The vast majority of the managers believe that focusing is absolutely necessary for managing organizations.
If this is the case, then FOCUS as the key short description of TOC has very little to offer to managers.
Let’s consider the possible consequences of Pareto Law. A typical company gets 80% of its revenues from 20% of its clients. How about focusing on the 20% big clients and dump the 80%? Does it make sense?
The point is that the real question is not whether to focus or not, but:
What to focus on?
And, even more importantly:
What NOT to focus on?
The reason of emphasizing the part of what not to focus on is that the need to focus is caused by limited capacity, which means it is impossible to focus on everything and draw the full value from it. The limitation could be a capacity constraint that forces us to concentrate on what exploits that resource. Empowering the subordinates is a mean for an individual manager to focus on the key issues without becoming the constraint of the organization. In many cases the critical limitation is the inability of the management team to multi-task in a way that would not delay truly important issues that require actions. This is expressed by management attention as the ultimate constraint of designing the future of the organization.
Giving up part of the market demand could make sense only when more overall sales, more total Throughput, could be materialized. Only in very rare cases it is possible to reduce the OE, following giving up certain demand, to the level where T-OE would be improved. Reducing 80% of the clients, the smaller clients that yield only 20% of the turnover, would almost never reduce the OE by what is required to compensate for the lost T, which is significantly more than 20% of the OE. This is due to the non-linearity of the OE, where reducing the capacity requirements do NOT yield OE reduction of the same rate. Just think about the space the organization holds and whether the reduced number of clients would allow using less space, and even when that is possible – it might be impossible to save OE due to it.
FOCUS should NOT be interpreted as just one specific area. It has to be linked to an estimation of the effectiveness of the available capacity to focus on without considerable delays to the other areas and topics. And remember the following Goldratt insight:
Segment your Market – Do Not Segment your Resources!
The idea is that many of our resources are able to serve variety of different products and services target at different segments. This is a very beneficial capability. Effective focusing should exploit the weakest link based on the limiting capacity. In most cases the exploitation encourages serving several market segments, but not too many.
The question of what to focus on goes into all the different parts of TOC, always looking, first of all, to the limitation and from that the answer is derived. In DBR it is the constraint. In Buffer Management the question gets a small twist of “what should we do NOW that otherwise the subordination might fail?” The Current-Reality-Tree defines the core-problem of the organization, which is the first focus for designing the future. CCPM focuses on the Critical Chain rather than on the Critical Pass, pointing also to multi-tasking as lack of focus causing huge damage. The key concept in the Strategy and Tactic (S&T) is the Decisive-Competitive-Edge (DCE), which again points to where the focus should be. The DCE is actually based on an identified limitation of the client, while the organization has the capability of removing or reducing that limitation. Building a DCE is a huge challenge that adds considerable load to all managers and professionals, so it makes sense to avoid more than one DCE at a time.
Goldratt brilliantly used a slang in Hebrew, actually taken from Russian, called “choopchik”, describing an issue with very low impact on the performance. The whole point is that choopchiks do have a certain positive impact, which is tempting to tackle, but causing huge loss of not doing the vastly more important missions. I look on choopchiks as a key concept of TOC that is directly derived by the search for the right focus.
The notion of focus according to TOC is relevant to recognize the impact of uncertainty on management. Choopchiks impacts the performance of the organization less than the normal existing variability; call it the level of the “noise”. With such small impact you don’t know whether there has been any actual benefit in the real case. Worthy missions have impact that is considerably bigger than the noise.
What to focus on is a key for achieving better and better performance. The elements involved are the diagnostic of the current state, the few variables that dictate the global performance and what could go wrong. Mistakes in what to focus on are common and are main causes for the death of organizations and for so many being on the surviving mode.
Eli Schragenheim 