The fundamental principle that everything can improve might sound like wishful thinking, but without it being a valid principle, very little in human endeavour is of use.
Every situation can be substantially improved
Eliyahu M Goldratt and Efrat Goldratt-Ashlag
The principle leads to the conclusion that people are not fixed and can expand –the growth mindset. Remember the growth is possible because the outside was allowed to influence the inside. The person or system that grew is no longer the old system, it is an improved system with new potentials for growth, and so forth . . .
The fundamental principle that everything costs resources immediately leads to the fact that consequences are always present.
One cannot pick up one end of the stick without picking up the other end of the stick.
Dr SR Covey
Consequently, everything requires a proportional response. Why you ask? Maybe I can prevent you from asking why by saying that a proportional response includes thinking about responding and then deciding against outwardly doing something – which more often than not, takes a lot of resources.
Dr Frankl’s assertion that between stimulus and response, man has the freedom to choose follows from the fundamental principle.
Another truism flowing from this fundamental principle is that everything carries inherent risk and reward. The choice people make is which of the two (risk or reward) to heed more when making their decision.
The fact that no one is entitled to anything might sound negative but fits wholeheartedly into my view of life. This belief is deduced from the fundamental principle that everything costs resources AND does not preclude the intervention of a benefactor. When a benefactor plays a role in your life, you benefit because of their decision or resources, not because of some fundamental right you may feel to having that benefit. Now the cost is born by the benefactor, not you – but a cost is paid nonetheless.
Whether you act or not, you act. You might have been paralysed by the lack of data but the decision was always going to be made one way or another.
The consequences or resources consumed are not always predictable, what is predictable is that some form of payment is due. There are first order, second order and third order consequences. Likewise, there are intended and unintended consequences.
Today, I take a break from describing a specific fundamental principle of human effectiveness. I will take a step back and explain how I landed on some of the fundamental principles.
Like Altschuler I would like to start in the physical sciences with liquid contained in a bottle.
The liquid is in the bottle.
If the liquid is outside of the bottle, the liquid is not inside the bottle.
If the bottle contains soapy water, you cannot draw orange juice from the bottle.
If the bottle is not made to hold, say strong chemicals the bottle will deteriorate and might burst completely.
Once the liquid is outside of the bottle the liquid cannot be put back precisely as it was, the liquid, now exposed to the outside of the bottle, has picked up some contaminants.
The all-time favourite is that the liquid can only come out of the bottle if something else is let into the bottle. If the liquid is let out, without allowing air in, a vacuum is formed which will either stop the liquid from flowing out or will make the bottle collapse onto itself.
When the bottle is empty, it is empty. There is a finite amount of liquid in the bottle.
If you have water in the bottle and wish to make juice from a concentrated solution of the juice, the water will only become diluted juice if the concentrated juice is allowed into the bottle.
The above thinking gets me to the following fundamental principles of human effectiveness:
The inside cannot affect the outside unless the inside is let out.
The outside cannot affect the inside unless the outside is let in.
Once something is let out, it cannot be put back in.
I said I don’t classify all statements labelled as principles as principles – to not offend, I use the term Fundamental Principles.
I defined Goldratt’s method of standing on the shoulder of giants.
I chose Dr Covey’s work on principles as the true controlling aspects of human effectiveness as a study for standing on the shoulder of giants.
I showed that I looked in depth at Dr Covey’s work – and others.
Now, I need to explain the missing piece before I share my list of fundamental principles.
The definition of principle I use is:
Fundamental principles express what people are or have and serve as the foundation for a chain of reasoning to support human effectiveness.
Andreas A Landman
The missing piece, is the “chain of reasoning”.
Dr Eli Goldratt, Dr Lisa Scheinkopf, and Jelena Fedurko Cohen espoused the foundation of the chain of reasoning through the thinking processes. Entities are related to each other by sufficiency or necessity logic.
In building the chain of reasoning to support human effectiveness, I rely on sufficiency logic. Sufficiency logic is expressed by If A and B then C type sentences.
I will not go into how to use the sufficiency logic. Rest assured I poured over the list of principles and looked for the links and found many links. All in the hope of finding the bottom principles – the fundamental principles.
In the process of building the chain of reasoning, I weeded out many so-called principles and false connections, or connections that need a longer explanation. The way of doing that is called applying the categories of legitimate reservation.
The categories of legitimate reservation strengthen the logic by giving it a process.
Does the cause or effect really exist?
Does the cause really result in the effect?
Are the cause and result different, or the same but with different words?
Does the cause exist? This can be proven by showing that another effect does exist as well.
Is the cause sufficient to result in the effect on its own?
Is there another cause that will also result in the effect?
Is the cause, effect or connection clearly expressed?
So, there you have it. Standing on the shoulder of giants with new methods allows me to make bold statements . . .
The following is a list of principles mentioned in the referenced books. The list is crude because it conveys the list with minimal filtering and thought:
Renewal is the principle—and the process—that empowers us to move on an upward spiral of growth and change, of continuous improvement
The principle that all things are created twice There’s a mental or first creation, and a physical or second creation, to all things
Private Victory precedes Public Victory Self-mastery and self-discipline are the foundation of good relationships with others
The idea that we are embryonic and can grow and develop and release more and more potential, develop more and more talents
P/PC Balance – The PC principle is to always treat your employees exactly as you want them to treat your best customers
Principle of making what is important to the other person as important to you as the other person is to you
Understand nature’s practical lessons – No pain no gain – Push one’s limits to gain strength
Agree on the desired results, guidelines, resources, accountability and consequences
Frankel – Proactivity: Between stimulus and response, man has the freedom to choose
Pareto Principle—80 percent of the results flow out of 20 percent of the activities
The dominant, central theme of their activities, the underlying principle, is love
When the priorities receive the first energy, there is energy to do the priorities
Synergy – the principle of the whole being greater than the sum of its parts
Evolving is life’s greatest accomplishment and its greatest reward
You can’t talk yourself out if a problem you behave yourself into
Delegation – Hold people accountable for results not methods
Cooperation and long-term personal and interpersonal growth
The process of releasing potential and developing talents
You always reap what you sow – see the law of the harvest
An agreement must be win-win or it will end up lose-lose
One cannot wholly focus on more than one thing at a time
The principle that people are more important than things
Look to nature to learn how reality works – Grow or die
Vision tells you what is important – where to focus
You are accountable for the results of your actions
Radically open-minded and radically transparent
Seek first to understand, then to be understood
You can’t have trust without being trustworthy
Temperance – moderation and self-restraint
Look at the machine from the higher level
Weigh second and third order consequences
A Rock-Solid Interpersonal Relationship
It takes discipline to act consistently
You are responsible for you own actions
Actions are more important than words
Separate the people from the problem
Insist on using objective criteria
Focus on interests, not positions
Commitment is required to finish
Invent options for mutual gain
The Principle of Contribution
Agreement on Success Factors
Pain + reflection = Progress
The Principle of Reputation
You can take the initiative
You must use your resources
The Principle of Alignment
It takes energy to focus
Principle of the harvest
Clarity of Expectations
You choose your actions
Continuous improvement
Integrity – self-unity
A Culture of Feedback
A Foundation of Trust
Extending Smart Trust
Making a contribution
Proportional response
Quality or excellence
Mutual understanding
Principle of process
Purpose gives energy
You are accountable
Be a hyperrealist
Live and let live
Own your outcomes
Win-Win principle
Resourcefulness
Self-discipline
Accountability
Mutual benefit
Prioritization
Responsibility
Encouragement
Human dignity
Consistency
Flexibility
Commitment
Creativity
Discipline
Engagement
Generosity
Initiative
Nurturance
Abundance
Diversity
Integrity
Potential
Fairness
Humility
Kindness
Leverage
Patience
Balance
Charity
Courage
Dignity
Empathy
Honesty
Justice
Purpose
Quality
Respect
Service
Choice
Equity
Growth
Vision
Focus
Trust
Truth
Congratulations! You scrolled all the way down here.
Again – the list of principles above is true and good. I maintain that it is useful to look for fundamental principles:
Fundamental principles express what people are or have and serve as the foundation for a chain of reasoning to support human effectiveness.
I have been thinking about the work environment with my mentor, Philip Viljoen. In this article, I show how the principles contained in the following books combine to form a winning culture:
Let’s start with some naming conventions. When our titles change, there are also significant changes in the way we think – we experience a paradigm shift. Do not believe me? See what happens when you use the wrong designation against someone’s name. Instead of employee and employer, I refer to Company People. Instead of “manager/employer” and “worker/employee/operator” we should refer to coaches and players. The assumption, of course, is that I am referring to good coaches and good players. Would a company not want good coaches and good players as company people?
The trust relationship between the company players and coaches must be in place before any meaningful engagement. For company people to have trust, they must work on their character and their competence. Character is built by transparency, respect, straight talk, righting wrongs, loyalty, extended trust and seeking first to understand then to be understood. When people think win-win, they can be both considerate and courageous. People who are both considerate and courageous can talk straight. Courageous people can right wrongs. Whereas, when people are considerate and feel appreciated, they feel respected. To make people feel appreciated company people must use the appropriate language of appreciation because some people feel appreciated when they receive words of affirmation, spend quality time with someone, benefit from acts of service, receive tangible gifts or when they are physically touched appropriately.
One way of extending trust is to form a stewardship agreement between the players and coaches. A stewardship agreement consists of clear expectations (born out of beginning with the end in mind and putting first things first), clear consequences, accountability, resource availability and guidelines on what is allowed and what is not allowed. The essence is that the player is held responsible for the results without being prescriptive on how the results are obtained unless specific methods are out of bounds. When the consequences are clear, the company people are self-disciplined. Keeping commitments also allows coaches to extend trust. Keeping commitments is the result of company people putting first things first and being proactive.
When company people get better at what they do and fulfil their stewardship agreements, they deliver meaningful results. Company people grow competence when seeking first to understand then to be understood, extending trust, delivering meaningful results and confronting reality.
Company players and coaches work in harmony when they improve their competence, work synergistically, and focus on global improvement. The harmonious relationship between players and coaches is also the result of company people understanding the rationale behind different decisions, having a high level of trust between coaches and players, and when company people have found their voice and inspire others to find theirs. In short, company people have public victories, meaning they have moved from independence to interdependence. Moving from independence to interdependence is the result of working synergistically. Working synergistically requires people to think win/win, seeking first to understand then to be understood and having private victories – moving from dependence to independence. The private victory is the result of people being proactive, putting first things first and beginning with the end in mind. All this only fed by sharpening the saw.
A clear common vision statement aligns the company people. A vision statement consists of a meaningful purpose, a picture of the future, a common understanding of the company’s ranked order values, and acknowledgement that principles govern. The description of the future incorporates the needs of the main stakeholders (owners, company people, customers, and suppliers) and the four human endowments (spiritual, mental, social/emotional, and economical). Goal alignment, role alignment and a shared understanding of company values lead to sensible procedures. Sensible company procedures, a focus on teaching and training and upgrading of knowledge, skills, processes, and infrastructure lead to the company building capacity.
While we are considering the winning company culture, we can also consider the fact that people want to live a full life. The PERMA model helps understand what gives people a full life. When company people make deposits in each other’s emotional bank account and have a meaningful purpose, the company people experience positive emotions. Having a meaningful purpose also cause the company people to be engaged and work synergistically. The result is that the company people deliver meaningful results, which cause them to experience well-being and happiness and thus live a full life. Living a full life, together with experiencing well-being and happiness, leads to the company people being motivated.
The TOC way of achieving meaningful results follows a different route. This route starts with the company people applying TOC thinking. Some of the basic tenets of TOC is that every situation is simple, every conflict can be removed, people think win/win, and every situation can be substantially improved. These four tenets cause people to think clearly. Thinking clearly and sharpening the saw give company people the stamina to overcome failures. Thinking clearly also leads to the belief that there are many opportunities to improve throughput and that company people can work synergistically. And these lead to people delivering meaningful results.
Many good initiatives fail in the execution phase – this does not have to be the case. Applying TOC thinking leads to a focus on global improvement, which means the team focuses on wildly important goals (WIG) with global impact. TOC thinking also implies managing according to throughput accounting practices, which takes operating expenses, investment, and throughput into account. Thus, company people use sensible global lead measures. To ensure successful execution, the company people track progress against lead measures on a sensible team scoreboard. Company people review the scoreboard in weekly meetings where the team holds each other accountable and make new commitments. The new commitments add to the company people clarifying expectations. Once the team starts influencing the lead measures, and the lead measures are predictive of meeting the wildly important goal, the company people deliver meaningful results.
For the company people to continue to be motivated, the company must have a sound performance management system. With the shared vision in place, the coaches coach, according to the agreed ranked value system. The shared vision also ensures that the company people use sensible global lead measures. The performance management system consists of performance planning, coaching and review. Performance planning consists of setting up one-minute goals based on the stewardship delegation/agreements. The coaching involves catching the company people doing things right and giving one-minute praising, redirection, or reprimands.
The coaching is also based on matching the coaches’ leadership styles with the development levels of the players. Company players with low competence and high commitment are coached with high direction and low support. Company players with high competence and high commitment are coached with low direction and low support. Company players with low competence and low commitment are coached with high direction and high support. Company players with high competence and variable commitment are coached with high direction and low support. Coaches show directive behaviour when they teach, observe, provide frequent feedback, and make decisions. Company coaches show supportive behaviour by listening, being involved, facilitating, and encouraging.
Thus, we have a motivated team of company people who are not demoralised by a lousy performance management system—yielding a winning Company.
Eli Schragenheim currently writes an informative blog and his latest contribution focuses on an analysis of technology, in this case Blockchain.
Let’s start with Goldratt’s Six Questions on assessing the value of a new technology. This is a great tool for guiding us to raise the right questions and look for possible answers:
What is the power of the new technology?
What current limitation or barrier does the new technology eliminate or vastly reduce?
What are the current usage rules, patterns and behaviors that bypass the limitation?
What rules, patterns and behaviors need to be changed to get the benefits of the new technology?
What is the application of the new technology that will enable the above change without causing resistance?
How to build, capitalize and sustain the business?
Technology can bring benefit if and only if it diminishes a limitation.
From this statement, like Eli Schragenheim in his blog, Dr Goldratt evaluates the technology that is available in nearly all medium and big enterprises: ERP.
I only have exposure to SAP as an ERP, and I am not impressed. Dr Goldratt predicted in his analysis that SAP-Hanna would be needed to clear up all the complexity of maintaining SAP. Since Dr Goldratt’s analysis was not based on any specific ERP system, the conclusions are valid for other system providers as well.
Managers are asked to test and buy new technologies nearly every day. Many of the past purchases caused more harm than good. The six evaluation questions above will enable managers to test the technology and prevent damage from coming to them and their organisation. Please, let us #ThinkaboutTechnology.
The Goal was the beginning for me. The lecturer, at the USB SDP**, read The Goal to the class in two days, and we played the dice game.
Eliyahu M Goldratt and Jeff Cox wrote the original edition of The Goal in 1984. The Goal has sold several million copies in several languages, including Japan. The Goal is available in e-format, audio formats, movie and as “A Business Graphic Novel“.
The Goal lays the foundation for a significant part of the body of knowledge of the Theory of Constraints. The first question we must ask is,
“What is the Goal of the system?”
Once we know what the goal is, we can define a measurement system and embark on a process of ongoing improvement.
The Goal summarises the Process of Ongoing Improvement as:
IDENTIFY the system’s constraint(s).
Decide how to EXPLOIT the system’s constraint(s).
SUBORDINATE everything else to the above decisions.
ELEVATE the system’s constraint(s).
WARNING!!!! If in the previous steps a constraint has been broken go back to step 1, but do not allow INERTIA to cause a system’s constraint.
The Goal also puts a wooden spike through the evil of cost accounting. Johnson and Kaplan declared cost accounting dead in their book Relevance Lost, 1987:
Corporate management accounting systems are inadequate for today’s (Septemeber 1986) environment. In this time of rapid technological change, vigorous global and domestic competition, and enormously expanding information processing capabilities, management accounting systems are not providing useful, timely information for the process control, product costing, and performance evaluation activities of managers.
The Goal also gives the definitions for the Throughput Accounting parameters:
Throughput is the rate at which the system generates money through sales.
Inventory is all the money that the system has invested in purchasing things which it intends to sell.
Operational expense is all the money the system spends in order to turn inventory into throughput.
Throughput Accounting allows managers to make managerial decisions. These decisions yield real system results.
The Goal explains the generic solution for operations. In operations statistical variation and dependent steps exist. We refer to the worst statistical variation “Murphy”. The Drum-Buffer-Rope solution applies to many systems – especially to scouts on a hike.
I have much to learn about the Theory of Constraints and something to teach. I will return to this subject again.
** I want to thank the University of Stellenbosch (USB) and Bridgestone Firestone South Africa for exposing me to the Senior Management Development program and The Goal.
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