The Theory of Constraints (TOC) is a model originally developed by Dr. Eli Goldratt and made famous in one of the most-read manufacturing books, The Goal. Last week I attended a presentation at the Organization Change Alliance by Dr. James Cox, retired professor at University of Georgia Terry School of Business, who has worked directly with Dr. Goldratt and is one of the leading experts on TOC. He brought to light a concept rooted in industrial engineering as an organization change methodology.
The Theory of Constraints says that in a production system, to improve efficiency, find the weakest link – your constraint – and then maximize its performance. Keep that step in the process busy at all times to maximize output for the entire process. Next, modify that step so that it is no longer the constraint. When the next constraint pops up (because there will always be one), then maximize it until you can eliminate it.
The thinking process used to eliminate barriers was presented as a way to implement change. Despite the 2-hour presentation, he was only able to skim the surface.
The TOC thinking process consisted of three major steps:
- What to change
- What to change to
- How to cause the change
What to Change
Dr. Cox defined that a constraint is “anything that blocks or limits one from achieving its goal.” One of the tools used to find what to change is the “Evaporating Cloud.” He showed us the following diagram:
The purpose of the Evaporating Cloud is to identify a conflict, or barrier, to reaching the objective. The “needs” are both required to satisfy the objective, but the “wants” cannot coexist. Take this example of a barrier to patient care in a hospital emergency room:
To maximize patient care in a hospital emergency room, patients must not wait long to see the doctor, and once they see the doctor, patients need focused care – however long it takes. These two “needs” are satisfied by two conflicting “wants:” to spend time with patients and to have quick patient visits.
What to Change To
To determine what to change to, solve the Evaporating Cloud by challenging all the underlying assumptions (until the cloud evaporates). For example:
- How might the “wants” coexist?
- What other ways can the “needs” be satisfied?
- In what other ways might the objective be achieved?
How to Cause The Change
One of the methods Dr. Cox presented on determining how to cause the change was the Prerequisite Tree, also known as the Ambitious Target Tree. Given a desired future state, ask “Why can’t we do that?” Next, map out ideas to overcome all the obstacles. After that, ask, “If we eliminate all these obstacles, can we do this?” If not, continue building the tree until all barriers are mapped.
There are a number of other TOC thinking processes that were briefly mentioned. Wikipedia contains a complete list.