So you read THE GOAL and thought it was mind blowing. What next?
Theory of Constraints (TOC) was first introduced by Dr. Eli Goldratt in his best-seller The Goal. Millions of people around the world could relate to the journey of Alex Rogo, the protagonist, and his tale of turnaround at UniCo. In an interview to CNBC, Jeff Bezos shared that The Goal is one of the top three books that he recommends to his top team. The book has featured on Time magazine’s list of top twenty-five business books of all time, and is a recommended read at business schools.
TOC is first and foremost, a systems philosophy that helps organizations focus improvements efforts on areas where it will have maximum impact on the system goal.
Due to the overwhelming popularity of The Goal, most people assume that TOC is applicable to manufacturing only. Companies that have implemented TOC understand that it is a holistic philosophy, with as much application to strategy and marketing, as it does to production and operations.
The real strength of TOC lies in TOC Thinking Processes, that were first introduced in Dr. Goldratt’s book Its Not Luck (also known as Goal II). In this book, Alex Rogo is now Executive Vice President at UniCo, and responsible for managing three struggling companies in diverse areas – printing press, cosmetics and steam pressure. These companies were acquired by UniCo a few years ago. Recent developments have led to a change in group strategy, and it has been decided to put up these companies for sale. Alex must find a way to stop their sale or make them profitable in order to fetch a good price.
In the process of making these companies profitable and more valuable, Alex discovers the TOC thinking processes as problem-solving tools. TOC Thinking Processes provide a step-by-step methodology to surface the limiting assumptions. Once these deep-rooted assumptions are surfaced and invalidated, it enables unlocking of huge hidden potential.
Evaporating Cloud (Cloud) or Conflict Diagram, first introduced in Its Not Luck is the most commonly used TOC Thinking Processes tool. It is used to articulate any problem as a conflict, and find the erroneous underlying assumptions.
With the true mindset of a scientist, Dr. Goldratt believed that nature is inherently simple and harmonious. In reality, there are no contradictions. If you do come across a conflict, do not look for a compromise. Examine the assumptions under the arrows to break the conflict.
In this book, he explains how intuition is the necessary condition for finding a solution, but, it is usually not sufficient. It is not so easy to convert intuition into precise verbalization. Thinking Processes provide a methodology to verbalize your gut feel, as well as a method to focus and critique your idea and then arrive at a practical solution. This is demonstrated quite effectively in several places in the book, with examples from both personal and professional fronts.
Have you read Its Not Luck? What are your learnings and favourite quotes from the book?
Authored by – Ira Gilani, Director, Goldratt India
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