Four Pillars of Theory of Constraints (TOC)

The four pillars or beliefs of Theory of Constraints (TOC) Management Philosophy are Inherent simplicity, inherent harmony, the inherent goodness of people and inherent potential.

Before we move ahead, let’s address the question which might be bothering you- why do we need a belief system?

A belief or value system is a structure, which gives support when it is needed the most i.e when the situation seems difficult and we feel stuck.

When we are critically examining the system, there are chances that we can slip in our thinking process and might tend to give up by either — assuming things are complex, or assuming nothing can be done about the conflict or assuming some person is the reason for the issues or assuming the system no longer has headroom for improvement.

The belief system of TOC is put in a strucutre to prevent such slip ups in the thinking process.

Inherent Simplicity:

Dr. Eli Goldratt introduced the concept of inherent simplicity in his book The Choice, he wrote: “the key for thinking like a true scientist is the acceptance that any real-life situation, no matter how complex it initially looks, is actually, once understood, embarrassingly simple” (Goldratt, 2009, 9).

i.e when we can understand the underlying cause and effect of the system, then the system reveals itself and becomes exceedingly simple.

On this context: quote by Sir Isaac Newton

‘When you dig deeper, you will find out that nature is simple and harmonious with itself’

Here, digging deeper means understanding the cause and effect relationship of the observed effect. And then, going one step further to understand the cause of the earlier identified “cause”(here, the effect of the new unearthed cause).

‘Scientific thinking’ is to always look for deeper causes of the observed effect/effects and the belief that there are only a few causes, which are sufficient to explain the multiple observed effects.

Eg. Scientists are looking for “grand unified theory”, which can explain the universe/nature.

If we apply the above quote to the concept of inherent simplicity, then it can be stated, “situations/systems may seem complex, but just like nature, there is an inherent simplicity in them.

Let’s take an example to understand the above statement in detail:

Let’s take two systems: System A and System B. System ‘A’ has four entities. System ‘B’ has 6 entities and multiples arrows, which explain the relationship between the entities.

If we want to explain the system, then we need to write only four statements for system A. However, for system B, we would have to write about six statements for entities and eight statements to explain the relationship behind the arrows. Thus, on the dimension of describing the systems, ‘B’ seems complex and ‘A’ seems simple.

Further, if we would like to bring a change in the state of systems, then for system A (having a degree of freedom = 4), we need to touch all four points. However, in the case of system B (having a degree of freedom =1), we need to touch just a single point.

So for the description of a system, system A is simple and for bringing change in the state of the system, system B is simple.

Thus, system A & B are both simple and complex at the same moment (but on different dimensions)

As managers (change agents), we are always looking for ways to change the state of the system and are not bothered by how many pages are required to explain/describe the system.

Wearing the ‘inherent simplicity’ belief upon our sleeves forces us to think hard to comprehend the underlying cause and effect of the system and not get bogged down by the enormity of the system.

And once we get to the root cause/causes governing the system. It gets us in a position to touch minimum points to bring out the desired change in the state of the system. And if you have identified a leverage point, then you can bring huge change with a little effort.

Inherent Harmony:

In Bhagavat Gita(Hindu scripture in Sanskrit that is part of the Hindu epic Mahabharata) one of the learning is “Good for one is good for all”. I have spent numerous days pondering the deeper meaning of this single line. I had so many everyday examples, where it appeared that ‘good for one’ was not at all ‘good for all’. The more I thought about it, the more I became cynical about the concept and thought that it is not practical at all.

In TOC management philosophy: one of the beliefs is “inherent harmony”. It goes like “there is an inherent harmony in every relationship, but not every relationship is harmonious”. Inherent harmony signifies that a win-win relationship is possible in every relationship and the TOC thinking process offers a clear path to reach that desirable state.

It states that ‘a state’, where a win for one means a loss for others is not the state one should start with. The right starting point is to think (real hard work) about what the other person really needs out of the relationship. Once the other’s real need is identified, then the next step is to establish a common ground where two parties can achieve the win for themselves. Thus, by applying TOC, “Good for one is good for all” state seems practical as well as achievable.

Inherent goodness of people:

We are designed to survive in the wild and our basic nature to attribute a cause to the problem/event. This served the purpose of actively understanding our environment and keeping one prepared for the changes being thrown at you.

Dr. Daniel Kahneman in his book ‘Thinking Fast and Slow’, stated, ‘The system of finding causality to a problem/event works on auto mode”( which he termed as system 1 of thinking ).

He stated that at times we tend to err on the part of assigning cause to an effect because of certain biases in our thinking process; eg- if two events have happened in sequence, then we tend to assign the first one as the cause of the second. He also stated that we seek coherence in our environment (an effect has to have a cause) and also suffer for association bias(The person who is associated with the event seems more like the cause of the event). All of these leads to the most common error in thinking — attributing the problem to a person who is doing the job.

How often you have heard in a meeting that if procurement domain has some issues? The procurement manager is most likely to get blamed for the problem, or warehouse is not able to perform as per expectation, then we tend to blame it on the warehouse manager. And the most common way out of this problem is to change the person in charge. The irony in such a situation is that the same problem resurfaces again even after changing the person.

The belief in the inherent goodness of people, while analyzing the system prohibits us to accept the answer that a person is responsible for the issue. That way it helps one to continue diving deeper till he/she gets to a systemic issue for the problem.

Inherent Potential:

If a company is doing reasonably well. Will it ever invest our time in the search to find the constraints of the system and look for further improvement? The answer is most likely a No. Why would that happen? If you study the past of the company, the same company might have taken hundreds of improvement projects for improving customer service, R&D, operations, supply chain, logistics, and product while growing up and reaching the position it is currently in.

Jim Collins in his book ‘Good to Great’, states the same issue that ‘good’ is the enemy of ‘great’ i.e when you reach a comfortable situation your efforts for striving hard goes significantly down and one gets stuck to a position of ‘good’.

The underlying assumption not taking effort, not striving forward is ‘ there is hardly any headroom for growth’. The belief in the inherent potential of system- ‘No matter what the situation is, the system can be significantly improved’ forces us to keep identifying the next constraint for the system and prevent inertia from becoming the constraint for the system.

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