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Theory of Constraints (TOC) for CEO's
Transcript of Theory of Constraints (TOC) for CEO's
Courtesy Debra Smith, Eli Schragenheim and TOCICO
Organizational Conflicts are dealt with by creating Rules
Rules become Policies, Paradigms, Procedures, Beliefs, Culture, Experience and Know How of the Organization, and are institutionalized in its Methods, Measurements 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.
TOC FOR CEOs
What is my contribution?
What is my colleague's contribution?
Are we operating under conflicts?
Are there conflicts between responsibility and authority?
Are we doing things we no should no longer do (inertia)?
The Engines of Organizational Disharmony
Growing Pains and Aging