For this post I come back to my 2011 presentation at the TOCICO annual conference. Any significant change opens the door to new undesired effects and other signals that need interpretation. TOC implementations certainly involve significant changes in the mindset of managers and their subordinates. This topic seems to me a most relevant topic to discuss now, six years after the death of Dr. Goldratt, as the responsibility for the success of the change lies on us and the challenge is bigger than it can be judged from the wonderful change management process we have so carefully planned.
An unavoidable ramification of any significant change is a temporary level of confusion. There is no way that all the outcomes of the change have been properly analyzed prior to the change. While we definitely should use all our logic and intuition to look for negative branches ahead of time, we are not all that clever and we better acknowledge that fact and become ready to face the consequences. Confusion means that some people in the organization have different understanding of what to do and what to expect. Confusion also means we are unsure whether what we see is what we should see. The consequence of being confused and uncertain is making mistakes causing variable level of damage. In itself this is not a big deal as quick fixing mistakes usually reduce the damage considerably.
Transition period is the time it takes from the start of the implementation of the change until we feel confident that the system has been stabilized under the new rules of the change, especially that the intuition is satisfactorily restored.
One characteristic of the transition period is:
The rules in the area of the change during the transition period are neither the old ones nor the new
The term ‘rules’ used above is about the actual way actions are handled. The change has some immediate impact on the current way the area is managed. But, the change itself has not been completed yet, so we might get a mixture of different, even contrasting, actions done by different people. It is also possible that some of the rules and processes have been temporarily changed with the intent of fine tuning them later. The implementation plan has to outline the intermediate steps and for how long they are going to apply. Of course, within the implementation there could be further changes and even deviations from the original plan.
Planning according to TOC includes placing buffers at the critical points protecting from both uncertainty and flaws in the planning logic. Among them are time buffers, but also excess capacities, excess capabilities and readily accessible management attention for solving emerging problems before more damage in done.
A critical element in such planning of a change is asking a typical TOC question:
What could go wrong?
This is a very problematic question because it radiates doubt in the plan and its underlining detailed logic. The point, made by Eli Goldratt, is “Never Say I Know”, and it is this effect in reality that should force everyone to ask that question. It is of special relevance for the transition period where the whole system is vulnerable.
There are three different categories of what could go wrong:
- Flaws in the logic behind the change and the planning.
- Flaws in the implementation. These include:
- Misunderstanding of the logic or the instructions given by the champions of the change.
- Resistance to the change causing deliberate sabotage of the implementation plan.
- ‘Murphy’ – uncertainty that exhausted the planned buffer and caused damage.
- External event that has considerable negative impact on the implementation.
- Moving from Make-to-order (MTO) to Make-to-availability (MTA) without noticing the need to build the stock buffers before moving to the operational rules of MTA! Building stock buffers defines a transition period that has to be carefully monitored.
- The MRP planners took ‘chocking the release’ too severely to the degree of starving the constraint. This could easily happen by defining too short time buffers. Such a flawed move could be the result of misunderstanding, miscalculation OR intentional sabotage.
- A project that serves as the proof-of-concept for CCPM had gone into difficulties due to many new requirements, creating unbearable pressure and delays. Some late additions were caused because of flaws in the planning. Other new requirements were raised because of new information that the competition had been going to introduce new features.
- The planned change required a special budget for additional operating expenses, but then the Bank demanded the immediate return of an old loan, which robbed the organization from its cash buffer. This is an example for an external event.
How should the transition period be managed?
Considering the possible answers to the question what could go wrong should trigger specific inclusion of signals that point to a specific potential threat that is actually materializing. For instance, sales people, who are concerned that their clients get the delivery as promised, cite an earlier due-date to press Production to prioritize “their order”. Checking whether finished goods are actually shipped, within 24 hours, to the clients could note exceptions that show that this is actually happening.
I think that in any operational TOC implementation buffer management should be implemented as early as possible. While this control mechanism is an integral part of the TOC change, its value for the transition period is especially important.
The format of the Strategy and Tactic Tree (S&T) could easily incorporate entries monitoring “what could go wrong” as specific low level entities. In a good S&T one should include the list of signals to be monitored within the Parallel Assumptions part of the relevant entry.
This set of signals should be part of the transition period practice. Most of these monitoring schemes could be shut-off when the transition period is over.
However, this does not address the emergence of an undesired-effect we have not expected. The required general managerial behaviour for this kind of problems is:
Be on your toes!
I highly recommend the champions of the change to be clearly aware of the fact that unexpected problems, sometimes also unexpected opportunities, could emerge in such a period. It could happen at all times, but during a transition period the probability is higher and the potential damage of failing to notice the unexpected is very high.