Dominoes and Root Causes

Have you ever asked yourself how can it be that the small changes TOC calls for can create such a significant reaction, I think I found the answer.

Now, don't get me wrong, I know those changes are extremely hard, but how can you call a change that costs no money and can be done in less than a week, such as changing priorities on the shop floor, anything but a small change? All the TOC solutions are based on these small changes - hold inventory at a different point in the supply chain, start doing things at a different time, change the way you plan, measure different things. These are not technology based solutions (as in "Buy this technology and all your problems will be solved", which we all know doesn't work out like that, ever) but solutions that sometimes need technological support. So the solution isn't based on investment, although it might sometimes be required. OK, I think you get my drift.

So how do they do it? Well, TOC talk and the TP talk are all about causality and using this causality to find the root cause of things. this means they are full of chains and chain reactions. This always remind me of dominoes and that's what led me to this clip:

At first I did not see any connection between this and the TOC chain reactions but then I realized this holds a very basic truth - it takes very little effort to start the chain reaction going and once started, each step releases all the energy stored in it, amplifying the effect. The amplification can sum up FAST. It also confirms what we all know, intuitively,that it's much harder to fix the big things at the end of the chain and much easier to fix the small things at the beginning, which is why TP has you looking for the root cause - the smallest domino. The only main difference from this dominoes example is that real life seems to recharge on it's own, at least partially. You do not have to pick up each and every domino in order to start a new chain reaction.

Do you think the physical explanation hold true for real life situations? please share your thoughts.

The Theory of Constraints Change Process

Everywhere we go people are talking about the need for a change, be it a small, local change like finally maintaining a healthy weight or having a better environment at the office or a big, global change like reducing poverty or illiteracy. Sometimes this talk translates into action - we go on a diet, the boss sends out an email with a new policy, people take to the streets to demonstrate.... sometimes a revolution erupts. But after the dust settles and as time goes by we repeatedly find out that the "after" picture is just as unappealing as the "before" picture. Efforts have been put forth - blood, sweat, tear, sometimes lives, to generate a totally unsatisfying result. In business speak, we'd call that a negative Return On Investment (ROI). Not exactly investment best practice, even if money did not come into play.

A main reason for these poor results is incomplete planning. We've all heard it - fail to plan and you plan to fail. But how do you plan?  Theory of Constraints calls for a 3 stage planning process:

1. Define what you want to change
2. Define what you want to change to
3. Define how to change

I see way too many change processes, at all levels, where people "put the pedal to the metal" half way through stage 1. So we figured out, sort of, what we dislike in the current situation and off we go to "do something about it". Yes, of course I'm as guilty as hell of this, aren't you? 

It's just like a trip or a hike. Step 1 is our starting point, step 2 is our end point and step 3 is the planned route. Notice this is the logical order - if you do not know where you plan to start and finish you can't decide on the route. Of course, we can always go out and stroll aimlessly, but if the starting point has been defined as unsatisfactory then such a stroll, that could easily lead back to the starting point, is counter productive.

What will happen if we go through the whole process before we begin changing things around? I don't have an answer to that, the process seems logical so I would expect a high return on investment, but I have to try it out myself before I can make any statements. In the book "We All Fall Down" Julie Wright and Russ King clearly show the negative loop this kind of behavior creates.

In the mean time, here is an example. The story line represents the order of execution - 1-3-2. See if you can deduct all the stages from the clip and if you can figure out better (or more efficient) solutions.....

A URO for Job Seekers?

If you find you need help finding a job, then maybe it's time to look at things differently. 

This TED (or TED-like) presentation shows the process one young guy went through. Job hunting as a college graduate looking for some decent employment in the 2008 economy was not easy. Hunting jobs was not easy for anyone at that time. The way he dealt with the situation was innovative and it led him to create, essentially, an URO (UnRefusable Offer) type of offer to present to employers he wanted to work with. Although he probably did not look at the situation through his customers' (the hiring organizations) eyes, he did realize how his offer greatly reduces their risk. Best of all - it worked.

Past thoughts about hiring

Seeing The World Through Another's Eyes

TOC promises a lot of benefits to those who embrace it, be they individuals or organizations. Yet those promises can materialize only if change occurs. And we all know change is hard. We've seen and remember that people don't resist change just because it is change. If the change is right for them they embrace it. Yet, the fact still remains that changing is hard and considering 'no man is an island' (John Donne), this change is most likely going to require the cooperation of others. To get this cooperation 'they' will need to see how this change fits them, and it is 'our' job to show them, as this is 'our' change. Only after we have proven that this change truly fits, will there be a chance of 'them' taking ownership.

In order to get others to buy in to the change, clearly we need to see things from their point of view. We must look at the current reality and the proposed reality through their eyes. Understand what constitutes a valuable pot of gold for them not for me (or us). Understand what are their risks, not ours.  Find their mermaid and crocodile and understand the impact these have on them.  Not an easy thing to do. No sir.

Now, I know it is not easy to see the move to TOC through your team members eyes. These are people you know, people who have many similarities to you, people who communicate with you. So, if that's hard, how hard will it be to see things through your customer(s) eyes? Horrible, isn't it? Horrible, but essential if you want to develop an Un Refuse-able Offer (URO), if you want to create your Decisive Competitive Edge (DCE), even if you just want to improve sales.

Well, I'll admit it is not easy in any way, but I will also remind you that that's what the TP tools are for and that to make it a bit easier you can always start by deliberately analyzing your view point and then, once you've gotten that out of the way, you can concentrate on the more important 'THEM'.

Anyways , a few years ago Best Buy put out a campaign just before Christmas that, for me, epitomizes seeing the world through another's eyes. It seems clear to me that the ad agency behind this campaign truly understood Best Buy's customers and the people they buy gifts for. I hope you find this as inspirational as I do.

What's so bad with a flow line?

I've got some more to write about the time I spent in Kiev, but it is so amazing how much 3.5 days away can disrupt the flow of life - I am still trying to get on top of things. So until I settle down, I took a couple of minutes to dig this advertisement up in YouTube (no link, you's all know where it's at). I like looking over advertisements since you can find great examples for different things and somebody else payed to get them done at high quality...

Here is a lovely ad from Visa, that manages to explain why the flow line can't handle variation. This is why Henry Ford said his famous "They can have a car in any color they want as long as it is a black Ford Model T" (I may have re-phrased the original), this was not a personal idiosyncrasy, but rather a basic fact of life that the factory he had built to be so efficient as to allow a car for every worker was based on a flow line and could not support any variety greater than 1.

BTW, there is another instance of this clip on YouTube claiming it demonstrated TOC manufacturing. Of course it does not, since TOC (as explained by Dr. Goldratt in "Standing on the Shoulders of Giants") will only advocate a flow line where it can fit, and the way the process is set up in the clip, it can't since not all customers can be served without compromising something (the process or customer satisfaction). Now in this artificial example only a very small change is needed to fix the issue. What would you change here?




Edited to add:
I've been going through my old posts and found this one about the train that never stops. Can you see a difference between the two systems?

How We Communicate is Important

When  was in Kiev (yes, I know you know I went to the conference, but I WAS in Kiev when this happened) I kept thinking of you, the readers of my blog and how I will post this and post that. One thing I thought about was this advertisement clip. The post was clear to me, the subject, the connection to Theory of Constraints, everything. But by the time I got around to digging it up I could not remember what got me going in the first place. It still feels right, though.

I find this clip has a very powerful message about communication and conflict situations. I suggest you watch it first with the audio OFF! Now before you run it again with the audio on, let me tell you these two actresses are doing a great job here. Of course there is a catch, but I won't tell you what it is, turn on the sound and hear for yourself.

{BTW, I noticed a lot of readers view this blog through a translating site, so if English is not for your ears, I've added a transcript below for the translating tool, as the text is relevant}

Here's what I see here, when we find ourselves conflicting with others we many times get into a "fight" mode. Think back about arguments and fights you've had over the years. As soon as the disagreement starts we become entrenched in our own corner, defending our needs or wants or point of view with all our might. This is greatly intensified if, coming into the 'discussion', we predict the other side will not react as planned. We are armed and ready and so we are ready to misinterpret any of her reactions as a declaration of war. Now, as soon as we go into "fight" mode we turn off "communication" mode and thus we stop listening to others and start listening only to our inner voice. We hear only those things that can serve as "ammunition" in the next "round". Do you remember this Magritte painting?

Well, can you agree that an argument is not communication, then?

As stated here, the Theory of Constraints requires change and it requires cooperation from others. To get others to cooperate with the change offered communication must be used to get buy in and commitment. You can't argue your way into convincing them that you understand and that you have a valuable offer.

Shop floor insights – goals and incentives

Here is one subject on which I can't really recall much TOC specific wisdom. Dr. Goldratt did concur with the common saying "tell me how you'll measure me and I'll tell you how I'll act". This supports his claim that people are predictable. The other related content is this research summary clip that talks about the limited power of financial incentives. But they were looking at the impact of offering a too high incentive. I've found out how I react to a too low incentive. It killed my drive.

Let me give you the background. While shops may mark up their products 100% or more, most of this mark up is needed to cover fixed costs of operating stores in good locations, holding on to stock and paying for people to sell this stock. Shop operation is quite work intensive and since rent on good locations is high and inventory spending is high (when you buy stock for the entire season ahead of time) and both are relatively inflexible, it seems there is no choice but to limit workforce costs. Hence hourly pay at the shop floor is insultingly low. This is not singular to the chain I worked for, the pay I was given was pretty much the standard pay in this kind of job in Israel.

On top of that, to offer some incentive, you get paid 1% commision on all your sales as well as bonuses if you reach certain sale volumes.  Sounds good, doesn't it? Well, only until you do the math. There was no way the bonus would amount to anything substantial; the shop just did not have that kind of potential. So that went out of the window, at least for me.

The other thing that kept killing my motivation is the habit of the managers to set personal sales goals. It was a bad day, I had a couple of hundred NIS in sales and 2 hours to go when the manager comes in and hands me a piece of paper with my goal for the shift. The goal was 2,000 NIS. There were no customers in sight. Shocked I turned to her and she just said "you'll have to try harder and make it happen". OK, it was not her fault, she was stuck in the same messed up system as we were and she was also misled by her managers to act like that, taught that goals create motivation. Well, I guess my TOC understanding miss-served me there because it was clear to me that people buy what they want. Sales clerks have an impact, sure, but it is limited. I also thought no effort in the world can create a sale when there are no customers in the shop. I found out I was wrong when the manager tried to make me buy something to improve the registry.

Is that really what management wanted?

Great Theory of Constraints resource - YouTube

I'm interrupting my shop floor series to share with you another grate resource - the TOCexpert channel on YouTube.

Hope you enjoy

Overcoming Resistance to Change - Isn't It Obvious?

A lovely video by Goldratt's people. I truely found this to be an eye opener.

When you need to conduct a change - first analyse it from your point of view in all 4 quadrants, then try to understand the other party's point of view and figure out, in advance, how to minimize the risks and loses. While Dr. Goldratt has a book by the same name, the topic of this video is hardly covered in it.