Recently in a conversation with a friend the topic turned to Eli Goldratt. This friend is a professor in a business school and has a pulse on the reputation of business thinkers. His perspective was that Eli Goldratt’s work is powerful but there is a reputation out there that followers of the Theory of Constraints (TOC) are like a “cult”. This can turn people off. To a dyed in the wool believer like me who believes in the vital importance of Eli’s work this charge of being “cult like” resonates. Eli’s thinking is too important, too valuable and too powerful, it can seem overwhelming. At the same time this reputation is real, it may be incorrect or a well deserved epithet; but it is a real barrier to Eli’s ideas having their full impact on the world.
Business is the most practical of human endeavors. Nothing works except if it works. Not really a space for speculations about metaphysics and philosophy. But surprisingly we love philosophy and metaphysics in business. We look to the business leaders not just for their management abilities, their ability to make money and be successful, but also as special people with insight into what makes “success” possible. They are like great athletes, artists or scientists worthy of listening to and understanding. Steve Jobs, Warren Buffet, Henry Ford, Bill Gates, Taichi Ohno are all highly successful individuals but also have something to offer beyond the particular knowledge of an industry, of finance, of technology or mastery of production. They offer us a set of beliefs that have worked for them. Beliefs that have proven their effectiveness. We are inclined to listen and believe because we are convinced that these “beliefs”, “philosophy”, “metaphysics” are important. Maybe even more important than what we can learn from their specific decisions and actions.
Eli Goldratt has enormous practical contributions to business knowledge. He did more than anyone to develop tools and techniques that deliver “significant” improvements in performance. It is a matter of accepted fact that a Drum-Buffer-Rope implementation in a factory can within a matter of months improve throughput conservatively by 15-25%. It is a matter of accepted fact that a Critical Chain implementation in a project environment will deliver projects 30-40% faster while increasing throughput of projects. It is a matter of accepted fact that a Supply Chain or Retail implementation will result in 15-20% lower inventory with improved availability and wider range, improving store sales rapidly. These are amazing results backed by scores of testimonials. One consequence is that there is a band of believers who have seen these results and share the deep conviction that here is an approach that works and works consistently. No surprise that these people can appear “cult like” when they approach the wider world with an assumption that performance can be improved in a predictable way by margins way out of the noise. This is an uncommon belief and without the context of the personal experience one that anyone including myself would find “weird”.
Eli’s success in coming up with these diverse solutions that work so well forces us to ask the question – how did he do it? And he answered this question as well in his book The Choice. Here he offered a set of beliefs that allowed him to overcome obstacles to seeing things that others were not able to see. He called the gestalt of these a belief inInherent Simplicity (please watch the linked video). Now we are deeper into the “cult like” world. Not only do people who have experienced the results of Eli’s work have unreasonable expectations of what is possible but they also have an underlying set of beliefs that are also not reasonable. What are these beliefs?
Inherent Simplicity: The belief that
- Reality is simple not complex
- Any situation can be improved
- People are good (read my post on this topic)
- Conflicts do not exist in reality.
Seems like new age blah blah. But each of these is reflected in the solutions of Theory of Constraints. From my personal experience coming up with a new solution that applies Eli’s thinking requires one to overcome obstacles and these specific beliefs turn out to be extremely valuable in avoiding the pitfalls and obstacles that would block the thinking.
For example Eli’s thinking has been applied extensively to solving problems in Maintenance, Repair and Overhaul of assets – airplanes, ships, power plants, refineries etc. In developing the solutions for these environments one is faced with enormous complexity. These are typically very difficult to manage environments with high levels of uncertainty, no predetermined routing for the work, emergent problems and high variability in work standards. They are blue collar environments with continuous problem solving and improvisation. Very different to managing a production facility but they look and feel like a production facility. These environments are bedeviled by poor performance – delays, budget overruns, fire fighting, high levels of stress. The TOC solution to these is simple (watch this testimonial). And it results in tremendous performance improvements.
What does it mean to say that a complex situation can be simple. Here are three consequences:
1. The arrows of explanation converge – normally if one starts to analyze a complex situation the tendency is to have more and more causal factors enter the picture creating a complex spaghetti of causal relationships. With stamina, clear thinking to avoid “chupchiks”- small irrelevant distractions, we actually find that the explanation arrows converge.
2. Underlying the myriads of issues and challenges that are faced by an organization there is a conflict. This conflict faced by the organization is felt at every level in the organization. From the individual to a department to the entire organization.
3. The same problems and challenges have the same underlying analysis and the same solution. Critical Chain, Drum-Buffer-Rope are successfully applied across many different industries. The surprising thing is that in all of these environments the specifics of the situation are not that critical to the understanding of the generic problem and solution. There is tailoring to be done but around a basic well defined set of rules.
Here we again encounter the “weirdness” or “cult like” set of views. These are unreasonable things, they should not work. In most of our life we accept that we will not be able to find simplicity. We trust our social skills to navigate conflicts and uncertainty, to find reasonable compromises. We teach our kids to learn that the world is “not fair”. That they have to learn to compromise to get along in life. This is an unreasonable expectation of the world that it will yield to simplicity, but it does. Even in the sciences physicists (Feynman, Wigner, Gell Mann) have wondered on this unreasonable expectation of finding a simple explanation, but it works.
The final “cult” like aspect of Eli’s work is that in confronting a language imbued with meaning he created a new “language game“. A set of terms that are not meaningful except if one enters the world of Theory of Constraints that Eli created. This language game has terms like – Full Kit, Bad Multi-tasking, Constraints, Subordination, Exploitation, Negative branch, Clarity Reservation, Value, Limitation, Mafia offer, Drum, Critical Chain and on and on. These are terms that create efficiency of communication of meaning but this dense communication is at the cost of having to build a whole set of shared assumptions. This language game both separates TOC from the “normal” set of assumptions by making sharp definitions where common sense and intuition subverted accepted conventional assumptions and allows a community and sub-culture to be created that share a common set of words that have specific meanings.
How do we proceed from here? It is no surprise that TOC has the reputation of a “cult” and maybe well deserved. But the vitality of the underlying ideas is undeniable. Will these ideas lose their rightful place because of this inherent difficulty? That is the challenge facing us. On this anniversary of Eli’s death I can only reiterate the thoughts I had when he passed away
“I will always cherish the opportunities I got to listen and learn from Eli. It sometimes felt that every meeting with him planted seeds of ideas that continued to grow and influence my thinking for a long time. I am fortunate to have interacted with him in this way. The focus and determination he brought to an otherwise impossible ambition to change this world was deeply inspiring. To aim so high and then pursue the goal with such practical and deliberate steps is humbling to watch. It cannot help but leave one committed to continue in the footprints he has left us.”
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