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.
Friday, May 14, 2004
On Leverage -- At the 2000 TOC World conference (as well as in his most recent book, Necessary But Not Sufficient), Eli Goldratt suggested that there are two basic ways of thinking about improvement. The first can be related to Ben Franklin’s old saw, “A penny saved is a penny earned,” and that a lot of saved pennies can accumulate to a significant sum. The second goes back to Archimedes of ancient Greece, who said “Give me a place to stand and I can move the world,” referring to the multiplying power of a lever, and of a well-placed leverage point.
Anyone who’s worked with a shovel and a wheelbarrow knows the difference. To move a couple hundred pounds of whatever, one can use a shovel and a lot of effort to walk back and forth from the source to the desired location a couple dozen times, dropping and dribbling the material on the way. Alternatively, one can stand in one place, build up a good rhythm shoveling into a wheelbarrow, take advantage of the leverage of the handles and wheel it to where you want it in one trip.
So the question is, when one thinks about a continuous improvement, why does shoveling pennies come to mind rather than a well-leveraged movement of the world? Why do we settle for nickel-and-dime improvements spread across the organization rather than insist on truly significant results from our efforts?
It’s probably because we’ve grown up hearing Ben Franklin more often than Archimedes. It’s probably because most of us have been most comfortable dealing with pieces of our organizational systems rather than taking a system-wide view to find that powerful leverage point. We erroneously assume that big results require big efforts or risks. But as Archimedes suggests, a modest effort can lead to not so modest results.
And once we’ve levered that first big move, what is there to stop us from moving the lever to a new fulcrum point and doing it again. In this way, we can institute a true process of ongoing significant improvement.
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