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Frank Patrick's Focused Performance Business Blog
This Focused Performance Weblog started life as a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective, but is in the process of evolving towards primary content on interactive and mobile marketing. Think of it as about Focusing marketing messages for enhanced Performance. If you are on an archive page, current postings are found here.

Wednesday, July 23, 2003

"Trust. You can take it to the bank." -- That's what Britt had to say regarding another example of caveat venditor relationships. The one to which he's referring is from Jason Kottke about a very trusting coffee and donut guy.

Going beyond the issue of trust, and slipping into a "systems management" vein, the coffee guy in the piece understands the importance of subordinating details (even relatively non-trivial details like getting paid per transaction) to the maximization of throughput. And he understands this probably because he's so close to the full system of his business -- not insulated from what's really important by distractions of artificial departmental, or functional, or process borders and measures. He knows that the more people he serves, even with an accepted cost risk of getting stiffed by the occasional cheapskate, the better off his top line, and therefore his bottom line, will be.

In TOC terms, he has identified the constraint as his ability to serve more people. He's exploiting and elevating that constraint by removing himself from the process of making change and instead focusing more of his time on serving. He's subordinating assurance of a per-transaction profit to the strategy of speed and throughput, that in the end will result in higher total system profits. A beautiful, intuitive application of constraint management, as introduced in Goldratt's classic book, The Goal.

This idea of maximizing throughput of the appropriate system is central to all applications of effective constraint management. Take project management for an example. If one is managing a project, and if that project is worth doing (a big assumption, by the way, in many situations), the benefit at its completion and its expeditious attainment should far outweigh concerns about cost along the way, unless, of course that cost is the lost benefits from impacts on other projects. Then the throughput of the larger system -- the portfolio pipeline -- is the right place to judge actions.

But that's another story. Trust me.

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