Achieving a holistic implementation of TOC should start with setting a very ambitious target for achieving both sustainable growth and stability, not based on extrapolation from the past, but on the inherent potential. If an ambitious target already exists, it should be validated to ensure that it really would be a win-win-win for all stakeholders.

Once an ambitious goal has been set, time should be invested with all the stakeholders to really understand the gap (between actual performance and the goal) and also to ensure that all stakeholders understand the consequences (on the system as a whole using predicted effect logic to determine the likely impact on key stakeholders and using T, I, and OE to determine the financial impact) of both closing and not closing the gaps.

Next, the important decision has to be made on where to focus scarce resources to close the gap (to sustainably improve the flow of goal units) and, if not more important, to decide where not to focus. A proven way to get these answers is to use TOC's 5FS and TP such as the S&T tree. All such change initiatives of what to start and stop should be planned and buffered as a project (using CCPM) and should be pipelined based on agreed strategic priority and released only when the capacity to execute is available.

However, knowing where to focus is not sufficient. Top management must ensure that simple holistic rules for planning and execution (according to TOC's known logistical solutions) are in place and that obstacles/excuses for not starting the desired actions (e.g., implementing TOC planning and execution rules) or not stopping the undesired actions (that cause waste, local optima disharmony within organizations) are systematically removed. In addition, they must ensure that everyone has the means (systems) and ability (know-what, know-how, and know-why) for their required contribution, but also recognize contribution and success (and when convinced the means and ability were provided, hold those still not contributing accountable).

A fast (and reliable) feedback mechanism is required to continuously reduce the time to detect and time to correct for erroneous assumptions and for changing environmental conditions, especially for changes in the system constraint.

A POOGI mechanism such as TOC's BM should be implemented in each of the main functions to guide where further process improvement or capacity elevation is required most to maintain the balance between supply and demand.

Finally, don't blink. Persevere in the quest to achieve growth and stability despite all the corporate and individual idiosyncrasies.

References

Ackoff, R. L. 2006. "Why few organizations adopt systems thinking," Systems Research and Behavioural Science. 23:705708.

Barnard, A. 2003. New developments and innovations in the Theory of Constraints Thinking processes, Paper presented at the TOCICO Conference in Cambridge, UK (October).

Barnard, A. 2008. Using a simplified Theory of Constraints approach to achieve more with less in less time within the public sector: A case study from Africa, Sun City, South Africa: SAPICS Conference Proceedings (June 29July 2).

Barnard, A. 2009. How to identify and unlock inherent potential within organizations and individuals using a systems approach. PhD dissertation, Da Vinci Institute, Johannesburg, South Africa.

Barnard A., Rajaniemi, K., and Nordstrom, F. 2009. Achieving fast and reliable deliveries with a robust TOC solution simple enough to be supported by standard ERP systems. Sun City, South Africa: SAPICS Conference Proceedings (July 1215).

Collins, J. 2006. Why Business Thinking Is Not the Answer. Good to Great and the Social Sectors: A Monograph to Accompany Good to Great. New York: HarperCollins.

Deutschman, A. 2007. Change or Die: The Three Keys to Change at Work and in Life. New York: Harper Business.

Funcke-Bartz, M. 2006. "Sensible constraint management," Academic Press Plant Systematics. 7879.

Goldratt, E. M. 1984. The Goal. Croton-on-Hudson, NY: North River Press.

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. 1999a. Goldratt Satellite Program Sessions 18. (Video series: 8 DVDs) Broadcast from Brummen, The Netherlands: Goldratt Satellite Program.

Goldratt, E. M. 1999b. POOGI Forum Letters, www.toc-goldratt.com/index.phpcont=137.

Goldratt, E. M. 2008. The Choice. Great Barrington, MA: North River Press.

Goldratt, E. M., Goldratt, R. A., and Abramov, E. 2002. "Strategy & tactics," unpublished article.

Immelman, R. 2003. Great Boss, Dead Boss. Gurnee, IL: Stewart Philip International.

Kendall G. 2001. "TOC strategy: The 4 4 way," TOC Review April:2831.

About the Authors

Dr. Alan Barnard is the CEO of Goldratt Research Labs, a director of Goldratt Group (Africa), Chairman of Realization Africa and acts as project auditor on a number of large TOC projects around the world. One of Alan's passions in life is to apply the same techniques of identifying and unlocking inherent potential within businesses to individuals (he is the lead facilitators of the annual Odyssey Program) as well as to not-for-profit organizations and governments to help them achieve more with less in less time. Alan is also past chairman of TOCICO (20032005), Past President of SAPICS (19982002), Chairman of the TOC Odyssey Institute and has been a serving judge in the National Logistics Achiever awards for Southern Africa for the last 7 years. Alan obtained his BSc Industrial Engineering degree (Cum Laude) in 1991 and completed his MSc and PhD in the management of technology and information at the Da Vinci Institute of Technology in 2009. The title of his PhD thesis was "How to identify and unlock inherent potential within organizations and individuals using the system's approach of Theory of Constraints".

SECTION V.

Strategy, Marketing, and Sales *

CHAPTER 17.

Traditional Strategy Models and Theory of Constraints

CHAPTER 18.

Theory of Constraints Strategy

CHAPTER 19.

Strategy

CHAPTER 20.

The Layers of Resistance-The Buy-in Process According to TOC

CHAPTER 21.

Less Is More-The Buy-In Process According to TOC

CHAPTER 22.

Mafia Offers: Dealing With a Market Constraint *

Where are we going and how do we get there? This is the classic question of Strategy. In this section we see how to integrate Strategy with Tactics with a view toward continuous improvement. System constraints are a point of focus in the process. Approaches to implementation, the layers of resistance to change that may be encountered and ways of overcoming them are also covered. The application of the basic concepts of Goldratt's Drum-Buffer-Rope and Buffer Management are applied to the management of the Sales Funnel to increase an organization's sales closing rate and Throughput. The TOC approach, the Mafia Offer, is presented: the guidelines for creating an offer, how to present an offer, and how the reader can create their own.

Two successful approaches to strategy development are provided. Both use the Thinking Processes. In the first approach, Boyd's OODA loop (observe, orient, decide, and act) is applied to the Thinking Processes to provide a proactive approach to strategy. We also see a new paradigm for strategy: the Strategy and Tactic tree. Developed by Dr. Goldratt, this concept links the discrete steps of strategy to the specific tactic each required for success, linking strategy and tactic with assumptions defining their necessary and sufficient interdependence. Strategy and Tactic steps are defined level-by-level to the depth necessary for full and effective execution. Generic strategies are presented here and later in the book outlining recommended approaches for a variety of business environments. "How-to" steps for constructing the Strategy and Tactic tree are described in the next section in Chapter 25.

CHAPTER 17.

Traditional Strategy Models and Theory of Constraints

Marjorie J. Cooper

Introduction.

Strategy is a difficult concept, and often ill-defined, but the term is used frequently and individuals seem to know at least what they consider a strategy. For example, people have strategies for getting things done, from a simple strategy to avoid heavy traffic on their route from work to home to a complicated strategy for acquiring and saving the funds to pay for their children's college education. Some people have strategies for avoiding things, such as putting in too many hours on the job, having to listen to a long-winded neighbor, or being caught by one's spouse while raiding the Godiva chocolates. At the simplest level, strategy is no stranger to most people.

Organizations also have strategies. The processes of developing and implementing these strategies may be detailed and rigorous; often however, strategy development-not to mention the subsequent implementation of the strategy-lacks effectiveness and produces less-than-hoped-for results. Although the field of business strategy within the academic disciplines is comparatively new, theories of strategy conception and implementation have been emerging in business schools and among practitioners for several decades. This chapter will review the major schools of thought on strategy, including some strengths and weaknesses of those strategy theories. General business strategy, marketing strategy, and sales strategy will each be addressed individually, although an argument will be made that separate strategies attached to specific functions are at best ineffective and, more likely, deleterious to the long-term overriding goals of the organization.

What Is a Business Strategy?

According to Drucker (1994), a theory of business is comprised of three parts. These include (1) assumptions about the environment in which the business operates or intends to operate, including markets, customers, technology, and societal structures in general; (2) assumptions about the specific mission that the company has undertaken; and (3) assumptions about the core competencies needed to execute the company's mission successfully. Underlying these assumptions is the notion of integrative ability that allows a company to bring many and widely disparate pieces of information and skills together to form a cohesive implementation plan. Thus, strategy for Drucker is implicitly-if not explicitly-an ongoing process, continually revisited, refined, and updated to address each of these three parts.