Evaporating Cloud

There are three ways of dealing with difference: domination, compromise, and integration. By domination only one side gets what it wants; by compromise neither side gets what it wants; by integration we find a way by which both sides may get what they wish.

-Mary Parker Follett Earlier in the chapter, as well as in Chapter 24, we learned how to surface assumptions and identify injections using the Cloud. Therefore, let us go directly to the bank case. The bankers used the Snowflake Approach to build their CRT and the Cloud they used was the summary Cloud (Fig. 25-22). The team examined the various necessary condition relationships, and when they reached the assumption that held D and D as being in contradiction with each other, they realized that they had found the key to the solution. The reason that the bank was unable to raise the pay levels of entry-level employees and raise the pay levels of existing employees was that the bank's budget for hiring, training, and raises couldn't be increased. Nobody at the bank had the authority to increase the total budget for hiring, training, and raises. However, the branch manager did have authority over the total budget. What would happen if they were able to shift money from hiring and training to salaries? If such a shift could enable the bank to pay new employees more, and also enable the bank to better reward existing employees, then the turnover would be reduced, and the volume (and thus the cost) of hiring and training would be reduced!

The injection the bank used to begin to develop its solution was, "The bank uses monies for hiring and initial training to raise the pay for entry position pay levels." We now use this initial injection as the starting point for the full solution that will be detailed in the FRT.

Future Reality Tree and Negative Branch Reservation

A human being fashions his consequences as surely as he fashions his goods or his dwelling. Nothing that he says, thinks or does is without consequences.

-Norman Cousins The FRT and the NBR are both processes that model the predicted effects of injections. The FRT is used to model the intended effects-the desired improvements-that comprise the full solution. FRTs typically contain several injections and many entities. They show the cause-and-effect model of how the injections enable the achievement of the objective of the Cloud and the opposite of (elimination of) the UDEs that were described in the CRT. The NBR is used to show how an injection would lead to undesired consequences, and then modify the idea (by modifying an injection or adding additional injections) to the degree that predicted undesirable consequences would be prevented. The guideline is to build the FRT first, and then use the NBR process to modify and solidify the solution to ensure that it is win-win-win.

The steps to construct an FRT and NBR are shown in Table 25-5.

The FRT (inclusive of the resolved NBRs) of the bank is shown in Fig. 25-30. As with the CRT, when you examine the bank's FRT, I have no doubt you will identify entities that could use more explanation and causal connections that are flawed. Moreover, I have no doubt that if you had been with the team that constructed the tree, your reservations would have helped them to create a "more perfect FRT." Nevertheless, you are looking at real work done by real people. The results spoke for themselves. This analysis was completed 15 years ago. The bank implemented the injections. Employee turnover dropped like a stone, customer service improved, and the bank grew. A decade later, tellers and managers alike greeted customers by name, and the bank enjoyed the loyalty of its customers and employees.

TABLE 25-5 Constructing an FRT and NBR Unfortunately, a few years ago the bank ended up being acquired by a larger bank, and then again by an even larger bank, and the policies and procedures of the conglomerates were installed. Neither tellers nor managers know the customers, and rarely does one see a smile in the bank. Customer and employee turnover is back to the levels it experienced at the time of the original analysis.

The fish stinks from the head.

-Yiddish proverb FIGURE 25-30 Bank FRT.

How to Cause the Change

A thought which does not result in an action is nothing much, and an action which does not proceed from a thought is nothing at all.

-Georges Bernanos Three TOC TP are used to answer the third question of change, How to Cause the Change? With the PRT, we identify the obstacles that make implementation of the injections difficult and create a logical map of Intermediate Objectives (IOs) that will overcome the obstacles. TRT are used when it is necessary to define the specific, detailed actions that will be taken in order to achieve a given objective. Finally, the S&T tree is used to integrate the output of all of the TP into a synchronized whole that fosters communication and synchronization necessary for the successful implementation of major initiatives.

Prerequisite Tree

Obstacles don't have to stop you. If you run into a wall, don't turn around and give up. Figure out how to climb it, go through it, or work around it.

-Michael Jordan The PRT17 takes advantage of the same type of "necessity" logic approach as the EC. With the EC, we are modeling a set of necessary conditions that are thought to exist in the current reality of a conflict. With the PRT, we are building the necessary conditions to create a logical roadmap to move from the current situation to the desired future. We will use Fig. 25-15 (which was used previously in the EC section of this chapter) to highlight the use of the logic. In both cases (Cloud and PRT), B cannot be achieved unless A is in place because of an aspect of the current reality that exists. When we are using the EC, we call this aspect of current reality an assumption. When we are using the PRT, we call this aspect of current reality an obstacle. When we use the EC, we begin with the entities "in the boxes" (A, B, C, D, and D), and then surface the assumptions. When we are using the PRT, we begin with the obstacles, and then define the entities "in the boxes" (intermediate objectives).

In Chapter 24, you will find detailed instructions for creating a PRT. Here are the basic steps: 1. For each injection, list the major obstacles to achieving it. An obstacle is an entity that exists in the current reality, which, due to the fact that it exists, prevents an injection from being reality.

2. For each obstacle, define an IO-an entity that, once implemented, causes the obstacle to be overcome. An obstacle can be overcome by eliminating the entity or by finding a way around the entity (the entity would still exist; it would simply no longer be an obstacle to achieving the injection).

3. Using necessary condition logic, map the order in which the IOs must be implemented.18

The Bank's Prerequisite Tree

The bank identified six injections in its FRT: TABLE 25-6 Obstacles and Intermediate Objectives for the I/O Map and PRT The bank uses monies from hiring and initial training to raise the pay for entry-position pay levels.

Personnel develops a competitive pay package for workers.

The bank provides workers with advanced training.

The bank conducts exit interviews to determine reasons for turnover.

Personnel uses the bank's best workers to train new workers.

Top management recognizes the difference between turnover and growth.

Table 25-6 illustrates the obstacles and injections that the bank developed for the injection, "Personnel develops a competitive pay package for workers."

The PRT for the injection is illustrated in Fig. 25-31.

A few things to note: 1. It is usually easier to build the PRTs by starting with the most ominous injections (the injections that seem most difficult to achieve). By doing so, you will typically address the "easier" injections in the process, and you will avoid multiple versions of the same tree.

2. Most of the intermediate objectives and injections are verbalized as entities rather than actions. An objective, whether it is an intermediate objective or a high-level injection, is a condition to be achieved, and an action is something that is done to achieve an objective. The place where we would expect to see IOs written more in the form of actions would be at the "bottom" of the tree; such IOs do not have other IOs pointing to them. At that level, we generally "know what to do," and the initial obstacles to be overcome are relatively minor. We will see actions in the TRT and as in tactics in the S&T.

3. Each arrow represents the obstacle that exists which is preventing the injection from being achieved. If an IO is pointing to another IO (e.g., 22 pointing to 23), the obstacle (in the arrow that connects them) is also preventing the IO that is pointed to from being achieved.

4. Verify that each obstacle is, in fact, an entity that exists in the current reality of the system. If it does not, it is an imagined obstacle, not a real obstacle, so there is no need to implement an IO to overcome it.

FIGURE 25-31 Bank PRT for injection, "a competitive pay package for workers is in place."

5. Validate the obstacle causality-is the existence of the entity that is claimed to be the obstacle really an obstacle to the achievement of the injection or the IO? If it is not, then there is no reason to implement an IO to overcome it.

6. Verify the IO causality-will the IO really overcome the obstacle and open the door to implementation of the higher IO or injection to which it is pointing? If not, you need to select a different IO.

As the PRTs are developed for each injection, identify any necessary condition relationships that exist among various IOs or injections. This will help you integrate the implementation, rather than simply having a collection of injections to implement. When the bank added to the PRT those IOs it defined to achieve the injection, "The bank conducts exit interviews to determine reasons for turnover," the PRT expanded as shown in Fig. 25-32.

The full PRT, as the bank team wrote it, is illustrated in Appendix E of this chapter found on the McGraw-Hill website: http://www.mhprofessional.com/TOCHandbook.

Transition Tree

Nothing happens until something moves.

-Albert Einstein We finally reach the place where the rubber meets the road-it's time for action! Some injections and IOs are "no-brainers" to implement. There are others that you know intuitively are risky unless you plan each step in a highly detailed, even choreographed, fashion. For instance, conducting buy-in meetings with other stakeholders in the organization, conducting important sales meetings with buyers or negotiation meetings with suppliers all fall under the category of actions that should be planned meticulously. This is the function of the TRT.

The TRT provides a way to construct an intended action plan (a sequence of actions to be taken) so that the need for each action, the predicted effects of each action, and the appropriate conditions that need to be in place to trigger an action to be taken (and thus the logic of the sequence itself) are all clear. The TRT is useful for planning an important activity, but equally important for monitoring reality during the execution of the plan, so that that we take actions that are needed when they are needed (when the action-appropriate conditions are present), we don't take actions that aren't needed, and we know and are able to pinpoint exactly what and why to modify if reality unfolds differently than the way we had planned. If this seems to be similar to the approach a scientist would take when designing and then executing an experiment, then you have caught on quite nicely!

FIGURE 25-32 Bank PRT expanded for injection, "a competitive pay package for workers is in place."

Never mistake motion for action.

-Ernest Hemingway The basic structure of a TRT is illustrated in Fig. 25-33.19 The entities in the tree and the structure of the tree are based on the following concepts: 1. There is a need to take an action.

2. The fact that an objective20 is not yet achieved and will not be reached without additional action means that an action is necessary. In other words, action must be taken because there is some obstacle still blocking the way, and human intervention is required to remove it. By articulating the need for each action, we have an opportunity to check before taking action to see that the need still exists. (If the need for the action goes away, there is no need to take the action!) FIGURE 25-33 Basic structure of a TRT.

3. The conditions are appropriate for taking the action. In his July 2001 article, "Transition Tree-A Review," Rami Goldratt articulates what makes conditions appropriate for taking the next action.

a. I have the ability to take the next action, and b. The next action will not lead to serious negative effects.

The sequence of actions is due to the need for the earlier action(s) to cause the appropriate conditions for latter action(s) to be taken.

Let us take a simple example. You are standing at a busy intersection, and the nice restaurant where you are meeting your friend for lunch is across the street. The fact that you are standing on the opposite side of the street from the restaurant means that there is a need for you to take an action, as you must get to the other side of the street. Your first action is to look at the traffic light. The green "OK to cross" signal is illuminated, and traffic has stopped in order to allow pedestrians to cross. The condition is appropriate for you to take your "walk across the street" action, so you confidently do so. On the other hand, if the red "Don't Cross" signal were flashing, you would know that if you started to walk into the intersection, a car might hit you. In other words, the conditions would have not yet been appropriate, and you would wait a few moments until the light changed in your favor.

The steps to construct a TRT are: 1. Identify the objective and verbalize it as an entity. The objective of a TRT can be an intermediate objective or an injection from a PRT or another objective.

2. Write all of the actions you think should be taken, in the order you expect the actions should be executed, and construct the "spine" of the TRT-the standard protocol is that the first action to take is at the bottom of the tree, and the last is at the top. The final action should be pointing to the objective. (See actions 1, 2, and 3, and the objective in Fig. 25-33.) If you cannot think of any actions, it means that the obstacles are still too big for your intuition to guide you to the actions to take. Go back to the PRT and identify the obstacles and IOs to a lower level-to the point where you have identified an IO that your intuition tells you, "We can do this, and I've already got some actions in mind."

3. For each action, verbalize its associated entity cluster.

a. Verbalize the appropriate conditions for taking the next action. These are the effects of the action (and are thus the entity to which the action is pointing).

i. What negative effects will be caused by the next action, unless I take this action? Verbalize that they will not be created.

ii. What new ability do you have after taking the action that brings you closer to the objective and enables you to take the next action? Verbalize the new ability.

b. Verbalize the need entity.

i. What is the need to take this action?

ii. Why is this action important? In order to . . .

iii. Why take this action? In order to . . .

c. Verbalize the working assumption entity.

i. Why does the action to take satisfy the need?

ii. What do you assume when you claim that this action satisfies this need?

4. Check the validity of the causality that links each cluster.

a. As verbalized, are the need, appropriate conditions, and working assumption that point into an action to take sufficient to make the action specified the right action to be taken?

b. For any appropriate conditions that are intangible or not directly verifiable, identify and map the effects that would be verifiable indicators ("the proof") that the appropriate condition is in place, as additional effects of the action.

5. Check for negative branches and make the appropriate modifications (modify actions or add new actions in order to prevent the undesired consequences).

In the process of creating a TRT, you may find that you initially indentified actions that really are not necessary. You may also find that you need to add actions that you had not initially thought of in order to close "sufficiency gaps." You may also find that the sequence you initially had in mind needs some rearranging. How wonderful that you find these things out on paper in the planning stage instead of in reality! Consider how much time and effort you are saving as a result!

I will provide an example of a TRT in the next section of this chapter, to illustrate how a TRT has been used by the sales force of a company that is using TOC to build, capitalize, and sustain a decisive competitive edge (DCE).

If anything is certain, it is that change is certain. The world we are planning for today will not exist in this form tomorrow.

-Philip Crosby

The Strategy & Tactic Tree

"The people may be made to follow a path of action, but they may not be made to understand it."