Theory of Constraints Handbook - James Cox Iii [391]
FIGURE 19-10 The logical thinking process and the constraint management model.
Once the strategy is developed in Step 4 as the second part of the decide stage in the OODA loop, the action stage naturally follows. Step 5 is the detailed execution planning. Each of the injections, or initiatives, defined and verified in the FRT (Step 5) is “fleshed out” in a Prerequisite Tree (PRT). Obstacles are overcome and important milestones and sequential/parallel tasks are identified. The resulting PRT forms the basis of a project plan—a project activity network—that can be managed using Critical Chain Project Management (CCPM). The consolidation of all PRTs into multi-project CCPM becomes the organization executive’s tool for managing the overall long-term deployment of the strategy.
What about Steps 6 and 7?
The natural question at this point is, “But what about Steps 6 and 7 of the CMM?” The answer is that at the conclusion of Step 5, the role of the LTP ends. Strategy deployment (Step 6) is an ongoing leadership responsibility. Effective executives use a variety of tools and techniques to shepherd a deployment along. If the execution planning in Step 5 included conversion of PRTs to a CCPM schedule, then one of the obvious TOC-related tools a leader might use at this point is Buffer Management (BM).
Step 7 is an executive function, too. It requires a conscious, deliberate effort to repeat the observe step of the OODA loop again with the objective of identifying failure of the strategy to deliver the intended results and the reason for that failure. In many, perhaps most, cases such failure has less to do with the inadequacy of the strategy than it does a rapid, possibly catastrophic shift in the environment. How many perfectly good strategies do you think might have been rendered ineffective by the 9-11 terrorist attacks in 2001, or the collapse of the U.S. economy in 2008? Even if the triggers are not quite so dramatic, such environmental changes can prompt a need to reevaluate and adjust strategies—or even replace them altogether. And so begins the second iteration of the OODA loop with a return to the IO Map and CRT.
Summary and Conclusion
Formal strategic planning in business dates back only to about 1965, although the development and employment of strategy have been practiced since the days of Sun Tzu some 2500 years ago. In contemplating strategy, there are some worthwhile points to keep in mind.
Distinguish between the development of strategy and a strategic plan. The latter is no more than the capture in some written form of the former. Strategy development, not the written plan, should be the primary focus.
For businesses, strategy is about far more than just marketing and sales. It’s concerned with the long-term attainment of the organization’s goal. If that organization is a commercial company, Marketing and Sales will be but one part of that effort.
Organizations live or die as complete integrated systems, existing in an external environment that imposes conditions, including competition, on the activities of the system. Effective strategy must consider both the internal activities and the external environmental factors.
FIGURE 19-11 AllForm Welding Company strategic intermediate objectives map.
The OODA loop developed by Boyd provides an excellent foundation for managing the development and evolution of strategy over the foreseeable time horizon of an organization. (It should be emphasized, however, that the OODA loop is only one small but important part of Boyd’s contributions to systemic thinking. The sources on Boyd listed in the references are all highly recommended reading.)