Tag: TOC

Standing on the Shoulder of Giants Looking for Fundamental Principles of Human Effectiveness

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Eli Goldratt proposed a six-step process to stand on the shoulders of giants and make progress:

  1. Identify a “giant”. Intuition will guide you to an important enough subject for you.
  2. Identify the enormity of the area not addressed by the giant. Reality gives the signals that so much more can be done. You are aiming for a broader, not a more confined, area than what was addressed by the giant.
  3. Get on the giant’s shoulders. Gain the historical perspective – understand the giant’s solution better than he did.
  4. Identify the conceptual difference between the reality that was improved so dramatically by the giant and the area untouched.
  5. Identify the wrong assumption.
  6. Conduct the full analysis to determine the core problem, solution, etc.

In looking for fundamental principles of human effectiveness, I identify Dr Stephen R Covey as the giant on whose shoulders I wish to stand and look more broadly at the concept of principles. Step 1 was easy enough.

According to my understanding of Dr Covey’s work on human effectiveness, human effectiveness is based on the concept that principles are in control.

Most readers of his work brush over the concept of principles to get to practices – which, I believe, is not what he intended. Step 3 is nearly impossible – I will fudge it until I make it.

People have bought into the seven habits of highly effective people without necessarily buying into the concept of principles. Mainly because the word principle is used for a host of non-principle matters. Step 4 is the gist of my endeavour.

The assumption that I aim to address is the assumption that people know how to go from principles to their everyday lives. People might be seen as rational beings but are not logical beings. Step 5 is easy enough.

Dr Goldratt and the TOC contributors provided us with logical thinking tools to gain that knowledge. Therefore, I build on the assumption that one can build on fundamental principles towards effectiveness. The development of the logical thinking processes leads me to think that we can make progress in understanding human effectiveness. Some more of Step 5.

[1] Standing on the Shoulders of Giants – Dr. Eliyahu Goldratt (tocico.org)

The Goal – The Beginning of the Theory of Constraints

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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:
 
  1. IDENTIFY the system’s constraint(s).
  2. Decide how to EXPLOIT the system’s constraint(s).
  3. SUBORDINATE everything else to the above decisions.
  4. ELEVATE the system’s constraint(s).
  5. 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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