Theory of Constraints Handbook - James Cox Iii [676]
Guiding Strategies
If this dilemma is the starting point, then we have two broad guiding strategies available:
1. The first approach is focusing on improving the individual parts of the organization within our span of control as “fires” crop up. This approach has been the predominant approach and continues to remain popular among many process improvement practitioners and managers. It is based on inductive reasoning and the belief that improving individual parts of the organization will result in improving the performance of the organization. Starting with the early pioneering efforts (see for example, Alford, 1934, sect. 4), most of the literature and developments on organizational improvement (Churchman, 1968) have focused on this piecemeal or fragmented approach. Indeed, the majority of the widely used tools and methodologies (see, for example, Zandin and Maynard, 2001; Barnes, 1980) can trace their origins to these scientific management tenets (Taylor, 1911).
2. The second approach views the organization in its totality, focusing on a systems approach (Churchman, 1968) for improvement. It is based on deductive reasoning, long a cornerstone for breakthrough advances in the sciences and starting to show considerable promise in some of the more advanced evolving business methodologies (Rummler and Brache, 1995).
Today there are many powerful tools and methodologies available such as TOC, Lean, Six Sigma, Business Process Reengineering, etc. to help implement these improvement strategies. Still, the results have been mixed. In some cases, improvements have been documented; in other cases, the organizations showed little improvement or even none at all. Even when initial improvements were achieved, the sad reality was many of those were not sustainable. Almost invariably, the improvements took longer and were more difficult than expected.
So, where does that leave us? Rather than attempting enhancement or improving existing tools and methodologies, we can focus instead on how to holistically develop and employ a significantly more effective solution set. This focus will require building on and leveraging the current available body of knowledge. Perhaps it would be helpful if we first gained clarity and understood why many improvements fail to meet managers’ expectations.
The limitations of following the strategy of improving the individual parts of the organization lead to managing the individual parts in isolation. If everyone is managing their areas of responsibility this way, then all of the fine tools and methodologies are focusing on improving the individual parts separately. Local effects reflect the impact of problems that exist within the system of operation. Measurement of these effects on isolated “local activity performance” does not necessarily lead us to understanding the systemic problems that may be leading to negative performance. We can all agree, then, that the improvements can be summarized as follows:
where I is the sum of the individual improvements i from 1 to n improvements.
Now, it is important to accept the painful reality that the sum of the individual improvements has very little to do with improving the performance of the organization (Goldratt and Cox, 1984 Chapter 4; Johnson and Kaplan, 1987; Goldratt, 1988) and will be a pure random event if it leads to any improvement of the organization. The sum of individual improvements is simply the summation of disconnected events. This can also be described as sub-optimization. It appears that this erroneous assumption—action taken locally will necessarily result in improving the performance of the organization—is one of the main contributing causes for failure to achieve real and sustainable enterprise improvements. Therefore, it must follow that this erroneous assumption must be challenged and de facto abandoned, replaced by an approach focusing instead on improving the performance of the enterprise.
In order to develop an alternative approach, we must focus on improving the performance of the