The Shark and the Goldfish Positive Ways to Thrive During Waves of Change by Jon Gordon_3 pot

Assume now that you do agree withyour colleague and believe that if you lower prices, more customers willbuy your product.. You might still be hesitant to implement a price reductionbeca

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24 Thinking for a Change

More often than not, the answer is not obvious at all Considerthe case of a multibillion dollar, multisite chemical company One

of our projects was to help it improve one of its distributionsystems Before we began to talk about the constraints of theirsystem, we asked the team to develop a common understanding

of the role of the distribution system as it relates to the largersystem of which it is a part They considered the 40,000' view ofthe corporation as a whole and engaged in a dialogue on whatthe purpose of the distribution system is in that “bigger box.” As

a result, the team was able to focus on improving the distributionsystem, not as an entity in and of itself, but as an enabler ofthroughput generation for the corporation

2 Determine the system’s fundamental measur ements What doesimprovement mean for this system? What are its global measures

of success? Of failure? How does the system know whether or notit’s performing well? This adds clarity to the first question Forinstance, let’s say that we’ve defined the system to be a companyand that the purpose of the company is to make more money now

as well as in the future.* The question of fundamental ments asks, “So what do you mean by make money now as well

measure-as in the futur e?” The answer is, “the relationships among put, inventory, and operating expense — namely, net profit andreturn on assets.” You know the company is doing well if, overtime, its profitability and return on assets is continually good andgetting better, but what are the fundamental system-measures ofthe distribution system that I referenced above? How does it knowthat it’s doing well? Sure, we can say that ultimately they are thesame net profit and return on assets But these measures don’t tellthe distribution system whether or not it’s fulfilling its role Theteam identified some basic measures that looked at its impact onthe company’s constraint, as well as the financial measures overwhich the system has direct control

through-Margaret Wheatley, in her work linking organizations with living tems and the sciences of chaos theory, quantum physics, and field theory,**points out that there are three interconnected dimensions to organizational

sys-* I realize that this statement of purpose is strictly the shareholder view We’ll address the perspectives of additional stakeholders, and enlarging or deepening the statement

of purpose, as we approach the Thinking Processes.

** Wheatley, Margaret J., Leadership and the New Sciences, Berrett-Koehler Publishers,

1992, 1994 Wheatley, Margaret J and Kellner-Rogers, Myron, A Simpler Way, Koehler Publishers, 1996.

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Berrett-The Berrett-Theory of Constraints 25

improvement Recognizing that people are the inhabitants and improvers

of our organizations, she suggests that these dimensions are:

In my work with nonprofit organizations, I have come to the conclusionthat the answers to the two prerequisite questions are extremely unclear,and this is the root of most of the problems these organizations contendwith At nonprofits, there is a tendency to believe that the measures are

so intangible and that attainment of purpose is such a subjective call, thatsuch measures are simply not discussed The focus ends up to be onmeasuring and managing the things we call “tangible,” such as money.Improvement projects are implemented to improve numbers — member-ship and fund-raising (or taxes, or tuition) All too often, these projectsare undertaken at the expense of moving forward relative to their purpose.This results in dissatisfied stakeholders, drops in membership, losses ofmoney, and a renewed focus on managing the numbers

For those of you who are employed by for-profit organizations, guesswhat? The same problem exists Unless you’re the top management oryour pay is directly tied to the profitability of the company, it’s difficult

to rally around the “money is THE goal” banner Most people want tospend their time in meaningful ways When companies encourage theirpeople to enter into a dialogue aimed at discovering and clarifying theircommon purpose as co-members of an organization, the process ofimproving the bottom line becomes much easier and more fun

I am not advocating that you spend an inordinate amount of time andeffort doing process flow and other such diagrams to articulate thesethings ever so precisely, before you ever get started on the task ofimproving the system I am suggesting that when you begin an improve-ment effort, that you begin it with a dialogue on these important issues.(Assuming that you want ongoing improvement, I suggest that you encour-age the dialogue to be open and ongoing.) What is the system that weare trying to improve, what’s the purpose of the system, and what are itsglobal measures? This dialogue will help you to take a focused and whole-system approach to your improvement efforts

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In the process of clarifying system, purpose, and measures, you mayfind yourself struggling with the answers to your questions Enter the TOCThinking Processes

In deploying the five focusing steps, it is inevitable that policies andparadigms will need to change Often, identifying the policies and para-digms that need changing is a “no-brainer.” At least as often, it isn’t Enterthe TOC Thinking Processes

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Shifting Exclamation Points! to Question Marks?

The TOC Thinking Process (TP) tools are used to recognize, verbalize,challenge, and/or change assumptions — starting with our own Effectiveuse of the TP requires a different mindset than that which we areaccustomed to using

If you are a participant in the Western culture, you are rewarded whenyou are right and punished when you are wrong Even back in kinder-garten, the child who raised his hand with “the answer” was the childwho got picked by the teacher The “wrong answer” received a “sorry,wrong answer,” and the teacher went on to the next child who wasfrantically waving her arm, convinced she had the “right answer.” If thatchild did recite the right answer, she received warm smiles and praisefrom the teacher and admiration (along with some jealousy) from the rest

of the class

As managers, we are expected to make presentations after we’ve doneall the research and answered all the questions The proposal that ispresented which results in a thumbs up, no questions asked, is theproposal we all want to make Questions or challenges to our proposalsare considered a sign that we “haven’t done our homework.” QuestioningSL1019ch02frame Page 27 Friday, June 23, 2006 9:28 AM

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indicates a lack of knowledge, which is considered a weakness edge is power, so he who has (or at least appears to have) the mostknowledge is often anointed “most powerful.”

Knowl-In The Fifth Discipline* Peter Senge describes the need for our nizations to evolve into learning organizations, which he defines as

orga-“organizations where people continually expand their capacity

to create the results they truly desire, where new and expansivepatterns of thinking are nurtured, where collective aspiration isset free, and where people are continually learning how tolearn together.”

In a world that persists in getting smaller and smaller, and where therate of change continues to accelerate, our organizations must evolve intolearning, adaptive organizations if they have any hope of surviving, letalone thriving Every organization — whether it is the corporation thatemploys you, the house of worship you pray in, the family you are amember of, or the community you live in

I recently commented to the president of a small printing company,

“Brad, your company is implementing TOC at the pace of your learning.You implement only what you have learned and internalized to the degreethat you feel comfortable teaching it to your people.” He concurred andbegan to take action to improve his own rate of learning in order to helphis company accelerate its rate of improvement Perhaps one day he willdecide that if he gives his employees the opportunity to “learn first,” hisown rate of learning (and thus improvement), and his company’s, willaccelerate faster than he ever dreamed possible

Organizations are collections of people It’s people who operate thetechnology, share information, perform processes, and determine purpose.Thus, in order for any organization to become a learning organization,people must become learners This means that we must become observers,

We credit scarcely any persons with good sense exceptthose who are of our opinion

La Rochefoucauld, 1665

* Senge, Peter, The Fifth Discipline, Doubleday, 1990.

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First Steps 29

questioners, listeners, and information sharers My experience is that theThinking Processes provide an approach to articulating, examining, andlearning from our thoughts, observations, and communication in a way thatdeepens learning, while at the same time picking up the pace of learning.The key, however, is to be open to learning Try to shed your I’mright! attitude and put on your learning hat It’s time to challenge yourown assumptions, explore possibilities that your assumptions prevent youfrom seeing, and listen to others challenge you in a very rewarding way.Listed below are three steps that I recommend before using any ofthe thinking process application tools When you follow these three stepsfirst, you will save time, and you will use the appropriate tool for thesituation You will be less likely to throw away new ideas before yougive yourself a chance to explore them As a result, your solutions will

be much more robust

1 For mulate the question In The Haystack Syndrome, Dr Goldrattdefines information as “the answer to the question asked.”* Thethinking processes are systematic approaches to help us seek outanswers to our questions Thus, they are systematic approaches tofinding information in situations where the data might be overwhelm-ing or confusing Before you sit down to use one of the thinkingprocesses, ask yourself what question you are trying to answer Thiswill help you to focus and to avoid “paralysis by analysis.”

2 Choose the appr opriate tool Each of the thinking processes issuited to answering different types of questions Just as a hammer

is the right tool for pounding a nail into the wall and a screwdriver

is the right tool for turning a screw, once you verbalize yourquestion, you will have the opportunity to select the applicationtool or tools most suited to guide you to the answer (or answers)

In each application tool chapter, I provide guidelines for the types

of questions the specific application tool is suited to help you with

The acquisition of knowledge always involves the tion of ignorance — almost is the revelation of ignorance

revela-Wendell Berry, 1983

* Goldratt, Eliyahu M., The Haystack Syndrome, North River Press, 1990.

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3 Put on your lear ning hat If you already know! the answer, don’tbother spending time with the thinking process tools! Likewise, ifyou don’t want to find an answer, don’t bother with them either

If you do want to find an answer to your question, make yourefforts worthwhile — put on your learning hat! Old habits oftendie hard If you have trouble with this, a visual reminder might

be helpful Some people actually take a hat or a picture of a hat,and put it in their workspace to symbolize they are wearing theirlearning hat

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You live in Chicago, and it is a cold, winter day You have justgone outside to start your car You turn your key in the ignition,and nothing happens If you’re like me, you turn the key again,

a little bit harder Then again, harder still, and one more time,just in case you didn’t turn it hard enough already Guess what?You have just used what I call “passive” sufficient cause think-ing In a flash of a moment, you hypothesized that the reasonSL1019ch03frame Page 31 Friday, June 23, 2006 9:28 AM

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your car hasn’t started is the lack of pressure on the key Thiscan be diagrammed as in Figure 3.1 Note the arrow pointsfrom your speculated cause (putting less than the requiredamount of pressure on the key) to its resulting effect (the cardoesn’t start)

When the only result of your attempted solution is pain inyour hand, you realize that the car is not going to start throughbrute force You begin to think about what the problem might

be, and you move into more “active” sufficient cause thinking.You might guess that the battery is dead, and you begin tocheck whether or not this hypothesis is correct You do so bychecking for additional effects Inevitable results of a deadbattery would be lights and a radio that don’t work, as dia-grammed in Figure 3.2

Notice that you have gone through a pattern of speculating a causefor an effect, and then proceeded to check whether or not you werecorrect You checked the validity of your speculated cause by looking foradditional, inevitable effects of that speculated cause When you arespeculating causes for effects, or effects of causes, you are actively usingsufficient cause thinking The TOC Thinking Processes add a twist, bychallenging us to ask why Why do we believe that something causessomething else? Why do we believe that an effect is caused by that which

we believe causes it?

Figure 3.1

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Sufficient Cause: Effect–Cause–Effect 33

We hear and use sufficient cause thinking every day Some examplesare the statements below, which are diagrammed in Figure 3.3:

• If we lower our prices, then more customers will buy our product

• My wife will be happy if I bring her flowers tonight

• If I study hard, I will get good grades in school

Chances are, you’re saying to yourself, “So, what’s with the diagrams?

I learned how to diagram sentences back in grade school I haven’t had

a need to do that since then, and I certainly don’t see why I should do

so now!” The reason for the diagrams is not to separate nouns, verbs,adverbs, and adjectives from each other The reason for the diagrams is

Figure 3.2

Figure 3.3

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that they help us pinpoint the space that might hold hidden, and potentiallyinvalid, assumptions

“So what?” you might ask Why care about hidden assumptions?Because hidden assumptions are the source of disagreements and of “bestlaid plans” gone awry Identifying the “space” where assumptions hide isthe difference between using active and passive sufficient cause thinking

If you work for a company that needs to increase sales, you have likelyheard the statement, “If we lower our prices, then more customers will buyour product” (see Figure 3.3) Let’s pretend that you are hearing it right now.You might have several concerns Perhaps you believe that lowering priceswill not bring in more customers When pressed to answer why, you pointout that your product is already competitively priced, but that you are notcompetitive when it comes to lead time In fact, you are losing business toyour competitor, whose lead time is two weeks less than yours, and whoseprice is 10% higher You have uncovered what you believe to be an erroneousassumption on the part of your colleague — that your product is priced toohigh to be competitive — and have supported it with evidence of theassumption’s invalidity — losing business to a higher-priced competitor.Figure 3.4 illustrates this

• How are situations like this typically handled in your environment?

• What ar e the potential ramifications of handling situations in thetypical manner?

Let’s continue with this example Assume now that you do agree withyour colleague and believe that if you lower prices, more customers willbuy your product You might still be hesitant to implement a price reductionbecause you fear that lower prices will result in lower margins, and thusyou predict reduced profits for your company This is illustrated in Figure 3.5

Figure 3.4

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Sufficient Cause: Effect–Cause–Effect 35

What if your job depended on finding out whether lowering priceswould likely result in these predicted effects? How would you set aboutyour task? Would you attempt to prove the hypothesis right, or wouldyou attempt to prove the hypothesis wrong? If you are attempting to provethe hypothesis right, you will seek evidence to support it You might usethe diagram to ask the following questions:

• Why should I believe that more customers will buy our product as

a r esult of lowering our prices? (or, What is it about our reality thatleads me to believe that more customers will buy our product as aresult of lowering our prices?)

• Why should I believe that lower margins will be an inevitable result

of lowering our prices? (or, What is it about our reality that leads

me to believe that lower margins will be an inevitable result oflowering our prices?)

• Why should I believe that lower profits will be an inevitable result

of lower margins? (or, What is it about our curr ent reality that leads

me to believe that lower profits will be an inevitable result of lowermar gins?)

You might choose to take another approach and attempt to prove thehypothesis wrong Your questions would be slightly different:

• What, if it existed, would force me to not believe that more customerswould buy our product as a result of lowering our prices? Does it exist?

• What, if it existed, would force me to not believe that lower marginswill be an inevitable result of lowering our prices? Does it exist?

• What, if it existed, would force me to not believe that lower profitswill be an inevitable result of lower margins? Does it exist?

Figure 3.5

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