Celebrating the life of Dr. Eliyahu Goldratt, the Israeli physicist whose Theory of Constraints continuously leads to breakthroughs.
Can we choose our own destiny?
Today is the birthday of Dr. Eliyahu Goldratt. We are celebrating by sharing our understanding of his formidable Theory of Constraints (TOC). TOC is a majestic method for expressing self-determination. It teaches us that if we have the courage to identify what’s limiting us in our perceptions and our thinking, we can decide to bring about significant and positive change.
The prevailing style of management is limited by the way companies are fragmented into silos with a measurement system that focuses on cost. Dr. W. Edwards Deming introduced the idea of a new economics of cooperation and transformation to achieve whole system optimization because organizations are inherently systems. As pioneers in a systemic approach to management, we realized that Goldratt’s work provides a practical means for organizations to achieve whole system optimization. TOC provides the thinking method and operational protocols to make this vision reality.
Science for organizations
The word genius is much abused, but in the case of Dr. Goldratt it is appropriate. Born into an illustrious family of scholars and educators, and educated as a physicist, it was natural for Goldratt to seek answers to fundamental questions. This aspect is often overlooked. Indeed, many people are stuck in thinking that TOC is a technique, like Lean or Six Sigma, and is limited to manufacturing. We are keen to help overcome this misunderstanding as we’ve had the privilege of working with all aspects of TOC since 1996. (See our post ‘What is the theory of Constraints REALLY about?’). To do so, we had to create a team of physicists, mathematicians, engineers and philosophers to merge Deming’s Theory of Profound Knowledge with the Theory of Constraints to achieve extraordinary results. We continue to develop this approach.
Goldratt chose to present his breakthroughs in separate books and we encourage everyone to read them. All of Goldratt’s books underpin our systemic methodology and we have written some min reviews of them as a guide: here are our mini reviews of these books. It was not until later in Goldratt’s life that he worked on a book that would bring the various aspects of TOC together and where he would talk about organizations as a whole. He was encouraged to do this by his publisher, Larry Gadd, who published our Founder Dr. Domenico Lepore’s first book ‘Deming and Goldratt: The Decalogue’. Goldratt’s last book would have helped position TOC where it belongs, as science for organizations, but sadly he was unable to complete it.
Systemic thinking
Goldratt developed a series of breakthroughs to achieve unrivalled results in Production, Logistics, Distribution, R&D, Marketing, and Sales. How was he able to do this? Because he had a method. He has shared this method with the world and it is a great contribution to unleashing human potential. Ultimately, TOC is a linguistic framework to create breakthrough solutions.
We need to think systemically because we live in an age of complexity. From Systems Science, we learn that our reality is dominated by unprecedented interdependencies and interconnections. Change happens fast and uncertainty is prevalent. The world we live in is non-linear (from almost identical inputs, completely different outputs can emerge) and therefore traditional, linear thinking is no longer sufficient.
The Theory of Constraints Thinking Processes are designed to teach people how to think systemically and gain greater flexibility, resilience and sustainability in a win-win way. They help to overcome obsolete mental models and assumptions so we can innovate with thought-through solutions. We can use them to embrace the exponential thinking that is consistent with our world of networks and interconnection.
Their most important feature is how they enable us to blend reasoning with the power of emotions to provide:
- a clearer picture of what we experience as our current reality
- build a realistic path to overcome what is limiting us so we can create a more desirable future reality.
Extraordinary results
Why do we believe that TOC is a method for breakthroughs? It’s because this has been our experience since we first started helping companies to embrace it. It requires courage and determination, but the results of these collaborations have always been significant and, in some cases, exponential.
Some examples of our results include:
- helping a metal foundry stuck at 80,000 tons to reach their goal of 100,000 tons per year within six months;
- guiding a team of scientists to create a seemingly impossible innovation in the graphite industry that became an award-winning patent;
- creating the process for a New York Holding Company that led to the fastest ever recorded acquisition by a Special Purposes Acquisition Company and successfully raising $600,000,000;
- helping a variety of manufacturing and service organizations to multiply their offering in every segment at a price that was profitable yet not disruptive;
- helping relevant players in the steel industry in North America to shrink the entire process of supply to the end user from over ten to roughly two weeks.
- helping a junior gold mine company with its ambitious goal to transition from prospecting to going into production in an area where no one had succeeded in mining in the previous 40 years. This was achieved in less than one year;
- helping a failing American multinational to achieve measurable results in increased productivity, unleashing of untapped capacity, award-winning patents and a stock price that increased in value seven-fold
- enabling a young company to start on a path of exponential growth by creating a new industry for Oil & Gas to better assist sustainable practices while increasing production levels at lower cost.
The sky is not the limit
Dr. Goldratt was born in the Hebrew month of Nissan, the month of Passover and miracles. It is not surprising that he used the phrase “the sky is not the limit”, an assertion that had been uttered previously by the genius Chassidic scholar and leader, Rav Menachem Mendel Schneerson. This reminds us that Dr. Goldratt’s unique contribution to mankind stems not just from his scientific education but also from millennia of Talmudic investigation, aimed at taking perceived conflicts to a higher plane of reasoning to find solutions. This was revealed in a conversation between Domenico Lepore and Goldratt when Domenico asked for advice on how he could deepen his understanding of TOC and Goldratt replied “Study the Talmud.”
The message for all of us is one of extreme hope. We can be limited by what we perceive to be our reality. We can also dream big and develop bold and breakthrough solutions that are to the benefit of all the stakeholders. Everybody wins. ( See our book from Routledge ‘The Human Constraint’)
The choice is yours
We can honor Dr. Goldratt and his legacy by taking on the challenge of shifting our thinking. Change is happening at a pace we have never before lived through and technology will only accelerate that change. More than ever, we need robust human thinking to direct sustainable choices where everyone can benefit. This is the only sustainable way ahead. We invite you to read Dr. Goldratt’s work and consider a new way of thinking, managing and operating so everyone can win.
To find out more about ten guided steps to a systemic leap in performance for your company, contact Angela Montgomery at: intelligentmanagement@sechel.ws
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Intelligent Management works with decision makers with the authority and responsibility to make meaningful change to optimize your company for the digital age. We have helped dozens of organizations to adopt a systemic approach to manage complexity and radically improve performance and growth for over 25 years through our Decalogue management methodology. The Network of Projects organization design we developed is supported by our Ess3ntial software for multi-project finite scheduling based on the Critical Chain algorithm.
See our latest books: The Human Constraint from Routledge; From Silos to Networks: A New Kind of Science for Management from Springer; Moving the Chains: An Operational Solution for Embracing Complexity in the Digital Age by our Founder Dr. Domenico Lepore, and ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York by Dr. Domenico Lepore, Dr. Angela Montgomery and Dr. Giovanni Siepe.
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