July
99
To POOGI forum members,
You
probably know that Im retired. Retirement is the period of life
when people are supposed to do the things that they like to do, rather
than devoting significant time to things that they are required to do.
In my case, things that I like to do are not typified by playing golf
or fishing.
Two
years ago, when I retired, I was planning to write a book (or two) a year
and entertain myself by leading one or two interesting projects. That
is also what I actually started doing. Id written "Project
Management the TOC Way," I started to move on the GM book, I took
one project that was aimed toward finding out how to implement critical-chain
in a complex, multi-project environment, and another project aimed at
finding how to increase the chances of success of start-up companies.
But it didnt take long to realize that I cannot find enough satisfaction
in dealing with chupchiks*. So, I started to look into a much bigger issue:
HOW TO ENABLE TOC TO SPREAD MUCH FASTER.
Here
is my analysis, my solution and my plan of action. Please send me your
own observations.
________
* Chupchik is a slang word in Hebrew that describes a situation where
a person is busily working on something which does not count much. Or
more vividly: "Pissing in the wind and feeling very proud about it".
ENABLING TOC TO SPREAD MUCH FASTER
The
problem.
I
think we all share the opinion that TOC - as a body of knowledge - is
unique in its ability to improve organizations. When we compare the need
of organizations to improve to the ability of TOC, it is no wonder that
we expect to see an exponential spread of TOC among companies (not just
awareness, but real implementations). Is it the case? And if not, why?
Why
dont implementations spread from one plant to another, from one
function to another, from one division to another? Why do so many implementations
die? Why do so many new TOC licensees give up after a short while?
We
all know the answer. It is because of the nature of TOC. The things that
give the unique abilities to TOC are exactly the same things that limit
the spread of TOC; making its implementations fragile and also causing
it to be difficult to sell. It is the fact that TOC in general, and each
of its applications in particular, are a "paradigm shift product".
Lets
explain this last concept in more detail. The performances of superior
conventional products are, at best, only a few tenths of a percent better
than those of the competitors. This is not the case for a "Paradigm
shift product" whose performance are an order of magnitude better
than the competitors. The exceptional performance is a result of the fact
that it is not based on perfecting the already established methods. It
is based on a "paradigm shift"; on challenging at least one
of the fundamental assumptions on which all competing products are based.
But
its strength is also its weakness. When we try to convince people to adopt
a conventional product we can safely assume that our audience is already
familiar with the product. Therefore the conversation can start directly
with the offered solution; with the explanation about the superiority
of the specific conventional product. That is not the case when dealing
with a "paradigm shift product". Starting by praising the product
is a proven recipe for failure. Our audience judges what we tell them
according to the established paradigm and therefore our claims raise deep
skepticism or even resistance.
To
convince a company to embark on any TOC application requires that it be
introduced following rigorously the buy-in process (getting first a consensus
on the problem, then on the direction of the solution, etc.). Most people,
including experienced internal advocates of TOC and new licensees, do
not follow the buy-in process. They are captured in the mode of praising
the solution.
Its
no wonder that new TOC licensees find it difficult to get new business.
And after two or three unsuccessful attempts, they give up and revert
back to selling the more traditional methods.
Also,
its no wonder that people who successfully implement TOC in their
section of the company find it almost impossible to convince other sections
to join. And this, as we learned the hard way, will always lead to stagnation
and often even to the destruction of the section which did implement TOC*.
_______
* The undesirable effects that stem from confining the TOC implementation
to one section can be classified into a few depressing categories:
-
The improvements in the section that implements TOC lead to negative impact
on the performance of the company. Examine for example a company where
Production is feeding a large distribution network. If distribution is
not adopting TOC, it is likely that improvement in production lead time
will not be translated into a drastic cut in the desired levels of inventory
in distribution. The increased throughput in production will result in
inflated inventories in distribution - sometimes to the extent that the
company might suffer from cash shortage.
-
The ongoing improvements in the section that implements TOC do not, after
a while, contribute to the bottom line. Simply, after a while, the constraint
of the system is no longer in that section. Then the impact of this sections
superior subordination is wasted since the other section does not know
how to manage the constraint.
-
The most frequent case: The TOC implementation is squashed. This happens
when the head of the section is promoted and a new "cost world"
manager takes over.
-
The most devastating case: The constraint is no longer in the section
that implemented TOC. The section continues to improve. The outcome is
not an increase in throughput, but an increase in excess man-power. Then
corporate decides to trim the excess. People are punished for doing the
right things, and as a result the section folds.
_______
We
all recognized that the problem lies in the difficulty of moving people
through a paradigm shift. It is not easy to cause a section of an organization
to go through the paradigm shift needed to embrace one application, it
is not easy at all. But it is by far easier than causing all the top management
of an organization to go through the mammoth paradigm shift needed to
embrace TOC as the strategy and tactic of the entire organization.*
_______
*There is also a big difference in the required knowledge. We can teach
(quite thoroughly) one application to experienced people within a period
of two to four weeks. But to teach TOC to the level that a person can
safely guide an enterprise-wide implementation takes much longer. I doubt
if, after so many years, there are currently in the world more than 150
people who can safely guide any enterprise wide implementation.
_______
Baring
in mind the difficulty of moving an organization to embrace TOC in full,
what do you think is the common reaction of a TOC expert when he/she is
approached by an organization that wants help in implementing a specific
TOC application? And the application the organization wants is actually
needed? And the people who approach the experts are in charge of just
a section?
Yes,
it is a rhetorical question. Rarely will a TOC expert insist on a full
implementation. Moreover, when an organization is asking for TOC in general,
the common practice of the experts is to do a brief analysis to identify
the current constraint so that they can recommend the specific TOC application
which should be implemented.
Even
though it is the prevailing practice of TOC experts, most feel uneasy
with this approach. Simply because reality has taught us that penetrating
an organization through one application has a long term problem. The problem
is that it increases the chance of locking TOC into one section of the
organization, creating a fragile implementation. Yes, we have many examples
of organizations which started with one application and successfully spread
TOC to all functions until the organization firmly established itself
on the red curve of POOGI. But lets face it, for each such an example
there are at least five where the opposite happened.
Moreover,
the best time to try and sway a company to embrace TOC as the overall
philosophy is at the beginning, before the detailed (narrow) implementation
starts. That is the opportunity to cause top management to do the full
analysis, to agree on the direction of the long-term solution, and to
place the first implementation steps in the proper context. This way,
good results achieved using one application provide a natural step for
expansion, rather than (as happens so often) an impediment. But,
how many of us can pull off such a sale? How many can turn
almost any opening into an excellent opportunity to achieve such a grand
enterprise implementation? Not many. Actually the word "many"
does not fit this context. The answer is: too few.
Now
our conflict is clear - can you picture the cloud? The objective (A) is
to enable TOC to spread much faster. To do it properly, we have to (B)
increase the rate of new implementations and (C) ensure long term successful
implementations. However, in order to (B) increase the rate of new implementations
we should (D) start with the TOC application that is desired and needed
by the organization. But in order to (C) ensure long term successful implementations
we had better (D) not start with the implementation of any specific
applications but rather concentrate first on persuading all top managers
to fully embrace TOC.
Im
interested in learning how many of you experience the above conflict,
so please take the time and answer the following question:
For
POOGIforum Members who are not top managers of a business unit: Do you
feel that approaching top management after you demonstrate results in
your section will significantly improve the chances of persuading the
business unit to embrace TOC? In your situation, what do you think are
the dangers, if any?
For
POOGIforum Members who are top managers of a business unit: Do you feel
that approaching all top managers of your business unit, after emonstrable
results in one section have been achieved, will ease the efforts of persuading
them to devote the time to construct the strategy and tactic for the business
unit in the TOC way? In your situation, what do you think are the dangers,
if any?
Please
elaborate.
Next
week: The direction of the solution. |