Elle

The Sandle vs. The Work Boot

92 posts in this topic

sjw and alann (I don't quite understand why sjw disagrees with alann's comments) bring up a very important point as well: in the real world, in a real company, most human beings can serially work on different things. From an analytical standpoint, for "Process A", it may be the case that person 1 only needs to work 35% of the day before other constraints would make further work in that direction a waste of time. The assumption that he then has 65% of the day free rests on the idea of one person:one task, which is very primitive. "Wearing many hats" is a signature analogy for the entrepeneurial company. The complete problem, if one wanted to (and actually could) do a true global optimization, needs to consider the set of all processes and all multiple individual capabilities, in order to optimize the objective function. Defining that function could itself be very difficult; having it represent "next quarter's profitability" could lead the company to disaster by moving resources away from long term projects that are risky (only a probabilistic payoff) and consume resources in the near term that negatively affect short term profits, but could lead to The Next Big Thing for the company.

Share this post


Link to post
Share on other sites
I don't quite understand why sjw disagrees with alann's comments

I took him to be partially supporting the notion that it can be a good thing for business when individuals perform below their potential in order to keep some sort of "harmony" within the group. I totally disagree with that: except in lifeboat (or row boat) scenarios, there are no conflicts between maximizing individual productivity and maximizing business results.

Share this post


Link to post
Share on other sites
I don't quite understand why sjw disagrees with alann's comments

I took him to be partially supporting the notion that it can be a good thing for business when individuals perform below their potential in order to keep some sort of "harmony" within the group. I totally disagree with that: except in lifeboat (or row boat) scenarios, there are no conflicts between maximizing individual productivity and maximizing business results.

:lol: Oh. No, that's not at all what I meant. I just meant that one individual's concept of what the most productive use of his time is might not be right in the context of the overall project. I quite agree with you about the negative consequences of mowing down the "Tall Poppies" so that nobody feels threatened, or some other collectivist premise. I have plenty of experience, though, with Stars (in their own minds) who allocate their time to what they want to do right now, regardless of what will get the product out the door. The ones who can pitch in and solve problems, get 10 things done in the time it would take a less talented or experienced individual to do 5 are a huge asset and can save a project. I was thinking more along the lines of Critical Path Methodology, in the case of tight time constraints, of the need to understand where the effort is best focused to get the project out the door. And, sometimes, that means a less elegant solution or a tighter project scope.

Actually, this sounds a bit redundant after Phil's comments, but I just wanted to correct any impression that I'm in favor of dumbing down the stars in favor of the lowest common denominator. No way. I've hate environments like that. I had a boss that wanted me to "punch the clock" (show up at 7am), even though I regularly put in ca. 10 hours and had support responsibilities that took me into the evenings. He said he wanted "to make you a good corporate citizen." I said "Great! Where's the polling booth, so I can vote you out of office." In this case, I prevailed and worked there for another 2 years.

Share this post


Link to post
Share on other sites
There's not an argument if you put it in terms of integrating your work with everyone else's, but the oarsman metaphor implies more than that. When the oarsman individually strives to work to his potential, then its inherently in conflict with everyone else, but in a real-world business situation that is absolutely not the case. E.g., in software development, you can work as fast as you want, you just move on to a different task if you get done sooner than expected.

SJW

Yes, this discussion is only relevant in an environment where division-of-labour has been applied (and I've been careful to establish that as the context). Obviously this is typically the case in a project environment (think, construction, ship building, etc).

If you propose a software-development environment where all developers work at their maximum rate -- and switch tasks when they run-out of work, then there are only two ways of achieving this (consistently).

First, you could multi-skill all developers; the result of which is that you end up with a traditional pre-industrial craftshop (which may or may not be a good thing).

Second, you could allow developers to perform the same task on another project when their work runs out. This maintains the benefits of division-of-labour but it introduces a problem I've already referenced. If all developers strive to be constantly busy in such an environment, the number of in-progress projects will tend towards infinity -- as will project cycle-time.

This second scenario is not at all unrealistic. In a typical project environment, management releases projects sooner than necessary to keep resources busy (maximise efficiencies). This causes the environment to become chaotic (meaning that you probably end-up with more net idle time!) raw-material costs are incurred earlier than necessary, re-work increases and because all resources 'appear' constantly busy management loses the ability to pipeline 'interstitial' projects into what would otherwise be gaps in workload.

Justin

Share this post


Link to post
Share on other sites
Yes, this discussion is only relevant in an environment where division-of-labour has been applied (and I've been careful to establish that as the context).

I have many years of experience leading software projects. I think your notions of division of labor would be very destructive to productivity on them. I also think your notions don't apply well to the other areas you list. In fact the only area it might apply (and only sometimes) is to the most mindless kind of work: assembly-line work. And it's true that in assembly-line work, if someone upstream disrupts the stuff later, then that may be bad, depending on how well the assembly-line was designed to handle variable productivity in different stages.

Share this post


Link to post
Share on other sites
I have many years of experience leading software projects...

I think Shayne makes a good point although he might not have intended it directly.

How can someone that walks into a company that they have never worked in before know exactly where the weak-link might be. In my description from earlier could a consultant have walked into NUCOR and known that shims would save the company millions of dollars. Could a consultant have know how many welds would hold, that ended up saving the company thousands. Or could someone that has never worked in distribution ever of had the vision that going to computers would enhance their tracking and proficiency in deliveries (remember this was the 1970's), while enhancing their profits.

What I am trying to get at here is that it takes years of being in a profession to understand it thoroughly enough to grasp the larger picture. I am not saying that there are not geniuses that grasp certain apsects right away. But it still has to be learned and then integrated, it is an epistemological thing as we are born tabula rasa. Bill Gates started working with computers when he was 12. Jack Welch worked for GE for 20 years before he became their CEO. Sam Walton worked in retail for 15 years before he opened his first Wal-Mart.

I think company owners would be much better off by training their workers in the fields needed while allowing them to move up the ladder into management. After years of experience in real world problems and not only class room theories they would be able to define the problem and solution without outside personnel or major slow-downs. But, instead today most companies hire business graduates or MBAs that have tons of knoweldge in theories and no real time application. Most companies also put these MBAs in charge of people that they have no knowledge on how to run the people, machinery nor the project.

Of course this is just my thinking on the subject and you can all disagree with me.

Share this post


Link to post
Share on other sites
I think company owners would be much better off by training their workers in the fields needed while allowing them to move up the ladder into management. After years of experience in real world problems and not only class room theories they would be able to define the problem and solution without outside personnel or major slow-downs. But, instead today most companies hire business graduates or MBAs that have tons of knoweldge in theories and no real time application. Most companies also put these MBAs in charge of people that they have no knowledge on how to run the people, machinery nor the project.

That has been a major beef of mine ever since I was in college.

I got my basic business education from my father. My dad was an entrpreneur and my bedtime stories were about the time he organized an assembly line in a luggage factory and the price war in the hotdog business. I was involved in several of his businesses and he encouraged me to work for money and start businesses of my own which I did from age 7. Often I earned more than my friends' parents did.

In college, I decided to minor in business at the Wharton School. When I took Business Management 101 and Marketing 101, I had enough real-world business experience to realize the courses were total B.S. My textbooks were filled with all these "management theories" that had nothing to do with reality. None of my professors had actually ever had a career in business but had risen up through the ranks of academia. After that, I avoided the "B.S. courses" and concentrated on "hard stuff" everybody (but me) hated: accounting, management accounting. mathematical production management, finance, and business law.

In my post-college career, most of it as a contract consultant project manager, I ran into managers that went through the motions of being a manager and often spouted the jargon I heard in college. In my own mind, I dubbed them "textbook managers" to distinguish them from real managers.

Share this post


Link to post
Share on other sites
[How can someone that walks into a company that they have never worked in before know exactly where the weak-link might be.

Philosophically that's an important question. Somebody grounded in the various actual details of a particular business is in a much better position than the "textbook manager" that Betsy describes; being loaded with theory without a tie to reality is total rationalism. One has to have many concretes before conceptual ideas can be properly grounded and understood.

This thread just reminded me of a funny movie, Back To School, that I saw long ago, with Rodney Dangerfield. In one of the scenes, in a business management class (I think) he listens with scorn to the rationalistic theories of the professor then openly objects with real world experiences. The other students, previously bored, begin taking notes in earnest.

Share this post


Link to post
Share on other sites
[How can someone that walks into a company that they have never worked in before know exactly where the weak-link might be.

Philosophically that's an important question. Somebody grounded in the various actual details of a particular business is in a much better position than the "textbook manager" that Betsy describes; being loaded with theory without a tie to reality is total rationalism. One has to have many concretes before conceptual ideas can be properly grounded and understood.

That reminds me of something Stephen did when he was working for Programming Methods (PMI). One of their clients, a major manufacturer of telephone equipment, had hired PMI to program a system for the automated design and manufacturing of complex telephone cables. The design for the cabling system was presented by a team of three Operations Research PhDs that had been working on it for the last six months. The presentation took three hours and then they opened it up for discussion.

Stephen stepped up to the blackboard and, in 10 minutes, presented an alternative design that met all the requirements in a much simpler way. The O.R. PhDs were especially impressed and wanted to know where Stephen had learned so much about telephone cabling. He told them he had spent the last two days in the cable manufacturing shop asking the workers and the managers questions about what they were doing.

Share this post


Link to post
Share on other sites
Philosophically that's an important question. Somebody grounded in the various actual details of a particular business is in a much better position than the "textbook manager" that Betsy describes; being loaded with theory without a tie to reality is total rationalism. One has to have many concretes before conceptual ideas can be properly grounded and understood.

This sounds like a variation on the 'it'll work in theory, but not in practice' dilemma.

A theory that can't be implemented is a worthless non-theory.

Similarly, an expert who understands the theory, but not how to apply it is an arrogant fool.

Just yesterday, a potential client asked me if I'd do detailed research into his industry before I dispensed advise. I told him that I wouldn't, because I didn't believe it was realistic for me to replicate his managers' knowledge in any reasonable time-frame (and I didn't think it was healthy for me to create the perception that I had).

I told him that my preference was for us to build a solution as a team. His managers provide the knowledge (and the intuition) and we will provide the specialised expertise and the critical third-party perspective.

Together we will design -- and ultimately implement -- a solution. The responsiblity for the solution and the results will be shared. If either party under-performs; we both fail.

Do you need experienced home-grown managers or do you need detached experts? You need both.

Justin

Share this post


Link to post
Share on other sites
Justin - I don't think we've been disagreeing here, but perhaps have a different approach to looking at the overall problem. Your focus seems to be on the implementation details for optimizing a given set of capabilities. I acknowledge that it's an interesting and important problem and I don't disagree that even "within a few percent" of rowers still need to be synchronized (to take that one example). But my focus has been on improving final results, including competitive results. Analysis of an optimal system should include the corollary problem of how to improve its output by modifying its parameters - or perhaps modifying the way the system works entirely in order to better utilize resources.

I do have some mathematical background and have worked on non-linear curve fitting programs (with many parameters), so I understand the idea of local vs. global maxima/minima.

I agree that we agree. I had guessed that already!

Justin

Share this post


Link to post
Share on other sites
Do you need experienced home-grown managers or do you need detached experts? You need both.

I disagree and do not think you would need both if today people had a long term vision with the company they work for, but most do not. Most people today think mostly about getting rich quickly (so cannot or do not see the bigger connection to other areas of the company), and have no intention of staying long term with a company. Which brings me back to my other points that I have made in this thread about what I thihk is needed for a company to be around for a long time and profitable. So as I see it, your theories are nothing more than a band-aid, as they do not change the fundamentals of the company that you are working with and are just a continous short-term solution.

The owner or manager of a compnay has to have a long-term vision that everyone else in the company gets behind and works toward or the company will most likely fail long-term, which most do.

Share this post


Link to post
Share on other sites

Justin,

I hope you do not take my following question as presumptous but look at it in the context I am trying to set.

Have you read many books on great companies or people? If you have, have you read them looking for the fundamentals that all of these companies or people applied to achieve the great wealth that they produced? If you have not, I would recommend starting with Dr. Edwin Locke's book The Prime Movers, Traits of the Great Wealth Creators. This book is one of my favorite of all the business books that I have ever read, and I have read hundreds of them.

Again, I hope you do not take this in the wrong way and you can always discard my comments.

Share this post


Link to post
Share on other sites
I [...] do not think you would need both if today people had a long term vision with the company they work for, but most do not. Most people today think mostly about getting rich quickly (so cannot or do not see the bigger connection to other areas of the company), and have no intention of staying long term with a company.

Business schools foster that attitude. They are the last bastions of Pragmatism and it has had a terrible effect on business.

In that Management 101 class I mentioned, we did a computer simulation of a manufacturing company: sales forecasting, ordering of raw materials, allocating workers, shipping product, etc. My "widgit company" was profitable over the entire simulation but I only got a "B." The reason was that I had ordered raw materials in the last quarter and the professor said that was a bad move. I objected saying, "If I don't order the raw materials, what will they make widgits out of next year?" The professor cooly replied, "That's not your problem. If you don't order raw materials, your bottom line will look much better and you'll get promoted. Then how to build the widgits will be someone else's problem."

Share this post


Link to post
Share on other sites
Have you read many books on great companies or people? If you have, have you read them looking for the fundamentals that all of these companies or people applied to achieve the great wealth that they produced?

Ray

You ask if I’ve read many books on great companies or people. The answer is ‘yes, many’.

You then ask if I’ve looked to discover the fundamental success-drivers of these companies/people. Ray, I can’t imagine any other reason for reading such books.

You seem to think that I would benefit from a more complete understanding of management fundamentals. Can you tell me, in what areas you believe my understanding to be lacking, and why exactly it is that hold that opinion?

In previous posts you pressed me for a concrete example of the application of the Theory of Constraints, which I provided (the GE example). I note that you have not commented on this example so far.

You now claim that ‘my theories are nothing more than a band-aid’ that do not impact on business fundamentals. Can you revisit my example and confirm that the problem that I reference is indeed superficial? And, if you see fault in my proposed approach to the resolution of this problem can you explain why and propose a alternate solution?

Business management is my profession (I’m both management consultant and a business owner). Accordingly, I have no interest in trading in vague generalisations in this particular subject area.

By the way, thank you for reminding me to purchase Edwin Locke’s book. I’ve been intending to do so for a while.

Justin

Share this post


Link to post
Share on other sites

Justin,

I can think of many other reasons to read books on great wealth creators, one of them being that they are inspiring. Reading about someone like John D. Rockefeller, Sr., Sam Walton, Andrew Carnegie, Jack Welch and so many more that have been so productive is beneficial in many ways. When it comes to the purely technical books I still get excited as the information allows me to gather further insight that enhances my life.

The reason I asked what you have read is becasue all I have seen you recognize as worthy of change or of importance is the item that is "constraining" your companies efficiency short term. You have not recognized my questions from my earlier post on how a consultant would even know how to diagnose what areas of the company were restricting progress. I have also not seen you acknowledge that for a company to become a leader in their field they would need to incorporate and integrate all the fundamentals, which is not what you are selling nor have I seen you list any. It would be like me telling my clients that they can achieve great progress by just incorporating one of my fundamentals, it just will not work long-term. Seeing how you are not selling all the fundamentals needed for a business to enhance themselves long-term, I only see your theory as a band-aid, short-term fix. Finally I did not say that any of your companies problems were superficial, I just do not think that your Theory of Constraints will change a company fundamentally.

The primary reason I did not discuss your example from GE is that there was no information on GE in your linked page. And you did not give a concrete example of anything productive as you wrote, "I have just returned from Chicago, where I ran a workshop for a group of executives from a GE division." I would not call a workshop a productive benefit. I also gave an example of GE when Jack Welch was the CEO who was one of the most productive CEOs of all time. While Jack Welch was leading GE he actually did the things that I mentioned in my earlier post and kept everything within GE. If GE has fallen to the point where they need outside people to tell them how to lead or run their own company, then they have quickly lost what Jack Welch took 20 years to build.

By the way I am a business owner also and although I do not manage people right now does not mean I have forgotten or not learned anything since I left the Marine Corps.

Share this post


Link to post
Share on other sites
The reason I asked what you have read is becasue all I have seen you recognize as worthy of change or of importance is the item that is "constraining" your companies efficiency short term.

Yes, that is true. That which constrains your company in the short term also constrains it in the long term. Unless, that is, you figure you can get to the long-term without first passing-through the short-term!

You have not recognized my questions from my earlier post on how a consultant would even know how to diagnose what areas of the company were restricting progress.

In a ideal scenario, the constraint would be the resource with the queue of work-in-progress up-stream from it. However, in an typical environment where management has tried to balance capacities (perhaps, by encouraging all resources to work flat-out all the time) you'll find queues of WIP inbetween all resources. In this case, you're better off deciding where you want the constraint to be -- which is an interesting discussion in and of itself (because it provides the linkage to organisational strategy) -- and deliberately adding capacity to all other resources so the constraint shifts to where you want it to be. To do this without blowing-up the organisation, you'll need to deliberately throttle the release of work in the first instance (until all the WIP dissapears) and then synchronising the release of new work with the rate-of-work of the constraint.

I have also not seen you acknowledge that for a company to become a leader in their field they would need to incorporate and integrate all the fundamentals, which is not what you are selling nor have I seen you list any. It would be like me telling my clients that they can achieve great progress by just incorporating one of my fundamentals, it just will not work long-term. Seeing how you are not selling all the fundamentals needed for a business to enhance themselves long-term, I only see your theory as a band-aid, short-term fix. Finally I did not say that any of your companies problems were superficial, I just do not think that your Theory of Constraints will change a company fundamentally.

If you failed to engage a neurologist in a discussion of nutrition it does not necessarily indicate that the specialist believes that food is non-essential; it may simply be that he does not have a special interest in this subject.

This thread is not about how a company becomes a leader in its field. It's about the relationship between local activity and organisation-wide results.

The primary reason I did not discuss your example from GE is that there was no information on GE in your linked page. And you did not give a concrete example of anything productive as you wrote, "I have just returned from Chicago, where I ran a workshop for a group of executives from a GE division." I would not call a workshop a productive benefit.

Ray, the example is here: http://forums.4aynrandfans.com/index.php?s...ost&p=54278 Please review it an answer the questions in my previous e-mail.

I also gave an example of GE when Jack Welch was the CEO who was one of the most productive CEOs of all time. While Jack Welch was leading GE he actually did the things that I mentioned in my earlier post and kept everything within GE. If GE has fallen to the point where they need outside people to tell them how to lead or run their own company, then they have quickly lost what Jack Welch took 20 years to build.

Are you sure of your facts, Ray? In a quick Google search, I discovered that in 1998 alone GE, (under Jack) spent $400 million on Six Sigma. I haven't researched how much of this was spent on external consultants, but I'm prepared to wager that (over 5-10 years) it's a significant amount. As I'm sure you know, GE didn't invent Six Sigma.

By the way I am a business owner also and although I do not manage people right now does not mean I have forgotten or not learned anything since I left the Marine Corps.

I have no interest in the content of your CV -- only the content of your mind!

Justin

Share this post


Link to post
Share on other sites
But my focus has been on improving final results, including competitive results. Analysis of an optimal system should include the corollary problem of how to improve its output by modifying its parameters - or perhaps modifying the way the system works entirely in order to better utilize resources.

I'd be interested in seeing if I can get my head around the problem you reference above. Can you elaborate; perhaps in a new thread, if appropriate?

Justin

Share this post


Link to post
Share on other sites
The reason I asked what you have read is becasue all I have seen you recognize as worthy of change or of importance is the item that is "constraining" your companies efficiency short term.

Yes, that is true. That which constrains your company in the short term also constrains it in the long term. Unless, that is, you figure you can get to the long-term without first passing-through the short-term!

In my opinion your comments here are a contradiction to Objectivism on a deep level. An Objectivist approach would not have a dichotomy between the long-term and short-term, any "constraint" applied would apply to both equally and for the same reasons. Your method sounds to me more like empiricism and hedonism (as it would apply to business) than Objectivism.

Share this post


Link to post
Share on other sites

Justin,

I would like to start by saying that I had red your post that you linked to but missed it in my review. With that said I would like to add that I see a list of problems (which I did not say they were superficial), and only recommendations for overcoming them. If GE implemented your ideas, you have not listed the productive gains as of yet. I would further like to add that I am not saying that allocating, shifting or utilizing one's resources is not beneficial. I am saying that it is only a piece of the pie.

I am not sure on what GE spent money of for training nor how they exactly define consultant training. But I can give you some insight into what Jack Welch thought and did while at GE using his book Jack Straight From The Gut.

Jack Welch believed that a great company had to be made by great people. With this in mind and not long after becoming CEO he implemented a plan that he coined as "The People Factory." He hired an outside MBA who "was well schooled in hard knocks." She was also one of only a handful of people brought in from "outside the company." This womans main job was going to be divising a way to differentiate the 304,000 workers at GE. The plan was applied by forming 3 gourps which each employee would go, A, B and C. I have already written about these three gourps and the 20%, 70% and the bottom 10%.

The above mentioned evaluation process had many company benefits. One of those benefits is that the 2 upper gourps would be sent to training in accordance to their evaluation. This is group A went to certain leadership courses and group B went to different leadership course. These courses were held at the totally re-made Crotonville Training Facility. Jack Welch spent millions on re-making this facility into a world class learning enviornment. The main reason for this facility according to Jack Welch was to spread ideas, "in-house consulting" is what he called it. GE sent literally hundreds of people to 3 week courses 608 times per year. This number alone would generate a large amount of funds to support. Jack Welch also made it a requirement that people had "grants" (company stock), before they could be signed off to go, which I think further shows he liked to keep it "in-house."

Now back to the thread.

The thread and the question in the title is "getting managers to think long term", and not how to properly allocate resources. You have changed the question and then given your theory and the panacea for all problems. I have listed out what I think is needed to get people to think, integrate and act as one cohesive unit. You keep pushing your theory of constraints while discarding the bigger picture. The problem is that you have to have people that think long term and act in accordance with the long term objectives to understand how to properly allocate their resources to maximize benefit. This cannot be accomplished without teaching the people the rest of the fundamentals of business, the whole pie.

To get a group, project or company to grasp the big picture and then agree to work toward it they must be educated and agree with all the fundamentals not just how to properly utilize their resources. In all the companies I have reserched that have made great wealth and or been around a long time they all had three traits.

The first trait was and is a long term vision of where they wanted to go. Of course the vision can be adjusted as advances in specific fields dictate. But without a long term goal/vision the companies personnel will not know how to properly allocate/utilize resources to maximize profits and efficiency. The next trait that I see as being needed is a strategy on how the vision is going to be achieved. Different companies will have different strategies to fit the nature of their business. But, unless the companies personnel agree with the strategy and the vision they will work in a counter-productive way. The last major trait I see as being needed is execution or action. A company could have the best vision and strategy and still not perfor well because of a lack of execution.

How does one go about applying these traits in their company? Once the owner of a business or even a project manager has formulated the direction of vision they have to have people that agree with the vision and can grasp the larger picture. If a person does not see the large picture they will constantly keep acting for the short term benefit. This is what causes manager to act in a way that produces their numbers to look good while the company itself goes under.

The best definition I can come up with for a business strategy is; the science of employing one's resources to maximize the obtainment of the goal or vision. Again you can see that a proper strategy would be devised with the long term goal in mind while utilizing the companies resources in such a way to maximize productivity and profits long term.

The final trait that needs to be applied is action. Before taking action the manager or other personnel should have asked the question of "action toward what?" The answer should be, "toward the long term goal in accordance with the most efficient utilization of company resources." A person that takes action with no long term goal to direct them will constantly act in a contradictiory manner, sometimes making progress but then taking actions that cancel out any ealier benefit.

Companies that apply all three of these traits are the ones that achieve the most productivity and wealth. But to do this they must have a vision of the long term goal. Then the company must devise a strategy that employs the maximizing of their resources in the most beneficial manner to produce long term wealth. Lastly the company has to execute the integrated strategy toward the long term vision, objective or goal. To act without all three traits might create short term gains in one area of the company while other areas fail or faulter which shoud show that all three traits are needed.

Share this post


Link to post
Share on other sites
The reason I asked what you have read is becasue all I have seen you recognize as worthy of change or of importance is the item that is "constraining" your companies efficiency short term.

Yes, that is true. That which constrains your company in the short term also constrains it in the long term. Unless, that is, you figure you can get to the long-term without first passing-through the short-term!

In my opinion your comments here are a contradiction to Objectivism on a deep level. An Objectivist approach would not have a dichotomy between the long-term and short-term, any "constraint" applied would apply to both equally and for the same reasons. Your method sounds to me more like empiricism and hedonism (as it would apply to business) than Objectivism.

Shayne

How can you possibly accuse me of proposing a short-/long-term dichotomy when in your quote above I correct Ray on exactly that error?

As for your other accusations, would you mind either providing the basis for these or retracting them?

Justin

Share this post


Link to post
Share on other sites
I would like to start by saying that I had red your post that you linked to but missed it in my review. With that said I would like to add that I see a list of problems (which I did not say they were superficial), and only recommendations for overcoming them.

Why would you expect otherwise? You asked me to provide an example of a situation where the maximisation of a local resource damaged the performance of an organisation. I think I provided exactly that.

I am not sure on what GE spent money of for training nor how they exactly define consultant training. But I can give you some insight into what Jack Welch thought and did while at GE using his book Jack Straight From The Gut.

I'm sure we've all read that book. Your point was that GE didn't use consultants under Welch. Clearly, he did.

The thread and the question in the title is "getting managers to think long term", and not how to properly allocate resources. You have changed the question and then given your theory and the panacea for all problems.

Please indicate where I have claimed that TOC is the "panacea for all problems".

Ray, this debate began when I claimed that most resources in a healthy project environment must have idle time (for the environment to remain productive).

I have clearly explained exactly why this is the case (and you have not found fault with my argument).

You challenged me to present a concrete example of a case where an individual can compromise the organisation by maximising his rate-of-work. I did that (the GE example).

You argued that the kind of organisations that you respect (GE, the US Marines, etc) would never implement a theory like this. I provided you a list of major organisations (including the US Marines) that have performed *major* TOC implementations (often with staggering results).

You have argued that the solution I advocate is a band-aid that has no bearing on business fundamentals. I think it's clear from the cases that I have referenced that this is not the case.

You have attempted to expand the scope of this debate to general business management. I have resisted this attempt because I have nothing to contribute to that discussion.

My feeling is that we can probably conclude this particuarl debate now.

I should point out that the Theory of Constraints is not my theory. TOC was created by Eli Goldratt (an Israeli physicist). He popularised it in his book The Goal, which now is one of the best-selling business books of all time (recommended reading for most MBA and accounting students, the world over).

Justin

Share this post


Link to post
Share on other sites

Justin,

I disagree with you on almost every point of your last post for reasons that I have already stated. But, the primary one is that your ideas have no context unless tied to the larger scope of proper business management which you fail to acknowledge. One of those aspects is that you could not even know where to shift your resources to (or constrain as you call it), without knowing what the business' long term goals/vision were. Short term progress does not always mean that there will be long term growth.

I do agree that we have said enough and I will leave you to your theory and its popularity with people that have most likely never even run a business. (I have high school and college acquaintances that have business degrees and MBAs and they still fail terribly because of their rationalizations. Your book and whoever reads it does not impress me.)

Share this post


Link to post
Share on other sites

My two cents: It seems like giving the idea (TOC) some attention would not be a bad thing, especially if there is a fault, in some business environments, of emphasizing the increase of individual productivity, while failing to attend to [what John Allison has called] building win-win relationships.

Allison discussed the distinction between the short-term strategy which some people take, of sacrificing others to self, and his preferred long-term strategy of building win-win relationships. If managers focus on and reward only employee achievement of individual goals, some employees may achieve these goals at the expense of building long-term win-win relationships (with customers for instance) -- and the manager may end up achieving the opposite of his goal of increasing overall efficiency.

Here is the link to John Allison's discussion of his business philosophy, which was originally linked in another thread, and is well worth listening to.

In the interview, Allison mentions meeting people who were financially successful, but unhappy, because they got rich at others' expense. So it's not as if the strategy of sacrificing others to self does not exist in business. It does, and sometimes it "works" for acquiring money (at least for a while). But it's an unethical strategy, bad for the sacrificer as well as his victims, and (worse) this strategy may (unwittingly) be encouraged by managers who focus on individual productivity goals without regard for building long-term win-win relationships.

Share this post


Link to post
Share on other sites
My two cents: It seems like giving the idea (TOC) some attention would not be a bad thing, especially if there is a fault, in some business environments, of emphasizing the increase of individual productivity, while failing to attend to [what John Allison has called] building win-win relationships.

Allison discussed the distinction between the short-term strategy which some people take, of sacrificing others to self, and his preferred long-term strategy of building win-win relationships. If managers focus on and reward only employee achievement of individual goals, some employees may achieve these goals at the expense of building long-term win-win relationships (with customers for instance) -- and the manager may end up achieving the opposite of his goal of increasing overall efficiency.

I agree Rose.

There should be no (essential) distinction made between short-term strategy (tactics) and long-term strategy. The two should not be in conflict. You cannot sacrifice the short-term to the long-term or visa versa.

I suspect that the explicit recognition of finite capacity (which is integral -- but not unique -- to TOC) is the key to dissolving this conflict.

Traditional (pop-) management theory implicity assumes an infinite capacity universe (which is a common collectivist error). The belief is, if you maximise everything (everyone work flat-out; love, your customers, love your staff, love everyone; make money, save the environment, serve the community) then you maximise the goal of the organisation.

In the TOC world, we simply recognise that if you have a goal, you have, at any point in time, a constraint (whether you're prepared to admit it or not). Your ability to pursue the goal is directly related to how you manage this constaint (or allow it to manage you).

I cannot see -- as someone on this thread recently suggested -- how there can be a conflict between how we, as Objectivists, like to view the world and TOC. In fact, my belief is that, when I'm teaching managers to explicitly recognise that their environments have finite capacity, to dissolve the conflicts between short- and long-term and between strategy and tactics, and so on, I'm actually readying their minds for Objectivist philosphy!

Justin

Share this post


Link to post
Share on other sites