Daily Management with TOC

Oded Cohen

Introduction-Purpose of the Chapter

This book contains a blend of Theory of Constraints (TOC) methodology and standard solutions that have been developed, implemented, and perfected over almost three decades. This chapter is about giving managers the Thinking Processes (TP) tools and procedures to enhance their ability to make better decisions, implement them, and get the expected outcomes. To manage the TOC way we need a common basic agreement: The role of managers is to ever improve the performance of the area under their responsibility.

Management responsibility is the smooth operation of their area today as well as in the future. Therefore, management must solve today's problems as well as initiate improvements for better performance in the future. Many managers think that there is a trade off between spending time (or money) sorting out today's burning issues or spending the time (or money) on improvement initiatives. That leads to managers just dealing with fires and not enough time devoted to system improvements. We would like to offer the use of the TOC TP for daily operations of helping to solve problems in such a way that is good for the short term as well as laying the foundation for the future.

Explicitly for this book, you-the manager-may be in one of three time phases (before, during, and after) with reference to a TOC solution: 1. In preparation for implementing TOC. Your area is run in a conventional way-in line with the company's views and/or your views.

2. In the process (project) of implementing a TOC solution. Bringing a new approach to your area may raise many issues, problems, and conflicts between the "old" way and the new way. You want to provide leadership and hence you must address these issues in a way that will move the implementation forward while ensuring the support and collaboration of the relevant people.

3. The TOC solution is an integral part of the way you run your part of the organization. As such, there is a need to work systematically on daily problems ensuring that the spirit of the solution and the TOC way of managing is kept. The TOC way means that we are committed to continuous improvement. Many of the TOC applications contain buffers and Buffer Management (BM). BM provides management with many incidents of disruption to the flow. These incidents provide opportunities for improvement and for that, we need effective tools for analysis and solution development.

Copyright 2010 by Oded Cohen.

Three major TP are available for daily use: the Evaporating Cloud (Cloud), the Negative Branch Reservation (NBR), and the Intermediate Objectives (IO) Map.

The Cloud is the heart of the TOC methodology. It helps us to understand the problem and develop a breakthrough solution. Thereafter, we need the NBR in order to strengthen the solution and the IO Map in order to prepare the implementation plan. The chapter will follow this sequence. It is intended to show how to apply these tools in managing day-today operations, as the title of this chapter suggests. For more details of TP methods, see the other chapters in this Section VI.

Solving Daily Problems

During the course of the day, unexpected problems crop up to disrupt your concentration. Many times, you are unable to set them aside but must address them before moving on. Understanding problem structure and being able to frame a problem while surfacing the relevant facts helps address these problems effectively. A simple way to learn Clouds is to try them on these daily problems. Let us take a close look at the Cloud.

Problem Investigation and Solution Development-the Cloud

The objective of this section of the chapter is to enhance your ability as a manager to make better decisions and find better solutions in cases where conflicting options and views block such solutions. The better solutions are achieved through surfacing choices that resolve these conflicts (dilemmas) underlying the problem-using the Cloud method. The Cloud is a logical diagram that represents the problem through five boxes that are connected through the logic of cause and effect. The Cloud comprises three types of statements: Statements captured in the boxes A, B, C, D, and D-presenting the most important entities helping to verbalize the conflict.

The underlying assumptions-presenting the logical arguments supporting the cause-and-effect relationships between the entities written in the boxes (the logical connections are denoted through the use of the arrows on the diagram).

Potential injections-new entities that when introduced into the reality of the problem can cause the conflict to disappear (this is why the solution is also called "Evaporating Clouds"). Please note that while theoretically there are potential injections to break every logical connection on the Cloud, it is unlikely that logical connections between A and B, or between A and C, need to be broken because by definition B and C are the necessary conditions to achieve A. If we feel we need to break these arrows, then it means that the Cloud is not the true representation of the conflict or dilemma.

See Fig. 24-1 for the format of the Cloud, the assumptions, and the injections.

In this chapter, I will cover the use of the Cloud1 as a stand-alone application of TP for daily problems, especially those that managers have with issues that in their eyes prevent them from performing their jobs better. People are promoted to managerial positions due to their capabilities and past performance. Managers are put in charge of areas (departments, projects, processes, etc.) and people, and hence are constantly bombarded by system and people problems. Not all of the problems are easy to solve. Many times managers feel that solutions they have come to are not the best they could have produced. If you have this feeling, then this chapter is for you.

FIGURE 24-1 The general structure of a Cloud with the underlying assumptions and potential injections.

There is another good argument for using the knowledge and the tools of this chapter-to prepare you for the use of the TOC methodology for solving big issues that need the full TP work. We have found that people who have the knowledge and practical experience of the basic TP tools-the Cloud, the NBR, and the IO-Map-produce faster and better strategic solutions.

Let us start with solving daily problems.

When reviewing daily problems that managers encounter, we can see a broad spectrum of situations and challenges confronting managers while performing in their roles. On one side of the spectrum, they have to deal with their own inner dilemma of making a clear choice between options. On the other extreme, they have to deal with open conflicts between them and other people in the organization or conflicts between two parties that they are expected to resolve. In between there are problems with the system or sporadically with other people (peers, supervisors, and even family members) that need to be addressed.

The objective of this chapter is to enhance your ability as a manager to address these problems in such a way that produces an immediate solution without blocking the long-term solution for these issues.

Application of the Cloud for Daily Problem Solving

Let us look at five applications of the Cloud for daily problem solving: Addressing inner dilemmas-issues when the person is faced with two major options and is not sure which route to take.

Describing and solving day-to-day conflicts between two people.

Analyzing fire-fighting situations-when the manager is forced to deal with emergency problems (fires) to find ways to prevent them from reoccurring in the future.

Analyzing a problematic area or a specific issue within the current reality-by detecting an Undesirable Effect (UDE) in the area under analysis and building the UDE Cloud. The UDE Cloud is also instrumental for preparing for a sales meeting or developing a sales offer made better by understanding the reality of the buyer (the customer).

Handling multi-problem subjects through the Three-Cloud approach-to help the manager build a more comprehensive view by building the Consolidated or Generic Cloud when there is more than one UDE. This approach is used for group consensus, accelerating existing initiatives, and the buffer analysis for a process of ongoing improvement (POOGI).

All problems are handled by one general process of seven steps covering: 1. Building the Cloud and its logical components (Steps 15).

2. Constructing the solution (Step 6).

3. Communicating the solution to the relevant people (Step 7).

Building the Cloud is done through raising questions and writing the answers for each box. Thereafter, when you have a first version of the Cloud, apply the logical checks and make the necessary changes and upgrades.

The questions and the sequence of asking them differ from one Cloud application to another. The different applications of the Cloud also differ by the way we find a solution and the way we apply the solution and communicate it to the people who are involved and affected by the problem and the solution.

Let us start with addressing inner conflicts. Our experience shows that this type of problem is the easiest way for learning the mechanics of building the Cloud, as it does not pose any personal uneasiness in developing the solution and communicating it (we hope).

What Is a Cloud?

The Cloud2 is the foundation in the TOC TP. It is, in my eyes, TOC in a nutshell. The Cloud is the process of framing the conflict and the generator of the breakthrough solutions. We use the term breakthrough in the sense that we bring to the reality of the environment under study a new and fresh solution. Frequently solutions that were used under emergency conditions solved the problem but were not introduced into the system under the perception that they are not suitable for regular conditions of the system, many times due to perceived conflicts of the "emergency" solution with the current procedures of the existing system.

In TOC, we define something as a problem only if it prevents us from achieving what is important for us (our objective). Therefore, it is imperative to be able to verbalize what objective we are striving to achieve that is jeopardized by the problem.

At the same time, we know that if a manager complains that a problem cannot be solved there must be an underlying conflict that blocks him from finding and implementing solutions even though the objective that is being blocked is extremely important and the manager raising the problem has the interest and the desire to solve the problem. It feels like the third law of Newton-as if the manager applies force to solve the problem and experiences a "counterforce" that prevents him from sorting it out. The conflict is in the tactical level-actions or decisions that should be taken in order to achieve the desired objective.

Therefore, when a problem is brought under the heading of an "unsolvable" one, we need to reveal the underlying conflict by converting the problem into a Cloud. Once we have the Cloud, we can apply the problem-solving processes to reach a win-win solution. All Clouds have the same basic structure as that shown in Fig. 24-1.

The Cloud is a five-box conflict diagram denoted by A, B, C, D, and D (D prime). Each box has a specific role in describing the problem.

There are three different roles: Objective [box "A"]-the objective that is being blocked or jeopardized by this problem.

Needs or necessary conditions [boxes "B" and "C"]-the term "need" is used in order to denote that this condition is mandatory for the achievement of the objective [A]. The BA and CA arrows present a logical connection of necessity. It reads, "In order to have the desired objective "A" we/I must have both needs B and C. The logic states that if one of these needs is missing, the objective will not be achieved.

Tactics [boxes "D" and "D"]-actions, wants, or decisions that are chosen to satisfy the needs. The DB and DC arrows state that in order to satisfy the need, the specific action [D to satisfy the need B, and D to satisfy the need C] must be taken. These actions, wants, or decisions cannot reside together at the same time and that brings them into conflict, which is denoted by the D-D conflict arrow.

Ensuring the Quality of the Cloud-Logical Checks

As the Cloud is the base for finding a win-win solution, we have to ensure that it is built properly and that the logic is sound. After writing the Cloud, it is recommended that we read it again (even aloud) including the logical connections represented by the arrows: In order to achieve "A" we/I3 must have "B"

In order to achieve "A" we/I must have "C"

In order to satisfy "B," action "D" must be taken In order to satisfy "C," action "D" must be taken D and D are in direct conflict Next, we should check the logic of the diagonals between the tactics or actions and the needs. The strong message from the Cloud is that every action endangers or jeopardizes the achievement of the opposite need. The additional checks are: "D" endangers/jeopardizes/hurts need "C"

"D" endangers/jeopardizes/hurts need "B"

After checking the logic, the necessary changes and upgrades should be made in order to make the Cloud clear and logically sound. It is also recommended to present the Cloud to a knowledgeable person who can give feedback about the clarity of the wording and the logic.

Solving Problems Using Clouds-the General Process

The general process is: Step 1. Identify the type of the problem (inner dilemma, day-to-day conflict, etc.) and match it with the right type of Cloud to address such problems.

Step 2. Write a storyline of this problem in a factual, objective way as if you were completing an incident report. Objectivity is necessary even if the problem causes an emotional upset. The purpose is to unleash the intuition of the person building the Cloud about the problem and gather the data for building the Cloud.

Step 3. Build the Cloud.

Step 4. Check the logical statements of the Cloud and make necessary corrections and upgrades.

Step 5. Surface the assumptions behind the logical connections to find the one that is supporting the conflict.

Step 6. Construct your solution and check it for win-win.

Step 7. Communicate the solution to the people involved in dealing with the problem.

Let us look at this process in detail for the example of an Inner Dilemma Cloud.

Inner Dilemmas

Step 1. Identify the type of problem and match it with the right type of Cloud to address such problems.

The inner dilemma is defined as a situation in which the manager is under pressure to take action or make a decision with which he or she doesn't feel comfortable. They have to choose between two conflicting options. They have not yet disclosed their preference, so there is no open conflict yet.

To learn and master the process of building and breaking the Cloud (finding the solution), a single problem is recommended. Avoid any problem addressing deep issues that contain a chronic problem4 or an unpleasant history of a relationship with someone else that may need a more comprehensive solution. An example of a single or "one-off problem" is as follows: "I am under pressure from my boss to clear a technical request this Saturday, while I have promised my family a weekend out of town."