Socratic way. In this way a person can use his experience and intuition to rapidly reach a valid conclusion. What I also learned is the extent to which references are ineffective in that stage. Presenting references as a mean to persuade a person to reach a conclusion usually lead to the opposite, to the reaction of "we are different, it won‘t work here."

But, what I now come to understand is that references are a powerful tool in the decision process. Not in the first step, but in the second. References are vital in influencing most people to convert their individual conclusion into a decision, especially when confronting a wide spread opposite opinion.

With all that in mind, how can we devise an effective bottom up method?

Allow me to hold back my tendency to show off, to give my version of the answer, and rather ask for your suggestions. To enable me to process your input please try to write your answer according to the following points (unless you feel restraint by them. In that case write your answer in whatever sequence you feel comfortable):

1. Is it advisable to start by turning your area of influence into an X?

2. If so, how would you go about initiating a local implementation?

3. How would you (if at all) approach Y?

4. How would you (if at all) approach the rest of the organization?

5. How would you (if at all) approach higher management?

Waiting anxiously to your response,

Eli