The Value Generated by TOCICO

TOCICO

TOCICO as an independent and neutral organization of the TOC international community is at cross-road where its value to the community is, to my mind, very high, but it struggles with cash problems. For a non-profit organization the core problem is that generating value to customers does not always return enough revenues.

Of course, the duty of the management of any non-profit organization is to establish the necessary cash for generating the value.  Generally speaking there are three ways for non-profit organizations to raise cash.  Of course the combination of three sources is very common.

  • Sell the generated value in the same way as for-profit organizations. Membership fee is one way to sell value. Selling specific products or services is another way.
  • Be financed by the government or another large organization that provides a budget.
  • Donations by the various parties who appreciate the global value generated by the organization. Bill Gates comes to mind as an example of a billionaire who donates huge money to keep non-profit organizations effective.  Most of the performing-art organizations in the US are financed this way, on top of selling tickets.

Two general comments:

  1. Every non-profit organization is producing value that, from whatever reason, is difficult to sell commercially, and thus such an organization has to be careful to protect its goal from behaving according to profit considerations. Customers evaluate every purchase based on the perceived value of the specific product/service they buy, and not by the overall value generated by the non-profit organization.  Thus, the incoming revenues do not represent the true value of the organization.
  2. Every non-profit organization is constrained by cash. The underlining assumption is that the organization is able to generate more value when more cash is available.  While this assumption has to be checked in reality, it should drive management to exploit the money to generate as much value as possible; no matter how much cash that value brings back.  Eventually the budget of such an organization is spent on maintaining resources and it makes sense that the cash limitation creates a specific internal capacity constrained resource (CCR) that limits the Flow of Value, while the other resources have excess capacity in order to support the internal strategic constraint.

TOCICO was, and still is, financed by selling value, mainly the revenues from the annual conference, delivering the certification exams, and membership fees.

What is the value generated by TOCICO?  And for whom this value is significant?

The goal of TOCICO, to my mind, is to support the spread of TOC awareness, knowledge and successful implementation throughout the world. 

This goal could be especially valuable to four different market segments. Each one of the segments should be divided into two sub-segments:  those who are already familiar with TOC, and those who are not.  Generally speaking TOCICO faces only those who are somewhat familiar with TOC, like having read The Goal.  We need to find marketing ways to raise enough curiosity in TOC and then the value from TOCICO would become clear.  Here are the four segments:

  1. Management consultants. Many managers contemn consultants viewing them as people without deep understanding of the particular reality, while also not accountable for the results.  However, getting an external view-point, based on many other organizations, could be a major opportunity to identify flawed assumptions, which are typical for specific industries, and which any inside manager faces real difficulty to identify and challenge.  Such external view could bring to the table new opportunities that the competitors, being trapped by the same flawed assumptions, cannot recognize.  Certainly TOC develops the skills of consultants to quickly identify key problems and deduce the flawed assumptions behind those problems.
  2. Every manager in any organization. This is based on recognizing that understanding well the TOC insights significantly improves the managerial skills of every manager.  Most managers would gain immense value when they recognize the opportunity.  A possible negative branch for such managers is to announce their views too early and by that being viewed by others as zealots and even be forced to leave the organization.  So, understanding the perspectives of the other managers should be part of the TOC insights and education.  The focus here is on the personal value of the managers, assuming doing well their job would improve their self-satisfaction as well as their career.
  3. Organizations and corporations that are using TOC could get immense value by exposing the wide spectrum of the TOC knowledge to all the organization members. A more specific need of such a corporation is to get focused TOC knowledge and certification for their employees.  Corporations that just contemplate to implement TOC should, in the vast majority of the cases, look for TOC consultants to guide the implementation. TOCICO shouldn’t recommend one TOC consultant over another, but indirectly participating in the TOCICO conference, or watching videos and webinars presented by consultants could assist in the choice.
  4. Academics, both students and professors, who get access to important knowledge that is not a regular part of the current curriculum. Certainly the TOC insights could easily serve new worthy research topics.

TOC knowledge gives consultants significant advantage, no matter whether they use the name ‘TOC’ in their practice or not.  The ability to quickly identify the constraint / core-problem, use the TOC available insights for the direction of solutions plus the systematic use of cause-and-effect, are required capabilities for doing better job.  This is the highest value consultants can get.  Add to it the spread of TOC, which adds more relevant leads and opportunities.

Another value to consultants is the SHARING platform provided by TOCICO.  When you use ideas that are in conflict with the current paradigms, the internal discussions with other experienced consultants are of immense value.  TOCICO is a platform for such internal discussions to take place.

The value to corporations is especially interesting.  In most cases the initial TOC implementation is guided by consultants.  The managers that learn directly from the consultants might, mainly after the consulting company leave, get constant stream of value from TOCICO.  At this stage the corporation faces new needs.  One of them is to make sure all their employees know what they need to know to get the improved results.  New employees also need simple and effective training on the TOC basic knowledge to understand the new thinking behind the not-so-common procedures.  This might require guiding the employees to take the certification exams to prove their level of understanding.  In order to learn the materials TOCICO will launch several educational programs that cover the various certification areas.

Another need of corporations, which can be addressed by TOCICO, is answering the question what next to implement?  This means covering topics that have not been implemented by the organization at that time, like Throughput Economics and the use of Goldratt’s Six Questions for guiding the evaluation of new products/services.  The effective way to evaluate what additional TOC insights should be incorporated next is by participating in a TOCICO conference as well as viewing several videos and webinars offered by TOCICO.

Yet another need of corporations is getting external recognition of achievements.  When the implementation is done in one division it is valuable to radiate the excellence to the other divisions.  External recognition by TOCICO could create pressure on other divisions to achieve this kind of recognition.  Of course, the PR department of the organization could also use that public recognition of achievement to generate more value.

The products/services of TOCICO need expanding into education/training programs to provide more value to all its market segments.  In particular there is a need for training programs. The Alex Rogo program, announced in the 2019 TOCICO conference in Chicago, provides effective guidance for self-learning. Training programs for higher level people could be adjusted to the specific requirements of corporations.  Eventually TOCICO should be able to offer basic TOC education to any individual, or organization, all over the world in variety of languages.

In order to achieve the generation of new ongoing stream of value TOCICO needs to stabilize its financial state.  This means TOCICO needs the support of its members, both individuals and corporations.

My call is to everyone who appreciates the potential value to be generated by TOCICO to become a member and by that support the ongoing TOCICO activities.

Increasing the membership is a necessary condition. When it’d becomes wide enough it’ll also become sufficient, as there are enough great people who are willing to contribute their time to do voluntary work to generate that value.  The neutrality of TOCICO is an asset that is absolutely necessary for both the value and the willingness to volunteer.

Keep in mind the global value of TOCICO when you evaluate the cost versus its specific value.  Eventually any charge for products/services generates revenues that are needed for carrying the full value of TOCICO to the world.

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Published by

Eli Schragenheim

My love for challenges makes my life interesting. I'm concerned when I see organizations ignore uncertainty and I cannot understand people blindly following their leader.

4 thoughts on “The Value Generated by TOCICO”

  1. Website of TOCICO is silent ‘About itself’. Consequently, outside TOC community worldwide, it may not be known about the value it generates. Then, Value generated by it has to be perceived by others for any payback. Lastly, its cash-constraint shall be overcome through 5FS of TOC and if it means becoming ‘for-profit’, why not?

    Lean, Toyota Production System, TPM and other approaches (even DDP) are able to sell itself whereas TOC, despite being better than all these, is unable to generate commercial pull. Why? That needs to be overcome by TOCICO, in TOC Way, for it to be recognised as generating any value to its customers lest it should become a self-fulfilling prophecy!

    So, the bottom-line is – TOCICO has to do self-introspection and find ways to become more valuable to its customers, from their perspective!!

    As a Member for many years now, frankly speaking, I have not found much value in it, that is!!!

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  2. I may be wrong but it seems you have mixed the value of TOC and the value of TOCICO. If TOCICO is to bring value to members that CANNOT be found from simply engaging a TOC Expert, what could that additional unique value be? And why would that value ONLY be accessible from TOCICO, and not be available by simply asking the Expert community?

    My filter: X or Y does not have value simply by stating that it does. For example “certification” has no incremental value to me (over talking with an Expert): it does not enhance my knowledge more than talking to an Expert, it does not provide access to market, or sales, or processes, more than talking to an Expert. It does not affect my personal or professional success, more than talking to an Expert. Therefore, I’d be better of talking to an Expert, than completing certification. That’s one example. With that filter, what can TOCICO membership provide?

    One possibility: the chance to mingle with Experts, for example at conference (assuming other Experts don’t run open conferences). But if the experts themselves gain no value, why would they keep attending?

    Are there any other unique value points?

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  3. Good question James – what value to ‘experts’ gain from conferences. I dont know – I’m not one!

    I do see value in certifications – for those large organisations who want to spread TOC knowledge across their organisations, and want to ensure consistency and understanding, but dont want to tie internal resources to this task, not do they want to employ outside Experts to do it.

    Eli also said “In most cases the initial TOC implementation is guided by consultants.” That may be the case today, but might it be because there is no convenient way to learn the practical details of TOC? And if so, might this be a reason TOC awareness and implementation has increased only slowly over time – the availability of consultants who ‘know’, and organisations willing to spend significantly on consulting fees?

    I like the injection of making the basic knowledge more accessible, and think there is a great role that TOCICO could play in this. I like what Clarke Ching has done with his recent book – make simple TOC accessible to managers to use locally. Sure this won’t create significant system-wide change, but it will help spread the word. Demand-driven took a similar approach by starting with local changes that staff can do themselves – no big budget, no permission needed.

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  4. Eli, I hope you know I have the most profound respect for you, and consider you one of my biggest mentors. Certainly one of the people I’ve learned more from on how to think clearly. But having said that, I have to say I disagree with what I think is the underlying idea being discussed here. In fact, my gut reaction when I read some of the suggestions for companies was that not only they aren’t the path of less resistance, but in fact are plain wrong.

    For one, managers usually don’t have time and/or interest in taking courses to become experts, and get certifications to prove it. We know that taking a couple of courses isn’t enough to become an expert that can successfully implement the concepts in real environments. Yes, good quality courses can take you a long way in regards of theoretical knowledge, but only after years of constant exposure to challenging situations, success & failure, introspection and repetition you can get to be a proven consultant that can successfully drive change in a company.

    Thus, having TOCICO promoting a DIY way of starting new TOC projects, or extending existing projects to different areas of the company, poses a risk for the TOC community, as I fear we would find ourselves having to fight ever increasing claims of the type of ‘TOC was implemented here and it didn’t work’, because it was implemented by people with lack of experience. We all know how difficult it is to sell TOC to people who never heard of it before. But it proves even more difficult to try to sell it to companies that already tried it and failed. This is something we’ve constantly seen “newer methodologies” benefiting from in the recent years, feeding from past TOC implementation failures, and claiming that they are better than TOC (which in reality they aren’t… same principles, different packaging… but I digress).

    Another fear is that this would distract companies from doing what they were created to do. This would also go against the TOC experts best interests. It’s a matter of effective use of the manager’s most precious resource: time. Again, most managers simply don’t have the time to become TOC experts. We should be glad about this reality. Why should TOCICO be interested in trying to “fight” that reality, and in the process, become competition to their affiliates? Why would they want to promote courses for corporations as the suggested alternative to hiring a capable and experienced consultant? The same could be said for the “what to implement next” suggestion. Why would TOCICO want to do that directly instead of helping position and promote the affiliated experts that could do it just as well?

    Instead, in my humble opinion, TOCICO should have one main goal and focus in mind: marketing TOC. Although the article talks about marketing, segmentation, etc., I don’t see marketing being the main purpose TOCICO seems to be aiming for, and it frightens me. This is more evident with claims like this: “Eventually TOCICO should be able to offer basic TOC education to any individual, or organization, all over the world in variety of languages”. It misses the point. The market needs to be “educated”, but not to become implementation “experts”. It needs to be educated in the way marketing does: what TOC is, why it’s needed, why it’s better. It needs to create more appeal for companies all over the world. It needs to broaden the TOC market.

    I don’t see enough work being done to accomplish this objective, helping TOC become the go-to methodology for running companies. In a world run by mass marketing campaigns, and big partnerships, why isn’t TOCICO doing much much more of it? TOC needs to be ubiquitously known as “the way”. It needs more exposure. Big efforts need to be done to partner with global “corporate influencers” to help spread the word.

    For instance, having been around for a shorter period of time, I still don’t understand how come DD-MRP beat TOC to form an alliance with SAP, one of the biggest global influencers in corporate management (whether we like it or not), and in the way became the methodology that SAP is now presenting as the main way?.

    Now, TOC consultants/experts need to be formed, their processes standardized, and their knowledge and experience certified. The TOC BOK needs to be expanded and improved. TOCICO can take responsibility over some of these functions, although it needs to do it in order to be able to achieve the goal of making TOC the main way. In that sense, these functions would become necessary conditions to the goal, but not goals themselves.

    So TOCICO shouldn’t think of itself as mainly an academy, which is what the article leads me to believe it does. It should think of itself mainly as a marketing agency. TOCICO should help companies find TOC in the first place, understand it enough to get them excited about it, and then help them find certified/proven experts to teach them what they specifically need to know, and guide them through a successful and long term implementation. Only then it’ll become valuable to TOC consultants and experts, which to me is the real market of TOCICO. Then, and only then, membership prices could go up and fund its operation without a problem.

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