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as the impact of the marketplace and environment, cause-and-effect relationships are multitudinous and complex. Often, decisions made in one part of the organization have serious impact on what happens in other parts of the organization and, eventually, on its customers. When localized objectives, power structures, and policies are pitted against one another as each tries to satisfy its responsibilities in strategy implementation, conflict, chaos, and complications result. To develop and implement a strategy that takes these interlocking relationships into account and intentionally limits the conflicts, one must have a method for analyzing the “what if’s” and understanding the inevitable results of various decisions and moves.

Hamel put his finger on a serious problem with the following: “The dirty little secret of the strategy industry is that it doesn’t have any theory of strategy creation” (quoted in Mintzberg et al., 2005, 5). Standard strategy textbooks are largely composed of long lists of things strategists must take into account (e.g., Barney, 2007; Hill and Jones, 2007), but offer virtually no mechanism for conducting a useful analysis or—as Hamel implies—a mechanism for using the analysis to arrive at a plan. Perhaps this is one reason that well-intentioned but highly analytic approaches have not heretofore met with much success. A detailed method to help identify potential setbacks as well as the root causes for some knotty problems have been lacking. For example, SWOT (strengths, weaknesses, opportunities, and threats) analysis, widely used and taught in business schools, has almost no analytical value.

The TOC TP, as explained by Scheinkopf (1999), provides a methodical tool for conducting a thorough analysis of a company’s situation to define the root causes of its problems, verify that the hypothesized root causes are, in fact, the true causes, and complete a plan for changing the direction of the company. Included in these tools are methods to identify new marketing opportunities and to apply rigorous analysis to the proposed solution. Methods to promote problem solving and better communication are also included, although it must be admitted that the administrator’s skill in using these tools is a critical factor in their success.

No Theory of Implementation

One of the most ignored yet crucial aspects of strategy is the implementation process. In fact, “Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success and the cause of most of the disappointments that are mistakenly attributed to other causes” (Bossidy and Charan, 2002, 5). Put simply, the management discipline has no robust theory of implementation.

A theory of implementation would necessarily require (1) policy and procedure alignments that encourage each subunit to act in ways that support the overall business strategy; (2) performance assessments and reward systems that, likewise, encourage behaviors that are consistent with the overall business strategy; (3) methods of communication that promote cross-functional coordination of work toward a common objective; (4) real-time, reliable mechanisms to order the tasks and priorities of each individual, each subunit, and each functional area in accordance with the overall objectives of the company’s strategy; and (5) ongoing marketplace research, feedback, and communication loops that provide guidance and course correction for strategic initiatives.

TOC shows more progress in meeting these criteria than any other theory of business strategy currently being advocated and taught. First, TOC formally recognizes the need for these criteria. Second, the TOC applications and tools are designed explicitly to address these issues. For example, the TP (see Chapters 24 through 26, this volume) identify the sources of undesirable effects in the system and uncover ways to resolve these problems, which often occur cross-functionally. The TP also suggests methods of communication to facilitate better managerial control of implementations.