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.
Tuesday, September 28, 2004
Multi-Project Management and Organizational Effectiveness IX -- Managing the Present and the Future III -- Next year - “How much can we work on?” - Current and strategic constraints. In the previous section, the stabilization of the system around the organization’s current constraint was described. That current constraint is the result of past actions and staffing levels; it may not be an ideal leverage point for maximum strategic benefit. Once the system is stable, the organization can manage itself proactively by designing a more appropriate system based on what one might call a “strategic constraint.”
An appropriate constraining resource would be one that is commonly and heavily used across a range of anticipated projects, but is also hard to augment. If it’s easy to get more of it by acquiring more people or improving processes, then it’s probably worth doing so to easily grow organizational capacity, assuming the protective capacity around it is also easily grown. If hard to augment, it becomes a matter of offloading and/or improving processes to grow capacity. A constraint that is hard to get more of while commonly and heavily required is a natural candidate for a long-term constraint against which to manage the organization.
Additionally, such hard-to-grow resources are often critical to the organization’s competitiveness. For example, a system architect who know the ins and outs of the firm’s software products is far harder to replace, and is inherently more important to its capacity than some “plain vanilla” developer skill that can be augmented with contractors. If there is some other, easily elevated constraint in place, it behooves the organization to develop plans to grow it’s capacity along with any others who might be limiting what can be gotten through the expert. Understanding this relationship also highlights and justifies the need to grow that expert skill as well, perhaps through shared work or by determining what it is in the work usually performed by the expert that really needs the expertise.
An interesting offshoot of effective constraint management is that if one considers a limiting factor -- a constraint -- to be a weakness, then the system’s strength -- the resource and skill that defines its core competency -- should probably be that weakness. After all, you don’t want any other aspect of the organizational system to limit the ability to maximize the benefit of that strength.
Developing such a strategy for growth that either grows resources around an appropriate constraint while increasing its capabilities, or provides a clear path to grow the necessary capacities to move the constraint to somewhere more appropriate provides a smooth transition from one level of performance to the next.
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