- First I want to provide some brief background. I came to learn TOC when I worked at Procter & Gamble. TOC was introduced to boost their efforts to construct an R&D capability in Latin America at their Technical Center. The goal was to improve Product, Process Development and support for the commercial, production and logistics operation in the continuous stream of business for the region with a focus on real customer needs. For example, the majority of people lived in houses where the floor was compacted dirt or some substitute, or best case polished concrete, so the needs for keeping a clean house were different than in the developed world. Water in most places at that time was a luxury.
- I learned about the Thinking Processes and applications from TOC directly from Dr. Goldratt and his staff. At some point I felt confident to test his approach in my job. This started in 1996. From that point forward I continued to learn from the best and Dr. Goldratt himself, achieving success after success in making my work better, more productive and higher profile.
- One of those applications was Critical Chain, for Project Management. My job was essentially project management. Here is where I became familiar not only with the logistical process and the tools, but the thinking and principles of flow that are at the heart of Goldratt’s ideas. Procter was always big on another big area of thought and technical knowledge: Quality and Dr. W. Edwards Deming’s work. I was asked to reformulate and teach the P&G systems thinking and improvement methodology to R&D in the region. It combined Deming’s principles and tools with several other complementary approaches. The books included The Goal by Goldratt. This was my first contact with trying to piece these two geniuses together.
- Then, I was fortunate to meet, learn and work alongside Oded Cohen, one of Eli’s closest associates and friends. When he published with Dr. Domenico Lepore Deming and Goldratt, The Decalogue, it blew my mind. It was a masterful integration of two bodies of knowledge to create a single process for improvement of any organization. In 2003 I left P&G and joined Dr. Goldratt to help him expand and develop his company Goldratt Group. It was the ride of a lifetime of challenges for the mind and for the soul. Meaningful Life is what he called it.
- Fast forward several years and now I am friends with Domenico and his partners Dr. Giovanni Siepe and Dr. Angela Montgomery. This began when they graciously invited me to test and learn about their software Ess3ntial. I gladly jumped at the opportunity. Why? It was a chance to learn from two other physicists, experienced in the world of Deming (and TOC). I have read their books and played with the tool with several rounds of discussions to really understand what they are proposing with this new tool and their approach. Here is what I have learned and what I am doing:
- Critical Chain was meant for Project Management, especially in companies where Projects are what they do, day in, day out. It was an important part of my work at P&G. Now at the Goldratt Group, we work with companies and that is what we do…Projects – Viable Vision Projects, meaning how to take a company and transform it into an Ever Flourishing company.
- The Decalogue provides companies with a generic road map for how to manage their present, think about their future and start walking towards it.
- The Goldratt Thinking Processes are the Tools to connect reality with our thinking, and really find how to improve it, but improvement does have a constraint of its own. Goldratt declared that the ultimate constraint is Management Attention. I tried to explain this to someone who recently asked me why is this the ultimate constraint if the demand on managers’ capacity can be delegated (that’s an assumption of course, but smart). Here is the kicker and now my now best way of understanding it. “When you cannot clearly convey or explain your intuition, all you do is share and increase confusion.” This is Eli at his best. Take this one step further. If you cannot change or challenge your deepest (wrong) assumptions, and cannot share them or lead your organization to challenge them, then, management attention will continue to be the constraint and the improvement will be curtailed. It will not be exponential. The organizational culture (the bulk of shared assumptions) and the structure (hierarchical pyramid and reductionist view of function) are currently constraining any organization. You can challenge the culture through the disciplined application of the Thinking Processes. But, how do we challenge the structure? Anybody? Any ideas?
- Enter, Ess3ntial. Without openly challenging the organizational structure, Ess3ntial provides from its conception and build, the process and elements to ensure that a company addresses the boundaries between functions and in the hierarchy to blow them apart in order to properly construct a project, a team and a company capable of defining the ideas and changes that need to be implemented. Nowadays, reality demands that we make changes in how we do things. These changes are projects. Projects in Ess3ntial are built from the basis of competencies. These are all that are required from within and outside the company to ensure that the projects are properly built and executed to successful completion. The tool forces you to think in terms of competencies, looking at the company and its people as a whole. Then, once this part of the work is done, then and only then you can start to work on your project and run it the Critical Chain way. Yes, it will run them on Critical Chain.
- Ess3ntial is an elegant solution – a bold approach and a simple one. As such, no one said it will be easy. It is not meant to be used just as a Critical Chain software. It provides a missing piece – a tool to nudge the organization towards acquiring the collaborative spirit that Critical Chain is meant to bring forth, but with a boost: project planning based on competencies. To me, this is the breakthrough and standout element.
I have used this tool to plan and execute an ambitious Viable Vision plan for a company, and now we are putting the improvement projects of the company in the tool. For example: How do you build a sensible and timely Capacity Elevation Plan? How do you intersect it with the R&D and new Product Development? These are not only thought of as projects and the outcome they bring – looking through the lens of Ess3ntial we need to look at our people and capabilities flow. I believe it shifts our focus from just projects and outcomes to people and culture.
Javier Arevalo
Partner/Director, Goldratt Consulting, Latin America