Theory of Constraints Handbook - James Cox Iii [382]
Copyright © 2010 by H. William Dettmer.
The underlying relationship is not between strategy and a particular type of organization; it’s between strategy and systems. Understanding the distinction frees the imagination from artificially imposed constraints on how, and for whom, strategy might be constructively employed.
The System Concept
It is difficult for many people to think conceptually in terms of systems. It’s easier for them to pigeonhole systems as “organizations,” either formal or informal. Yet, as Table 19-1 shows, the system concept goes well beyond organizations.
In its simplest incarnation, a system is made up of inputs, a process of some kind, outputs, and the environment in which these components exist (see Fig. 19-1).
Any system interacts with other similar (or dissimilar) systems that coexist in the same environment, and with elements of the external environment itself. Some of these other systems might include suppliers, customers, regulatory bodies, special interest groups, competitors, societal groups, educational institutions, etc. The interactions among systems—or lack thereof—are related to the nature of the system’s chosen functions and activities.
In view of the far-reaching nature of systems and their interactions with other systems and the environment, it would be myopic to consider the concept of strategy exclusively in terms of narrowly defined organizations or departments such as Marketing/Sales or military operations. Moreover, while strategy can certainly be developed and deployed without any prior knowledge of the Theory of Constraints (TOC), a thorough familiarity with TOC concepts and principles, in addition to systems thinking, enhances the quality of any strategy subsequently developed. More needs and opportunities are likely to become visible.
A Vertical Hierarchy
Besides the “horizontal” conception of strategy across different types of organizations—commercial, not-for-profit, government agency—there’s a vertical perspective as well. This vertical aspect is related to system levels.
TABLE 19-1 Types of Self-Aware Systems
FIGURE 19-1 Basic system.
Systems are hierarchical. What usually occupies our attention is no more than one level of a larger system composed of multiple levels. An old rhyme characterizes the vertical relationship:
Big fleas have little fleas
Upon their backs to bite ‘em.
Little fleas have lesser fleas,
And so on, ad infinitum. (Ramel)
Military organizations differentiate among vertical system levels by using different terms, depending on the level under scrutiny. From highest to lowest to highest, this taxonomy is as shown in Table 19-2.
The content of each of these terms decreases in “granularity” as one moves upward in the hierarchy. In other words, tactics are much more detailed, discrete, and narrowly focused than operations. Strategies are much more general and broad than operations, which themselves are more general than tactics.1
TABLE 19-2 System Levels
Non-military organizations don’t normally make these distinctions, although they could—and perhaps should. Complex systems or organizations experience significant interdependencies among their internal components, the external environment, and other systems.
A Common Denominator
If one accepts that the concept of strategy embodies both vertical and horizontal dimensions, a real need for a common definition of the term emerges. Whether one calls it strategy, operations, or tactics, it answers the same underlying question: How do we get from where we are to where we want to be? Or, expressed another way, how do we achieve what we’ve set out to do?
Turning this question into a useful definition that suits both the variety of organizational types and the multiplicity of system levels, a “common denominator” definition of strategy might be:
How systems or individuals go about closing the gap between a current condition or position and a desired future state.
This definition is sufficiently