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 . . .
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.
In 2009 Dr Eliyahu Goldratt did a cause and effect analysis of the 2008 economic crisis. He concluded that our reactions transformed a financial crisis into an economic crisis.
In 2020, we face another economic crisis, initiated by our reaction to a health crisis. We do not learn from the past.
Please, let us not change a health crisis (as bad as it is) into an economic crisis. We must think before we do.
We must think of retaining customers without delivering physical products. We must focus on the service offerings to wow the customers and maintain the relationship. The demand will still be there when the supply chain is restored.
We must plan to use the extra capacity in transport to ensure that we transport products as they become available – even in “uneconomical ways”.
Eli Goldratt repeatedly said, and also put in print:
As a matter of fact I had to give up on the greatest pleasure of human beings, on the pleasure gained from bitching and moaning.”
Mistakes happen. You can bitch and moan, or learn from the experience. Mistakes cause problems if you are unlucky. My view, as a manager, is that I can tolerate a mistake the first time it happens, but not the second time.
We must take the time and learn from the mistake, no matter who might be responsible. The main aim of looking at the mistake is to prevent the mistake from happening again. I propose a method that helps you understand the mistakes.
Every action can be placed into one and only one of the following four categories (extended from a presentation by Dr Eli Goldratt, who focused on when things go Bad!):
Apologies to Shakespeare’s Hamlet
Should Do
Should Not Do
Did
Did what should have been done
GOOD!
Did what should not have been done
Bad!
Did not do
Did not do what should have been done
Bad!
Did not do what should not have been done
GOOD!
My suggestion to you is to analyse the mistake based on the two axes:
“What should have been done”, or “What should not have been done”, and
“What was done” and “What was not done”.
These four elements will distil the mistake into its components and will allow you to take action. If you take the right action, the mistake will not happen again. Happy days.
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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