FIGURE 25-37 NBR for "managers and co-workers believe idleness is bad."

Use of the Transition Tree

When a company has a DCE, it is solving a significant need of its market to the degree that none of its major competitors can. A customer need that is not addressed by any of the significant suppliers in a given market is not something that the suppliers tend to emphasize in the sales process. It is also not something the customers in the market emphasize, given that the suppliers do not address it. This means that in order for a company to really capitalize on a DCE, it must make some fundamental changes to its sales process-changes that will highlight the need and the company's unique ability to address it.

The S&T for a company whose DCE is reliability (of due dates) provides the instructions for a core meeting between the salespeople and potential clients who would appreciate the company's offer of reliability. The TRT is used to design (choreograph) that meeting. Step 5.123.2 in one such tree is provided in Table 25-8 (See Appendix F): TABLE 25-8 Step 5.123.2 Mastering the Core.

FIGURE 25-38 TRT cluster from reliability selling example.

I am providing a section of the TRT that was developed for the salespeople to use in order to learn how to conduct the meeting, and to debrief each meeting that they held.26 It is based on the specific verbiage contained in the S&T step above, along with the TOC Expert's knowledge of the Layers of Buy-In,27 and thus to prevent any objections that would otherwise be raised (see Fig. 25-38), such as: 1. You don't understand what the problem is.

2. I/we don't agree on the direction of the solution.

3. Your solution can't possibly deliver the level of success you claim (too good to be true).

4. Your offer will cause bad side effects.

5. Even if I/we wanted to do this, there are obstacles that block us from implementing the solution (actually buying from you).

6. Other unverbalized fears.

Action will remove the doubts that theory cannot solve.

-Tehyi Hsieh

From TP Analysis to S&T

Every assumption in the S&T should be an entity that is part of the current reality, and can (should) be validated as such. Therefore, the assumptions can be found in the CRT, the EC, and the obstacles of a PRT. The FRT provides the strategy at the highest level, which is essentially the summation of the desired effects (DE), and NBRs provide the input to Level 4 of the S&T. Level 5 comes directly from the obstacles that are verbalized in the PRT process and thus frames at the lowest level the initial actions to be taken to achieve the strategy. Table 25-9 provides a cross reference between where you will often see elements of the TP analysis and the components of S&T steps. The S&T will present the various elements in the form of the actual entities, causalities, and summaries of the various trees or branches of trees. While you will see elements of the PRT and TRT in the S&T, it is typically not necessary to create complete PRTs or TRTs in the process of creating an S&T.

TABLE 25-9 Cross Reference Between the TPs and the S&T tree.

The Knowledge Organizer

I hope that I have conveyed how a well-written S&T can provide an organization with the ability to achieve levels of communication, synchronization, and performance not previously thought possible. It organizes the answers to the three questions of change in a single document, providing cascading levels of logic and detail needed by each level and function in the organization. By making every assumption explicit, it provides a means by which we can exercise the mentality of the scientist and carry out our implementations with confidence. Personally, I can no longer envision leading or participating in a major change effort without using the S&T as the blueprint and roadmap for the initiative.

We are rapidly learning more and more applications for the S&T. For instance, by the time the next TOC Handbook is published, we should be able to provide the detailed guidelines for using the S&T to analyze and define an organizational structure, and to analyze and detail the scope of a project. Stay tuned!

Chapter Wrap-Up.

Dr. John Grinnell's Project Leadership Model (2007), depicted in Fig. 25-39, is an appropriate aid to conclude this chapter on the TOC TP.

Every organization has a goal. Achievement of a goal is an effect-a result-of actions taken by people.

FIGURE 25-39 Project leadership model.

The actions that people take are also effects-results-of the decisions that people made to take the actions.

Decisions are made based on the information available to the persons making the decisions. The point at which information flows is what Grinnell (2007) refers to as the "pinch point" because it comes at the transition between the tangible stuff that we measure, manage, and engineer, and the personal stuff that nobody sees. Let's dive down. Grinnell's claim, which, frankly, I can't argue with, is that the clarity and availability of information is a function of the relationships among the deliverers and receivers of the information. The quality of the relationships between deliverers and receivers of information is an effect of their perceptions of one another, and the foundation for those perceptions is mindsets that stem from the beliefs and culture of the individual.

The use of TOC tends to be focused on those things that are above the information line in Grinnell's model. However, the actual use of it-which means starting with the concept of inherent simplicity and the mindset of a scientist, the acceptance of the possibility that people are good, and the discipline of internal honesty-has a tremendous impact on those things below the "information line." The use of TOC TP will change your feelings, behaviors, and relationships, and the result is greater harmony.

References

Cox III, J. F., Blackstone Jr., J. H., and Schleier, Jr., J. G. 2003. Managing Operations: A Focus on Excellence. Great Barrington, MA: North River Press.

Goldratt Consulting Ltd. 2009. POOGI for MTO Manufacturers, MTO S&T.

Goldratt, E. M. 1990. What is this thing called Theory of Constraints and how should it be implemented? Croton-on-Hudson, NY: North River Press.

Goldratt, E. M. 1994. It's Not Luck. Great Barrington, MA: North River Press.

Goldratt, E. M. 2009. The Choice. Great Barrington, MA: North River Press Goldratt, E. M. and Cox, J. 1986. The Goal. Rev. ed. Croton-on-Hudson, NY: North River Press.

Goldratt, R. 2001. "Transition tree-A review," (unpublished) Kfar Saba, Israel.

Grinnell, J. R. 2007. Project Leadership Model. Chapel Hill, NC: Grinnell Leadership & Organizational Development.

Newton, I. 1729. The Mathematical Principals of Natural Philosophy. Volume II. Translated to English by Andrew Motte.

Scheinkopf, L. J. 1999. Thinking for a Change: Putting the TOC Thinking Processes to Use. Boca Raton, FL. St. Lucie Press.

conflict.Dictionary.com. The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin, 2004. http://dictionary.reference.com/browse/conflict (accessed: December 19, 2009).

situation.Dictionary.com. The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. http://dictionary.reference.com/browse/situation (accessed: December 18, 2009).

system.Dictionary.com. The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. http://dictionary.reference.com/browse/system (accessed: December 18, 2009).

About the Author.

Lisa Scheinkopf is a Director of Goldratt Consulting, and is recognized worldwide as a leading Theory of Constraints (TOC) authority. Lisa worked with Dr. Eliyahu Goldratt in developing the TOC Thinking Processes and is the author of the definitive TOC reference, Thinking for a Change: Putting the TOC Thinking Processes to Use (St. Lucie Press, 1999). Her articles have been published in a variety of industry and professional publications, and she has a long history of implementing, teaching, and public speaking on TOC. With over 25 years management and consulting experience, Lisa is a past Board Member and Chairperson of TOCICO, and has an MBA in International Management from the Thunderbird School of Global Management.

Appendix B: Categories of Legitimate Reservation

The Categories of Legitimate Reservations-The Rules of Logic28

Goldratt developed a set of logic rules, called the categories of legitimate reservations (CLR), to improve communications when using the TP. The purposes of the CLR are to check your logic in constructing your own diagrams and to check the logic of another person's diagrams. They provide a precise methodology for pinpointing errors in your or another person's thinking. The CLR relate to entities or statements in a logic diagram. Three levels of categories of reservations exist. Each level probes deeper into investigating the logic structure. Many of these concepts are difficult to understand at first, but with a little practice, they become second nature. We provide the three levels and seven categories of reservations with examples in Fig. 25-B1. We will revisit these reservations again in this chapter as we present and illustrate each tool. Read each example provided in Fig. 25-B1.

Level 1 Reservation (Clarity)

Clarity is used to develop a better understanding of an entity (a logical statement), the causality between two entities, or an area of the diagram. In studying a diagram and encountering any problem, the clarity reservation is used. It is always the first reservation used. You are asking the presenter to clarify so you can understand better (the cause entity, the effect entity, the causality connecting the two, an area of the diagram, and so on). For example, in Fig. 25-B1, the reviewer may not understand an entity such as 10 or 20, or she may not understand the causal linkage between 20 and 10, or she may not understand a whole segment of the diagram such as 20, 30, and 10. The reviewer would ask for clarity. If the presenter's explanation is unsatisfactory, then the reviewer should use one of the Level 2 reservations to pinpoint the misunderstanding.

Level 2 Reservations (Entity Existence and Causality Existence)

The entity existence and causality existence reservations are used to determine if the entity or statement itself exists or if the causality relationship exists. Examples are provided in Fig. 25-B2.

Entity existence reservation is challenging the existence in reality of either the cause entity or the effect entity. For example, entity 25 is an incomplete sentence. In that state, it is difficult to determine if the entity exists at all. In addition, the reviewer could challenge whether an entity exists in the current environment-entity existence reservation for entity 10. The reviewer does not think that entity 10 "Competition is fierce for our product" exists. She offers as evidence that our company has higher quality and lower prices than competitors do.

FIGURE 25-B1 Level 1 Reservation (Clarity).

Causality existence reservation is challenging whether causality exists between the two entities. It is challenging the causal arrow-Does the cause entity really cause the effect entity? The example in Fig. 25-B3 provides a situation where the reviewer does not believe that entity 10 "Competition is fierce for our product" is the cause of entity 25 "Our firm is experiencing low profits."

If the presenter's explanation is unsatisfactory in showing the existence, then the reviewer should use the Level 3 reservations to pinpoint the misunderstanding. At Level 3, the reviewer must be ready to challenge the logical relationship using a specific reservation.

Level 3 Reservations (Additional Cause Reservation, Cause Insufficiency Reservation, House on Fire Reservation, and Predicted Effect Existence Reservation)

Level 3 challenges should only be used after applying the previous two levels.

The additional cause reservation is used to challenge that the presenter has captured the major causes of the effect entity. It is begging the question that there is at least another cause that creates at least as much damage as the current cause entity. A "magnitudinal and" connector is utilized to satisfy this reservation. Each cause entity independently contributes to the effect entity. If cause entity then effect entity. If (additional) cause entity then effect entity. This situation is indicated where two or more arrows enter an entity and have no "and" connector. Each cause independently contributes to the effect's existence. In this situation, all causes must be eliminated to eliminate the effect. In Fig. 25-B4, the reviewer believes that 15 "Material costs have doubled in the last quarter" has at least as significant an impact on 25 "Our firm is experiencing low profits" as does the suggested cause of 10 "Competition is fierce for our product."

FIGURE 25-B2 Entity Existence Reservation FIGURE 25-B3 Causality Existence Reservation FIGURE 25-B4 Additional Cause Reservation By using the cause insufficiency reservation, the listener is indicating that he or she believes that the current cause entity is insufficient by itself to cause the effect entity. It is begging the question that something else must also exist in addition to the current cause to create the effect. A "conceptual and" connector is usually required to satisfy this reservation. If cause entity and entity (or core driver) then effect entity. The connector is diagrammed as an ellipsis (sometimes called a banana) or line across the arrows. In Fig. 25-B5, the reviewer is challenging that entity 10 "We have not settled on a new union contract" could cause 25 "Our employee morale is low." She suggests that a more accurate explanation is: If 15 "The current contract expires at the end of the month" and 10 "We have not settled on a new union contract" then 25 "Our employee morale is low."

The house on fire reservation (sometimes called the cause-effect reversal) is used to challenge the thought pattern where the cause and effect seem reversed. This usually occurs where the presenter confuses why the effect entity exists with how we know that the effect entity exists. For example (see Fig, 25-B6), if (cause) smoke is billowing from a house then (effect) the house is on fire is not valid logic. An electrical short circuit may cause the house being on fire. If (cause) the house wiring had an electrical short circuit then (effect) the house is on fire. The cause of the fire is a short circuit in the electrical wiring. The original statement is how we know the house is on fire, not the cause of the fire. The smoke billowing from the house is the result of the house being on fire. We have confused the cause with the effect. Ask "why" to determine the cause.

The predicted effect existence reservation is used to explain why you disagree with the presenter's previous explanation and generally is the last reservation used. In this challenge, you are prepared to show the presenter that his or her logic is flawed. There are two types of challenges-one questioning the existence of the cause entity and the other questioning the existence of the causality between the two entities. This challenge is presented by providing a counter example that if the predicted effect is present, then the cause cannot be present or if the effect is absent, then the cause cannot be present. In Fig. 25-B7, If 10 "Our quality has deteriorated significantly" then 25 "Our profits have decreased significantly" would be validated by the existence of 35 "Our returns and field service expenses have increased significantly." However, in examining our expenses this effect does not exist. The reviewer then challenges the existence of entity 10. Suppose the cause entity exists-what other predicted effect must be present? If that predicted effect is not present, then the cause is not present. Likewise, if the predicted effect exists it adds validity to entity 10 being the true cause of 25.