I’m very happy that due to several thought provoking comments I feel like to continue “thinking aloud” about the boundaries of TOC, the topic of the previous post.
Humberto Baptista is right noting that the set of two axioms I have introduced define the conditions where TOC is effective in guiding management to achieve more, but they do not define what TOC is. Boundaries do not define the essence of anything, just the areas it applies to. Still, the boundaries are important to understand why the methodology cannot apply if the conditions are not valid. Philip Marris raised reservations that TOC applies even when the conditions do not, like leading to agreement on the goal using the thinking Processes, and taking some mandatory steps when the performance to clients is chaotic. I think that one or two TOC ideas might be useful, but TOC as such is not effective when one of the axioms do not apply.
It occurred to me that another axiom exists:
- The goal of the organization is unlimited.
When the intent is achieving a specific result, like raising donations for a specific case, and then dismantle the organization, many of the TOC guidelines, like ensuring win-win, do not apply.
The Pillars raise very interesting remarks from Humberto, but also one big question on my part:
Is TOC an Ideology?
In other words does TOC guides us just to get more from the goal, or there is something higher than the goal?
Goldratt spoke several times about the necessary conditions that accompany the main entity of the goal. By stating necessary conditions, based on specific values, the owners of the organization are able to include their own ideology within the goal. For instance, a necessary condition could be treating men and women equally in all levels of the organization. As a necessary condition this is stronger than making more money, or whatever the goal of the organization is.
To my mind, TOC itself is not an ideology; it is built on certain observations that in the vast majority of the time are required for achieving the goal. The pillars are such key observations, but, I don’t think they are axioms. There are two necessary conditions for an axiom:
- Any claim which is in conflict with even one axiom is, by definition, invalid.
- An axiom cannot be logically deduced from the other axioms.
Take the pillar about resolving any conflict. Do I conceptually believe that there are no conflicts in reality? I admit I have difficulty in accepting that basic assumption. However, I think it is mandatory to do our best to resolve any conflict as such a solution has better chance to achieve much more of the common goal than any compromise. I like to deduce from that pillar the importance of collaborations, the opposite of conflicts, as a generic direction to gain extra capabilities and capacity required to achieve more. I believe that TOC needs many more collaborations to spread its reach.
I do not believe that reality is harmonious. I do believe we should strive to achieve harmony.
The belief that “The Bigger the Base the Bigger the Jump” is associated with “Never Say I Know”. However, I doubt whether it is always true in reality. The idea is to encourage those who are already exceptional to be aware that they can still jump to an even higher base. I agree to that, I just cannot say whether the jump is bigger than for those with currently smaller base.
Do we, the TOC community, truly look for the next Jump?
What do we do about it? Do we all look for knowing more?
The difference between ideology and pragmatism is that every part of an ideology is absolutely mandatory, while pragmatism might sometimes relax one or two leading principles. My own observation is that TOC is mainly pragmatic and the pillars are guidelines rather than instructions. Thus, I would treat an idea that includes blaming people as TOC when the cause and effect analysis shows that the blaming does not cause serious negative branches. In other words the specific blaming would not allow reducing the responsibility for results and would not reduce the motivation of people. That said, I might not like a certain idea because it clashes with a certain value that is important to me. I’d just refrain from calling that idea non-TOC.
Humberto suggests adding a fifth pillar: “Don’t optimize within the noise.” This is certainly an effective TOC generic guideline for improvements and our expectations from them. I only think that it could be deduced from two of the existing pillars. The inherent simplicity means ignoring many variables that have much lesser effect than the natural noise. I interpret “Never Say I Know” as encompassing the cause-and-effect I’m currently not aware of with the natural fluctuation of many variables that impact performance. This defines a very wide base of what we don’t know; to me this is the uncertainty we need to live with, while trying to reduce it.
What I miss in the pillars is the recognition of the power of cause-and-effect analysis to predict outcomes, and when a prediction does not materialize going back to the analysis and identify the flaw. It is possible that this realization can be deduced from the other pillars, but then I like to see the analysis and spread the knowledge.
So, is TOC an Ideology defined by the Four Pillars?
Are we allowed to challenge the pillars? Is each of them fully mandatory for TOC? Would this attitude support making TOC the way to manage organizations?
Eli Schragenheim 
Good discuss Schragenheim!
I think that organization which is practioner of TOC should know about the idea of increase of units of the GOAL and to understand it is necessary to FOCUS on the CONSTRAINT. Furthermore, the organizations should apply the tools for implement the TOC. Discuss what is or what is not TOC is how to optimize within the noise. The community should discuss the tools and principally how identify and explorer the CONSTRAINTS, which moving on space and on time.
For me, TOC is a line of thinking.
TOC is search for increase units of GOAL and FOCUS on the CONSTRAINT.
Discuss about pillars is discuss about a tool. Tool is all that help us to build something. The pillars help us implement the TOC.
Sorry by english bad, but I hope you understand the idea.
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This is becoming a more and more interesting discussion. Thanks to everybody. I have a number of thoughts and I think I will sprinkle them in rather than trying to make an exhaustive and complete post of my thinking.
Let’s start with this:
It occurs to me that I am more optimistic (or less pragmatic than Eli). I prefer to treat the pillars as unshakable and then do my best to see if I can make them shake or even budge at all.
It does seem to me that there is an opportunity to to be reductionist, for example, does not the existence of inherent simplicity imply that there need be no conflicts? Or said in another way that Goldratt and I once discussed, it is our inappropriate perspective that both causes and keeps us blind to the injection(s) that evaporate any cloud. People cause the conflicts that Eli mentions are commonplace and there are ever fewer good (long term) reason to do so, like survival, etc. So, TOC is a tool to untangle the mistaken assumptions that underlie the conflicts.
However, even if inherent Simplicity is the mother of all the other pillars, as I believe, I like Humberto’s explicit admonition against imposing any types of coarse-grained precision on variable situations. I think many people will miss the point that they should seek to reduce variation where they can but not seek to impose certainty where they can’t.
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Hi Eli,
Each new forum is even more interesting than the last one! (including LinkedIn Forums).
I think if we ask for this issue to many people (incluiding managers and member of TOC comunity) we are going to get two kind of answers: some people will think “every part of TOC is absolutely mandatory” (not neccesary they are going to say it, but their actions will demostrate it), which means TOC is an ideology for them, and some people will believe that “sometimes you can relax one or two leading principles” which means TOC is a pragmatic approach for them. Then, I think is not possible define TOC only in one “label”.
For me, TOC is a very powerful thinking approach for improving human beings based systems (organizations, lifes, etc), with pillars as its boundaries and thinking processes as its essence. BUT… is not the whole ocean, it is “only” one large and deep sea 🙂
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Eli,
Why do you feel the need to introduce your 3rd Axiom? You say “When the intent is achieving a specific result … guidelines, like ensuring win-win, do not apply”.
My experiences in the projects world are the exact opposite. Even though the project’s purpose is a specific result, aligning the interests of the parties, so that they either all win together or all lose together, is, for me, a necessary condition for the achievement of a great project that is as fast as possible, and achieves the objectives at minimum cost.
I know projects with organisation tension can achieve the objectives, but I believe they do so at a cost, time and quality premium. On-time, on-budget, to-specification does not define a great project in my view, unless the time/cost/quality targets are also “great”.
Thanks for posting…keep up the great work you are doing here
Ian
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Eli
Why do you feel the need to add your 3rd axiom?
You said “When the intent is achieving a specific result … guidelines, like ensuring win-win, do not apply.”
My experience in major capital projects is at odds with this claim. Such project have a single goal, but without a win-win mindset, and commercial aligned rewards, then chaos often ensues. I also believe that one reason that CCPM has not had a major impact yet in this field is the lack of win-win in the procurement and contracting processes that are common in the industry.
I agree that win-win is a necessary condition to success of CCPM in this environment, but it can be applied in a single project, with a specific objective. I don’t agree that win-win requires an unlimited goal, if you define a single project as an organisation. I can see how it is relevant for the independent commercial organistions that come together and form the project team, but even then I cant see how if one of them has some more specific goal (eg the owner of a contractor may wish “to retire at 60 with $5million in the bank)”, that this means TOC cannot contribute.
I’m also unsure about your axiom #2. Surely TOC is extremely powerful with chaotic organistions in helping them move from chaos to POOGI. IF we just look at the axiom, might it prevent people from using TOC to bring order to chaos?
Ian
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Hi Ian, a very good question that deserve a good answer. I try here to come up with a good enough answer. We both might need more time to thing about the ramifications and come up with better overall answer.
First, when an axiom is not valid it does not mean that none of the TOC ideas would bring value. It does tell us that TOC might not apply as a full approach, so a lot of care needs to be in place.
Take Axiom 2 about non-chaotic delivery performance to the clients. I don’t agree that POOGI is what they need at that time – they need something truly drastic to stop the chaos very fast, probably leaving quite a number of problems that future POOGI would be very beneficial. But, when the delivery is chaotic then clients look elsewhere for answering their needs. Ask yourself what could be the core cause for chaos that goes all the way to the clients? To my mind it has to do when several constraints are interacting. Lack of market demand plus lack of money and maybe also lack of care of employees. When the two of three constraints interact there is no one critical move that brings the system to sufficient stability to stop the chaos and maintain “acceptable” delivery to clients. In such a case, the organization has lost its Inherent Simplicity and it is complex system, which cannot live for long.
Let’s now deal with Axiom 3. Projects are usually part of a larger system, one organization or a collaboration of several. Thus, the goal is much wider than the objective of the project! Projects that truly look for achieving a clear finite objective, and the participants don’t see themselves belonging to a higher level system, would judge any decision on just the short-term achievement of the objective and nothing beyond that. In such a case the value of the pillars are subject to challenges. In the short-term there are many cases where win-lose is doable and allows achieving better results. It is in the longer-term that win-lose always raises the warning that the win-lose would turn into lose-lose.
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Hi Eli. Sorry I posted twice – WordPress gave the impression my first attempt was lost!
Referring back to the original subject of this post – what is, and isnt TOC, or rather when TOC is effective in helping management to achieve more, does your answer mean that you feel that a short-term use of TOC to bring improvement to a specific department/site/project is not “real TOC”. I can see how an organisation could miss many strategic opportunities if it only applies TOC locally, but surely that is still TOC?
What I meant in commenting on Axiom 2 was not that they use POOGI immediately, but that TOC can help move the organisation from chaos to POOGI, albeit over a period of time. Wasnt the situation at the Barrington factory in The Goal chaotic, and didnt the application of the 5FS & the TP help bring order to the chaos, and with it business benefits? Wasnt that TOC?
Whilst win-lose as you say is doable, I am not sure it often achieves better results, even in the short-term. In Critical Chain, Professor Silver shows how looking for win-win helped in even a one-off negotiation of improved delivery times (with a stubborn supplier). OK it’s a book, but the scenario seemed realistic to me. Win-lose deals usually require tighter control and “policing”. Like with the above, I dont see why having a specific goal means that TOC is unlikely to bring significant benefit.
I can kind of see how your Axiom 3 is valid, even in a one-off project, in that the aim should be to maximise the overall ROI, and do it as fast-as-possible, rather than hit some guessed time & cost objective. My uncertainty was more in your statement about things like win-win not applying because there was a specific objective. That was the part I felt isn’t true.
And just because an organistion fails to capitalise on a local/project application on TOC, and apply it holistically, I dont see how that makes it “not-TOC”.
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Ian, I actually don’t care at all when a certain idea/management initiative is “not-TOC”. I only care whether it is beneficial, meaning drawing more of the goal, and whether there are serious negative branches. I think we should stop using the term “not-TOC”. My comment about applying TOC to environments where one of the axioms is invalid is to be very careful, because many of the ideas that were generated within TOC, assume the axioms are valid. Of course, some TOC ideas may apply.
For me the Goal did not describe a chaotic organization. The Goal described a standard organization with some problems. Chaos means the clients are unable to tolerate such performance. The tolerance depends on the performance of the competition, the alternatives from the client perspective.
Finding cases where win-win is better than the optional win-lose do not prove that there are no cases where win-lose is much better for the win side. The belief than win-win is better and that every win-lose would eventually turn into lose-lose, is based on looking into the long-term. In the short-term it is not realistic to assume win-win is always preferable, but it could be that in a specific case the win-win is still better.
As a philosophy for the individual, win-win is probably a safer approach, but then I look into the time horizon of the life of an individual. And I still need to explain how people whose basic philosophy is win-lose become so rich and stay rich all their life. Organizations are SIMPLER systems than one individual, because having to cope with many individuals you have to settle for the common denominator, like having a single goal. I believe that for organizations, with unlimited span of time and goal, win-win is much preferable all the time.
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Dear Eli and fellow TOC’ers:
(My apologies upfront for being irreverent in rest of this post. TOC experts might also feel that my understanding of TOC is limited to its very rudimentary aspects, which is true. And, of course, what you see below are just my opinions not necessarily backed by logic or facts.)
As much as I wanted to avoid getting into a discussion about pillars and boundaries of TOC, I could not help myself. Not that anything useful will come out of us TOC zealots debating these points but what the heck! I don’t have anything better to do on this Sunday morning anyway. So, here we go:
First, a few general comments about the question of what is TOC and what is not TOC:
-Thus far, what is TOC and what is not TOC has been based on what Eli Goldratt embraced or invented. For example, if Eli Goldratt had invented it, Agile/ SCRUM would definitely have been part of TOC today. Similarly, if Eli Goldratt had not invented Strategy & Tactics trees, he would have deemed them to be too complex and not TOC.
-The only useful purpose in answering this question is around what Rob mentioned. Clarity about a product’s differentiators and unique value proposition can help in marketing and selling it, and even in improving the product itself over time.
-TOC is not the be-all and end-all of management. An underlying desire to prove that everyone else is wrong about everything in management has been a major reason for how TOC has lost its simplicity over the last 25 years.
-The (three or) four (or five) pillars feel like an attempt at winning and keeping converts by asserting moral superiority over other management tools and techniques (“we believe in win-win, they don’t”; “we believe in simplicity, they don’t”; “we believe people are good, they don’t”; “we are humble, they are not”) rather than anything useful.
Now to the less frivolous part of this post.
To highlight TOC’s differentiators and the “TOC lens”, I first look at the categories of solutions that I consider to be TOC. In order of most used to least used, these are:
A. Pull Systems enhanced with the differentiator of Time Buffers/ Buffer Management
B. Collaboration and Conflict Resolution: the differentiator being Win-Win based on maximizing shared objectives rather than compromise around local needs.
C. The Five Focusing Steps: the differentiator from other constraints-based techniques being protective capacity/subordination vs optimization.
D. Throughput Accounting: the differentiator from Cost Accounting being the ideas of T&OE and T/cu vs 100% allocated costs.
What I see as being common (the TOC Lens) in these these management tools and techniques is that they all explicitly recognize that organizations are systems of inter-dependent elements (the very definition of a system) and that these systems function under conditions of uncertainties and process variability. I know you will all agree how all these tools and techniques have been created/built around this simple recognition.
To recap what you already know – given the interdependencies, uncertainties and process variability,
1. (MOST OBVIOUS) There is usually on constraint that determines system throughput. Therefore, to maximize system throughput, one management objective should be to get the most out of (exploit) the constraint. More importantly, to exploit the constraint under conditions of uncertainties and process variability, we should maintain enough protective capacity in the system and subordinate our policies, decisions and actions to exploitation of the constraints.
2. To ensure proper allocation of resources on a day-to-basis (what to do and when) under conditions of uncertainties and process variability, we should use PULL SYSTEMS rather than forecasts and detailed schedules. To enable a PULL SYSTEM in low volume/non-repeptive operations, use time buffers rather than inventory buffers.
(Time Buffers can also be used for management control. Agile sprints are also a form of pull system with Time Buffers).
3. It’s a mistake to allocate 100% of the costs to individual products/ services and departments under conditions of uncertainties and process variability. A better segmentation is throughput (only truly variable costs are allocated) and shared operating expense (resources whose usage cannot be predicted or are too minor to be tracked at a product level). Another useful device, given the constraints, is T/cu
4. Collaboration should be based on maximizing system throughput/shared objectives rather than local measurements/objectives.
I want to repeat that my understanding of TOC is extremely limited (never could sit through 15-day Jonah programs or even 2-day workshops; could only read The Goal, The Race and The Haystack Syndrome – found other books to be too advanced); that this is not a serious post, it’s just something to while away a lazy Sunday morning; and I don’t believe that TOC is not the be-all and end-all of management.
BTW, the five most consequential inventions in operations management have been The Factory System, The Assembly Line, Kanban, Agile/ SCRUM and UBER (undoing The Factory System and going back to the Mercantile System).
That’s all!
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I do my best to get out of the syndrome of TOC zealots. I like to be able to follow Goldratt’s excellent ideas and get rid of other Goldratt’s ideas, like challenging any other managerial practices. By the way, even Goldratt himself backed-off of this tendency, but I agree that some followers still do. While I admire Goldratt very much, and I carefully check every idea of his, his ideas are not the Bible, and we should consistently re-evaluate them. I even tried to re-evaluate the five-focusing steps! I also challenge T/CU and think it causes more damage than benefits! The difference between us is that I think that the combination of Goldratt’s ideas and tools, including those that call for re-evaluation, provide an overall practical and effective management approach that I call TOC. It is not DBR or CCPM, but more how to construct better and better solutions and how to carefully check them. This is not a definition of TOC, it is the abstract concept I have in my mind.
It could be that we should treat Agile and JIT as fully compatible with TOC. I certainly see the value, I still think there are some negatives that need to be sort out, and certainly define the boundaries for which these methodologies fully apply. But, these require in-depth analysis and I wish we would do it and look upon the analysis as TOC.
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It seems that any management technique or tool that is created around the recognition that an organization is a system of interdependent parts AND around the reality of uncertainty and process variability, is TOC. Regardless of whether it was invented by someone who is TOCICO certified or not.
In addition, I would use the litmus test of simplicity; if the resulting technique or tool is too complex, then it has most likely ignored the existence of “dependencies” or “uncertainty/variability” and needs to be refined. The Haystack Syndrome (especially its subordination logic) and the S&T trees, for example, do not pass this litmus test.
P.S. A technique/tool can be simple but still flawed because it overlooks “dependencies”, “uncertainties” or “process variability”. The concept of T/CU, for example, is simple but flawed because it overlooks “uncertainty”. Ditto for the concept of SPC – simple but flawed because it overlooks “dependencies”. And, of course, cost accounting – simple but flawed because it ignores “dependencies”, “uncertainty” as well as “process variability”.
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We come closer to agreement here. The recognition of dependencies combined with uncertainty is a central element in TOC. I’m not sure it covers the full spectrum of motivation and conflicts that require resolving rather than compromise. Recognizing the power of clear cause-and-effect reasoning is another central aspect of TOC.
What is your measure of “too complex”? I fully agree that the Haystack (DBR) was too complex and by accepting Simplified-DBR Goldratt actually backed-off the Haystack second part. I have several issues with the S&T as a format for Strategy planning, but not because it is too complex. What the S&T is doing is simplification of the common concept of ‘Strategy’ by the distinction between the objectives (what Goldratt called “strategy” and the actions to achieve the objective (Goldratt called it “tactic”). The presentation of the S&T made it a very complex structure, actually it is not. What it misses, to my mind, is recognizing the uncertainty and the rules for the execution. Eventually I like to write a post about the S&T, the good things and the negatives to my mind.
I fully agree that being simple does not mean flawless! But, what is the main problem with complexity? I think that management technique that is “too complex” means it cannot be practically followed (executed). If this is the claim then YES we should shy away from complexity.
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Dear Eli:
Cause-and-effect is not unique to TOC. Even SPC and Cost Accounting (like every other tool and technique in the discipline of operations management/ management science/ management accounting) assume cause and effect. It makes us feel good to claim that “we use cause-and-effect and others don’t”, but it’s neither true nor useful.
Any management technique/toll that contains too many rules, too many instructions or too many assumptions is too complex, and hence not practical.
BTW, S&T’s are flawed not only because they are too complex (too many assumptions, too many type of assumptions, and too many instructions) but also because rest of the world first has to “relearn” the meaning of strategy and tactics.
But there is no point in us two old people getting into an unproductive argument. We can simply state the disagreements and build upon the one agreement we do have. In that vein, I would like to continue a discussion on litmus tests.
SIMPLICITY is a good litmus test because if you recognize dependencies, uncertainty and process variability, you have to end up with few rules, few instructions and few assumptions. But clearly, it is not a sufficient test.
I can think of one more litmus test – LEVERAGE. If a tool/technique does not significantly reduce management effort, or does not lead to a few decisions/ actions that have a disproportionate impact on performance, then it has probably ignored dependencies, uncertainty or process variability and is not TOC.
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To my mind buffer management is the only truly original idea. Certainly not the impact of a constraint (called scarce resource in Economics). The power is the combination of various ideas. The emphasis on cause-and-effect together with the tools make stick better, not the that is truly friendly to use.
All right, we both have outline our personal approach to TOC and we can go on to other matters.
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Eli
To end on a note of agreement, I also think that explicit Time Buffers/Buffer Management and Protective Capacity are 2 of the 3 new ideas in TOC that are TOC.
Time Buffers allow Pull Systems to be implemented in a wider range of operations. Protective Capacity makes constraints based management possible.
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Hi all,
Great comments. I think the value in this kind of discussion is “thinking out loud”, without too much worry about whether I am right.
From my experience with the TOC community, I see a relatively low level of blind zealotry, that “it is the only way”, or the underlying desire to prove others wrong (rather than to find the right/best solution). Another thing I like about the TOC community, is the striving for clarity and consistency, which I see as something that helps communication and understanding and acts as a base for improvement. I can see how it can come over as narrow-mindedness, but as a recent arriver to the community, and someone who has been involved in other professional fields, I find the TOC community relatively open. Maybe I just havent met enough people though 😉
Did TOC ever claim to be a collection of “unique” tools? I think the true innovation of TOC is the way it combines into a single, and relatively coherent, body of knowledge a range of ideas, methods and inventions. Many of the elements are not unique to TOC, not were they developed along with TOC. So what? Innovation has been defined as a new application of inventions, and I think TOC passes this test. I find the way it has collated, described and improved upon a wide range of techniques to do with problem solving and managing organisations, in a way that (at least for me) is relatively accessible, it truly innovative. And then the way that people are constantly trying to build the toolkit and share ways to better use it, like in this debate, is POOGI in action.
Keep arguing (oups debating) folks!
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