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’s Throughput, Investment, and Operating Expenses), and finally identifying the major UDEs (independent causes that contribute to the gap). In the example that follows, these UDEs reflect the six most common causes of projects being completed late, over-budget, or under scope. Step 2 involves defining the subordination conflict that blocks removal of each of the most significant UDEs (in terms of their contribution to the performance gap). The example shown in Fig. 15-20 shows the subordination conflict related to one of these UDEs. Step 3 and Step 4 involve identifying the erroneous assumptions that cause the conflict and identifying the new assumption and related new rule that will break the conflict. Finally, Step 5 converts these insights into the structure of the S&T with the objective of the conflict (A) being equivalent to the higher-level objective of S&T (e.g., “Meeting all project promises”), the necessary conditions (B&C) being equivalent to the strategy, the assumption that was challenged being equivalent to the parallel assumptions, and the new injection (the new rule) to satisfy B and C equivalent to the tactic. The original UDE (bad multitasking) and its consequences are equivalent to the necessary assumption of that S&T block.

Summary of How to Cause the Change

The implementation of a new TOC-based POOGI can be blocked by a number of implementation obstacles. Significant obstacles that will have to be overcome are the typical resistance to change and lack of actionable information, both of which can be addressed by using TOC’s buy-in process and generic S&Ts (which describe the recommended change in detail). Another significant obstacle is the organization already investing in another CI methodology such as Lean, Six Sigma, or Balanced Scorecard. A number of organizations have already presented how they have integrated TOC as the focusing mechanism into their existing CI methodology. Another implementation obstacle is the fact that most ERP systems do not (yet) support TOC’s BM (TOC experts consider BM a necessary component of all logistics applications), but again, it has been shown that standard ERP systems such as SAP can be modified to provide this functionality. The last implementation obstacle we reviewed is what Goldratt calls “the engines of disharmony.” Goldratt proposed that the new TOC TP, the S&T, is the best way to remove these engines of disharmony and we can also use the S&T as a primary auditing tool.

Summary of Continuous Improvement and Auditing the TOC Way

The efforts to improve organizations continuously have resulted in the fact that change initiatives have become a continuous journey in most organizations today. Over the past 100 years, there have been major advances in the development of the mindsets and methods needed to continuously improve and audit organizational performance. Unfortunately, despite these advances, the majority (60 to 80 percent) of change initiatives still fails to meet their original objective and some even cause decay in performance or failure. This high-failure rate frequently triggers a vicious cycle of higher resistance to change and lower expectations that result in many new initiatives not receiving the required support and resourcing that, in turn, increases the probability of failure, which again will result in higher resistance to change and low expectations. But why do people resist change? There are at least five different reasons, each requiring a different solution to overcoming the resistance to change. We resist change when:

FIGURE 15-20 Proposed process using conflict cloud to creation/validate new S&T entities.

1. The change (required to solve a problem or break the vicious cycle) is counterintuitive.

2. The change has no perceived benefit or the perceived “cost” outweighs the benefit (to us).

3. The change is not detailed sufficiently to provide actionable information.

4. The change has potential negatives to us or other stakeholders.

5. The change has implementation obstacles.

The mistakes made as a result