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Theory of Constraints for CEOs

Solutions for Symptoms and Root Conflicts Emerging from Organizational Growth and Development
by

Guillermo Taylor

on 8 January 2013

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Transcript of Theory of Constraints for CEOs

Courtesy Alan Barnard and TOCICO Courtesy Goldratt Group and TOCICO Courtesy Debra Smith and TOCICO Organizational Conflicts are dealt with by creating Rules

Rules become Policies, Paradigms, Procedures, Beliefs, Culture, Experience and Know How of the Organization - Measurements, Methods and Mindsets.

Existing Organization Rules are a function of the Technologies, Markets, People and IT Systems that existed when they were created

Rules should change over time, but often don't, affecting organization competitiveness. New realities and old rules result in chronic conflict. Courtesy Goldratt Group and TOCICO The Theory of Constraints:

Every Organization is a System involving People, Goods, Services, Money and Information and must try to maximize its throughput of goal units over time (Flow).

Improvement of Flow is limited by very few (very often one) Constraints.

A System can only be improved effectively by acting on its Constraints Axioms for TOC Problem Solving

Inherent Simplicity: The more interconnected and complex a system, the fewer the points to manage and improve the system.
Harmony: There are no conflicts in nature. Conflicts or dilemmas are caused by flawed assumptions or beliefs of people.
Respect: People are good. Sometimes they hold wrong beliefs or assumptions.
Don't Think You Know: Things can always be improved. Check and re-check your assumptions. Courtesy Goldratt Group and TOCICO Personal Conflict Logical Conflict Necessary Conditions Pre-Requisites Objectives Disharmony Undesirable Effects
(UDEs) Strategies and Tactics Define the “Targets”
(Desired Effect or DEs) of the system and the Strategies and Tactics to reach them, with out causing new UDEs Break the Generic/Root Conflict Define a new strategic direction for the system UDE UDE UDE UDE UDE UDE Future Reality Current Reality Consensus
Goal and Strategic Objectives UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE Start Program and Execute the Solution DE DE DE Diagram the Conflicts List the Un-Desired Effects (Symptoms or UDEs) of the system DE DE DE UDE UDE UDE Anticipate the obstacles to the Strategies and Tactics and assemble the Action Plan DE DE DE Verify that the Generic/Root Conflict is the cause of all/most problems (symptom or UDEs) Find the system Generic/Root Conflict TOC - System Improvement Strategies and Tactics Define the “Targets”
(Desired Effect or DEs) of the system and the Strategies and Tactics to reach them, with out causing new UDEs Break the Generic/Root Conflict Define a new strategic direction for the system UDE UDE UDE UDE UDE UDE Future Reality Current Reality Consensus
Goal and Strategic Objectives UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE UDE Start Program and Execute the Solution DE DE DE Diagram the Conflicts List the Un-Desired Effects (Symptoms or UDEs) of the system DE DE DE UDE UDE UDE Anticipate the obstacles to the Strategies and Tactics and assemble the Action Plan DE DE DE Verify that the Generic/Root Conflict is the cause of all/most problems (symptom or UDEs) Find the system Generic/Root Conflict TOC - System Improvement
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