Theory of Constraints Handbook - James Cox Iii [316]
The “4 × 4”—First Attempt at a Process to Launch a Holistic TOC Implementation
To implement TOC holistically throughout an organization requires two important paradigm shifts. The first relates to the inherent potential that can be unlocked in most organizations and within each function of the organization simply by changing the rules from the traditional way or Cost World3 to the TOC way or Throughout World.
The second paradigm relates to the importance of people and the fact that it is possible, with the right approach, to turn resistance to change into an active contribution to change, as long as the change makes sense and as long as it is based on a win-win-win solution.
Goldratt recommended that a holistic approach to implementation should start (if possible) with exposing key stakeholders to these two necessary paradigm shifts through understanding the TOC solutions for each link and then guide stakeholders to use the insights gained to devise a winning strategy for their organization, backed up by prudent tactics all laid out in a detailed action plan that must be achieved with the consensus of all stakeholders.
Moving the organization on a holistic approach in this way, Goldratt argued, could potentially break the conflict of where to start, since the first “local project” will simply be the first step to implementing a holistic strategy for the organization.
However, Goldratt warned that to reach “true consensus” it is not enough that each top manager agrees on the outcome, or that each top manager feels that his or her concerns (at least those that are important and urgent) have been adequately addressed. To ensure that the resulting action plan will be aggressively implemented, each top manager should rightfully feel that his or her contribution is vital and that the outcome is his or her baby; that is, all top managers take full ownership and responsibility to make this work.
However, Goldratt warned that a number of obstacles could block such an objective:
The strategic direction concentrates only on one side of the existing conflict (local versus global optima or short- versus long-term).
The strategic direction is nothing but polishing an existing compromise such as focusing on further reducing process cycle times when the major cause of delays is batching of orders.
The suggested tactics are based on prevailing erroneous assumptions such as improving efficiencies is the best way to reduce cost per unit.
To overcome these obstacles and achieve the full objective of developing a holistic strategy for the organization, Goldratt proposed a new process—the 4 × 4.
The first “4” refers to 4 days where management, through the assistance of a TOC-expert facilitator, would gain a deep understanding of all the major cause-and-effect relationships governing the organization. They would be exposed to the prevailing erroneous assumptions within each of the main functions of the organization and become familiar with the common sense solutions (of TOC) stemming from a holistic approach.
Goldratt also warned against obstacles that could derail achievement of the outcomes for the first 4-day session. He cautioned against:
The tendency to jump ahead (working on a solution when there is not yet agreement on the problem).
The dominant person (who makes it difficult for others to contribute).
Lack of discipline in formal logic (accepting any reservation or idea without challenging it).
To overcome these obstacles and to ensure there is a true consensus on the holistic strategy that needs to be implemented, Goldratt proposed the second “4”—4 days invested into doing a full TOC Thinking Processes (TP) analysis on the organization to achieve consensus on What to Change (Day 1), to What to Change (Day 2), and How to Cause the Change (Day 3), with Day 4 as a buffer.
Goldratt proposed the following steps (following