This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Monday, December 09, 2002
• Is Management Possible? -- Another piece from Business 2.0. (I'm getting so much good stuff from their web site, I may actually subscribe to the magazine.) In it Thomas Stewart (the new editor of Harvard Business Review) discusses something very familiar to those of us who promote Theory of Constraints-based solutions.
Unreliability was the management problem of the 20th century, and we more or less licked it. Uncertainty is the problem of the 21st. It can't be wrestled into submission... Uncertainty must be acknowledged, not combated; respected, not repressed; embodied, not rejected.
Respect for uncertainty, and mechanisms for managing for it, are at the core of every logistical solution associated with TOC. The "lean," but not anorexic, TOC approach to Production Management -- Drum-Buffer-Rope allows for "protective capacity" in non-constraint resources -- capacity useful to deal with the certain-to-happen uncertain outcomes of run-ins with Murphy's Law, be they breakdowns, or unexpected hot orders.
Project Management is all about turning uncertain efforts into certain outcomes of time, cost, and scope. Without trying to fool one's self into unrealistic expectations of unnecessary intermediate milestones, Critical Chain schedules start with the explicit recognition of uncertainty and risk in its use of range estimates for tasks, and their translation to buffers to protect what's important -- the project's promises.
And in supply chain situations, where distribution networks are subject to uncertainty in demand (one of my favorite oxymorons is the title of an acquaintance, "Demand Manager"), the usual 20th century response is to try to deny it and instead strive for the equally oxymoronic "more accurate forecast." The TOC approach, based on demand-pull replenishment avoids tempting uncertainty by avoiding premature distribution to where product may not really be needed.
Stewart continues...
Uncertainty challenges management to become one of the humanities. Companies won't succeed if people cannot improvise, ad lib, make do, and override procedures. Nor will they survive if they're out of control. Becoming both resilient and consistent will take more than decentralization or programs to empower people.
Again, this aspect of Stewart's prescription is supported by TOC through the Thinking Processes. Empowerment comes from knowledge, combined with the ability to analyze that knowledge for questionable assumptions. The ability to predict with "good enough" logic the outcome of actions may not result in perfection of prediction (we are talking about uncertainty here), but should be able to lay a foundation of expectations, so that, if impacted by the unknown unknowables, deviations can be recognized sooner rather than later.
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