If you’re looking for a way to increase your productivity, and most of us are, you can take some powerful inputs from the Theory of Constraints.
Every day, we all have to perform a number of tasks in different areas of our lives. Clearly, we can’t give equal attention to everything, so how can we prioritize? Prioritizing is something that many people struggle with. In this post we take an aspect from the Theory of Constraints and apply it in a very practical way to how we manage our time.
Accounting for time
In the same we that we have to “account” for money in our businesses, we have to “account” for time. Time is our most precious resource so we have to manage it with great care.
Unlike money, if we waste time we can never get it back.
The Theory of Constraints has a radically simple approach to accounting that contains no balance sheet “tricks”; instead it provides vital, real-time information on the actual money a company has available to produce its goods and services. It actually shifts the mindset towards focusing on generating more throughput as opposed to cutting costs. Most importantly, unlike other accounting methods, it considers time as part of the equation.
Let’s look at three main categories for ‘Throughput Accounting’ and these are:
Throughput – this is the pace at which a company generates cash through sales. It’s the vital flow that keeps us going and growing;
OE Operating Expense, i.e. the money the company spends to transform goods and services purchased into sales. They cover fixed costs (costs the company sustains here and now, regardless of economic results, like rent) and Investment, i.e. money spent to ensure medium to long-term success, like training. Why, you may wonder, is Investment part of Operating Expense? Because, quite simply, organizations and individuals are living systems, and like anything that is alive, if we don’t invest in growing beyond where we are today then we will barely survive, let alone flourish.
Inventory – all the raw material and services purchased that are necessary for producing (that are part of the product) the products and services the company intends to sell;
Categorize: the secret to success
How can we use these measurements to categorize tasks and address our time constraints?
Throughput (T) is all about our most important activities that generate units of our goal. If you earn your living then everything you do that is directly connected with generating income can be considered a ‘Throughput activity’. This is the highest priority. Producing, selling and business development go here. Let’s give it a color: orange.
Operating Expense (OE) means tasks that just have to be done to keep everything ticking over no matter what. These can include admin, cleaning and laundry if they are part of your schedule. Let’s make those tasks dark blue. The Investment part of your tasks can mean things like study, exercise and self-improvement. These can be light blue.
Inventory means tasks that are lowest priority. Not that they are not important. They are because they help us produce throughput, but they are less essential. This can include things like reading materials to keep up to date, dealing with emails, attending meetings, even travel if there’s some way to reduce that. So when you open an email that has interesting tips and advice in it, you don’t jump down the rabbit hole but save that reading for an INVENTORY time slot. Let’s make those tasks green. Depending on your commitments, your weekends might not necessarily contain any throughput activities.
Make a list of all the tasks you have to carry out throughout the week. Categorize them into Throughput, OE/Investment and INVENTORY and arrange them so that you give your best hours to your throughput tasks; organize the other tasks around them.
Remember to leave yourself some buffer time and don’t schedule every minute of your time. That’s a recipe for frustration because variation exists.
Now you can design a personal weekly schedule around these prioritized tasks. By colour coding the four time zones and dividing the days of your week up with just those four colours you will have an at-a-glance guide to how to prioritize your time.
REMEMBER: YOU ARE TRYING TO MAXIMIZE THROUGHPUT AND ALL THE OTHER ACTIVITIES NEED TO TAKE THAT FACT INTO ACCOUNT.
Here are some examples of daily tasks assigned to these categories:
THROUGHPUT:
- core work tasks (depending on your job)
- producing documents
- interacting with customers
- sales activities
- business development
FIXED COSTS:
- personal hygiene and eating meals
- grocery shopping
- paying bills
- admin
- exercise (Investment)
- self improvement (Investment)
- Family relations (Investment)
- Social relations (Investment)
- Giving to charity and volunteering (Investment)
INVENTORY:
- travel
- dealing with e-mails (unless your job is to respond to e-mails)
- reading materials to keep up to date
- attending meetings
A clearer picture and more focus
Even if you simply achieve a clearer picture of what your Throughput tasks are and keep those as your main focus for your best hours, you will have achieved a much more effective way of organizing your time no matter your time constraints. If you spend half a day working on this to obtain a better prioritization of your daily tasks it will be one of the best investments you make.
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About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management, founded by Dr. Domenico Lepore. She is co-author with Dr. Domenico Lepore and Dr. Giovanni Siepe of ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York. Angela’s new business novel+ website The Human Constraint looks at how Deming and theTheory of Constraints can create the organization of the future, based on collaboration, network and social innovation.
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