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S2/E8 - Lisa Scheinkopppf - Praising Ghosts: Constraints We Don't Know We've Accepted
18 Plays9 days ago
HOST: Jess Villegas - ACUITY Business Consulting
My guest today is Lisa Scheinkopf—author, consultant, and educator, is someone who worked closely with Eli Goldratt, author of the iconic book The Goal, to help codify what eventually became the Theory of Constraints thinking process. She later advanced her thinking on this in her book Thinking For A Change. In it, Lisa did not simply cover the operational side of constraints, but the deeper idea underneath it all: That human beings and organizations alike often spend enormous amounts of energy solving the wrong problems because we’ve unknowingly anchored ourselves to assumptions we’ve stopped questioning. It was therefore natural for the conversation to become about not only how to improve systems, but also how to think more clearly inside them. Please enjoy my conversation with Lisa Scheinkopf.
Lisa Scheinkopf Website: Jenrada.com
Jess Villegas Website: ACUITY Business Consulting
Jess Villegas Email: jess@acuitybusiness.consulting
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Transcript
What is Assumption Hacking?
00:00:02
Speaker
Assumption hacking is about figuring out whether the assumptions that we're making are valid for the situation that we happen to be in right now or not. We all make assumptions. They're either valid or they're not. They're expressing truth, if you will, or they're expressing falseness. So the key is in figuring out what it is, am I basing what I'm doing, what I'm thinking, how I'm feeling about somebody on assumptions that are true or assumptions that are not true is how I think about it.
00:00:30
Speaker
And the faster I can find out if the assumption that I'm making is wrong, rather than thinking, oh my God, I'm gonna be so embarrassed if I'm wrong, blah, blah, blah, it's better. i get it's to change course that much faster.
Introduction to the Leaders Commute Podcast
00:00:43
Speaker
Welcome to the Leaders Commute podcast. I'm Jess Villegas. This podcast considers how the experiences that keep resurfacing over the commute of our lives inform our worldview for how to lead others and, more importantly, how we lead ourselves.
00:00:59
Speaker
Its mission is to assist you to transform those experiences from passive, compartmentalized episodes into leveraged connections for better thinking and outcomes.
Unseen Constraints and Their Impact
00:01:09
Speaker
Today's episode is titled, Praising Ghosts, Constraints We Don't Know We've Accepted.
00:01:15
Speaker
There are certain books that don't just influence the way you work, they quietly change the way you see the world. For me, one of those books was The Goal by Eli Goldratt. My guest today, Lisa Scheinkopf author, consultant, and educator, is someone who worked closely with Eli Goldratt in helping to codify what eventually became the Theory of Constraints Thinking Process, or TOC.
00:01:40
Speaker
She later advanced her thinking on this in her book, Thinking for a Change. I wasn't formally trained in the Theory of Constraints ecosystem. I was really just a guy who picked up the books by Lisa and Mr. Goldratt over the years and found a handful of ideas that deeply resonated with me and tried, thoughtfully and imperfectly, to operationalize them in the businesses and leadership situations I found myself in.
Understanding Hidden Organizational Assumptions
00:02:06
Speaker
Over time, I kept coming back to the same realization. When organizations struggle, we often assume the problem is complexity, pressure, lack of resources, or even maybe people.
00:02:18
Speaker
But sometimes the real issue is something much smaller and much harder to see, such as a hidden assumption, a decision that made sense once but no longer does, or a self-imposed ceiling we've quietly accepted as reality.
00:02:32
Speaker
And that's one of the reasons I've been so excited about this conversation. In it, Lisa did not simply cover the operational side of constraints, but the deeper idea underneath it all, that human beings and organizations alike often spend enormous amounts of energy solving the wrong problems because we've unknowingly anchored ourselves to the assumptions we've stopped questioning.
Conversation with Lisa Scheinkopf on the Theory of Constraints
00:02:55
Speaker
Please enjoy my conversation with Lisa Scheinkopf
00:03:03
Speaker
Good afternoon, Lisa, how are you doing? I'm doing great, Jess, how are you? Good, good. I'm really pleased. We've been talking about getting together for a while. We had and a chance to meet a few years back on some networking thing that apparently was working well for the moment because we kept the connection and I've enjoyed it.
00:03:19
Speaker
Also, I think about the time that we started talking, you were launching websites and initiatives that I think you had begun them or hadn't been into them very long. And I've been trying to watch that journey, which has been really interesting.
00:03:32
Speaker
But just to set the listener up a little bit, Through that networking, we discovered pretty quickly, which is fascinating to me, that you had a very close association with the concept of theory of constraints, and you've written a book on it.
00:03:43
Speaker
But the other side of that was just the ah association with theory of constraints but with Eli Goldratt and Goldratt Institute. And if I didn't say it at the time, this was like 30 years ago when I came across the book.
00:03:54
Speaker
And I wasn't part of a theory of constraints implementation, but I thought, wow, I sure like to talk to somebody about the theory constraints, but I don't think Eli Goldratt going to take my phone call. So I just went about my business. Not right now. He's not, no no. Just to try and be a thoughtful practitioner of some ideas. I'm the guy that bought the book and read page 73 and thought, I think I can do that.
00:04:15
Speaker
And then I read a few more pages and we did more of that. And I found it to be very successful. Even in one-offs, I understand the things that things are interconnected, right? And they're iterative. And I understand that, of course. But at least I was able to engage these things in that we could create some boundaries around the initiative.
00:04:31
Speaker
We got the benefit. Who knows if we created a problem elsewhere, but for the moment, it seemed like a successful thing to be doing. so The whole idea around constraints is fascinating. and So I'm going to let you jump into the idea about constraints. But before I do that, bear with me. I need about three minutes to just convey a short experience that I think might be informative for what we're going to talk about.
00:04:49
Speaker
So there's a story that I relayed on a previous podcast, which I titled Exposing Ghost. And I come back to it often when I think about systems, performance, and constraints. So my son ran cross country in high school. that Early on, he was a middle of the pack runner.
00:05:05
Speaker
He worked hard, he kept improving, but he wasn't one of the elite runners on the team. ah And then one afternoon before a race during the sophomore year, he told me that he was about to have a breakout race. And he said that the course was dry. It was flat. The weather was cool.
00:05:19
Speaker
He'd had a good week of practice. Other people were having personal best. He just thought this was going to be his day. So in his mind, everything lined up for that. So I asked him, well, great, man, what's your strategy? And he goes, what do you mean? I said, well, you're going to go out fast. You're going to go out slow. You got to try and kick at the end. And he says, oh, I'm just going to try and keep up with John. And I said, who's John? He goes, well, he's the guy that's ranked just ahead of me on the team.
00:05:39
Speaker
And I said, so he's faster than He goes yeah, a little bit. and I said, okay. And I go, well, why wouldn't you run with the fastest guy on the team? I was trying to give him the fatherly wisdom. And he said, that you know, dad, that sounds a lot easier than it is. as You wouldn't understand. said, that's fine. Have a good race.
00:05:54
Speaker
So the race starts. And at the one mile split, he's running very quickly. I'm realizing he is going very fast. And at the two mile mark, it's very obvious that he's going to have a personal best. So I hurried to the finish line because I wanted to be there to grade him. very happy for him.
00:06:06
Speaker
And he did caught cross the finish line with a personal best. He was exhausted, but he was ecstatic. He was just going out of his mind with happiness. So rather than revel in a success, I was really curious about how John did. And he said, I don't know, but I think he just ran away from me. I just, I lost him. and I couldn't keep up with him. i said, oh, that's good good for John. So let's go find him. So when they discover each other,
00:06:27
Speaker
they start to compare their times and he realizes that he had inadvertently passed them on the course and it actually beat him by about two minutes. So John had a personal best, but Justin's personal best was two minutes faster, so he ended up ahead of him.
00:06:41
Speaker
It was just a big realization and then we just went about our solo celebration, but I said to him, listen, it looks like all you were doing was chasing a ghost. And I'd said that to him all those years ago. So that's why it worked its way into my podcast title.
00:06:55
Speaker
But anyway, over time, I realized what fascinated me most about the story wasn't the race itself. It was how easy it is for runners and leaders, organizations to anchor ourselves in assumptions and quietly shape our behavior without us even realizing it.
00:07:07
Speaker
He had ah unknowingly attach his effort to what he believed was his ceiling. And the more I thought about, the more I realized organizations often do the exact same thing. So you read a book on constraints,
Applying the Theory of Constraints in Business
00:07:19
Speaker
you have a kid, 20 years later, you got a second a data point, and now you're a theory is a constraint devotee. And that's kind of where I'm at. I'd like to invite you in and let's go wherever you want to go.
00:07:29
Speaker
Well, first, what a great story. we used to have a lot of conversations with Eli about, you know, what what do you compare yourself against? You know, when you think about the concept of ongoing improvement, which is really what Theory of Constraints is all about, ongoing improvement in a very focused way.
00:07:47
Speaker
Do you compare yourself to your competitors or do you compare yourself to yourself? And the idea was, while we're in business, we have to understand what our competitors are offering and things like that. And we always want to be better than them. But when we're talking about ongoing improvement, it's always about how much better are we doing now than we were doing before? And then where do we set our sights next? And when we hit that or come close to that, where do we hit our sights next? And your son's story was just a beautiful example of that. Want to be better than the competitor, but he was really focused on his personal best. You know what's interesting about that, Lisa, as impactful as that was for me, it was good fodder for, you know, the picnics and the stories and the family gatherings.
00:08:30
Speaker
But there were sort of two other things that just occurred to me later on, you know, in a quiet moment. One was that John had had a personal best also. And if his strategy was successful, he would have had a personal best too. He just wouldn't have had the personal best he could have had, but no one would have known that.
00:08:46
Speaker
And so it isn't just what do you attach as your ceiling, it's whether some level of success his is one of the things that's actually limiting you because you haven't got all the variables to get better. But the second thing was,
00:08:59
Speaker
It's one thing to be fatherly and give all kinds of wisdom. And I don't remember how many mentors I've had at work, but I think I could be the middle of the path in business, but I don't know, know, is the guy in front of me, John?
00:09:11
Speaker
Does it really matter? Cause now you bring me back to another piece of this is it's really all about what's the goal. And your son's goal wasn't necessarily to win the race. Your son's goal was to have his personal best.
00:09:27
Speaker
And in our corporate lives, so many people set the bar for themselves or their teams or their businesses way lower than they're capable of.
00:09:40
Speaker
And one of the reasons for that is, well, people are afraid to fail. You set a high goal and you don't achieve it. You feel like a failure rather than thinking about what's the journey that got me here. If I could set a goal that's really, really high, like,
00:09:55
Speaker
just beyond the limits of what I think is possible. So it's it might be achievable, but man, I'm going to really need to stretch to get that. And if you don't quite get it, but you set yourself on the path to really go after it, that journey is going to be amazing.
00:10:10
Speaker
You may even surpass your competitors without realizing it because you were focused on this big goal that was super inspiring, whether it's for you yourself or whether it's for your team or your organization. But we don't do that because we feel like we'll be punished if we don't get it.
00:10:28
Speaker
All too often, even in our businesses, we say we're going after a certain target and suddenly that target now becomes a commitment. And not reaching the commitment means that you did something wrong.
00:10:41
Speaker
And so we just kind of scale it all back to get to something that we think is super doable that when I come out the other end, like, whew, okay, I accomplished it. I'm not a failure.
00:10:52
Speaker
This is one of the newsletters I'm coming out with soon is is going to be about all the time we spend on on defending our budgets and defending on our actual spending versus our budget and stuff like that. And it's what a waste of But if you got to be in the motor, all you're doing is is working hard to defend what you did. That's that's not healthy. so I think there's an entire cottage industry in creating budgets that have, I think the term is sandbagging, right? So you make the goal achievable so that you can claim victory at the end, even if it's not the best you could do.
00:11:29
Speaker
Yeah, it exactly. Anyways. Where do you want to go from here? well well look You've got my mind churning, so now help us focus. I guess what I'd like to maybe just start generally and then you can drill down wherever you like, but just the idea of theory of constraints. Like, I think it's poetic. It's a poetic sounding phrase to me, but not to anybody ever talked to you. Someone says, you know, why do you say that? it's says Well, I'm thinking more along the lines of theory of constraints and And then, of course, now I've lost them mostly because i don't understand it as well as I'd like to.
00:12:00
Speaker
So just talking generally about theory constraints and the listener walks away with a better understanding. So i'm assuming that most of your listeners are coming from the world of business. So I'll talk about it from ah from an organizational perspective.
00:12:13
Speaker
There's always a goal. Even if you simplify the goal to what Eli Goldratt said in his book, The Goal, even if the goal is make more money now as well as in the future, if the goal is be able to serve more and more customers profitably, whatever the goal is, you've got one.
00:12:30
Speaker
Ought to be aligned with the purpose of your business, but there's there's some kind of goal. In order to achieve that goal, let's say the goal is something as simple as as I'm a hospital and my goal is to get the patients that come through the hospital out the other end healthy as quickly as we can help them do that.
00:12:49
Speaker
Or if I'm in a manufacturing operation and my goal is to produce the products that our customers are ordering in a way that we're delivering to them reliably and we're making money at the same time. I remember meeting a woman by the name of Kristen Cox who who was for many years head of operations or office and budget for the state of Utah. And she latched on to theory of constraints when she was heading up their unemployment division, their unemployment department.
00:13:18
Speaker
And so one of her goals was how quickly can we process unemployment claims? Because our customers are these people who are really needing their unemployment checks and and needing to you know get reintegrated and and do whatever they needed to do. And so she used TOC.
00:13:35
Speaker
This, okay, my goal is i really want to get the claims processed as quickly as we can so that we can help our citizens do what they need to do. and And when you think about processes, so we have goals and we have processes that are in place in order to deliver on those goals.
00:13:53
Speaker
When we're organizations, we're an organization because it doesn't take only one person to be able to produce, sell, develop, deliver, do all the things that it takes to get to our customers what they need and then get the money paid back to us. When we think about that, that it's an integrated processes that take various people and departments and resources to get things done.
00:14:17
Speaker
we're doing all kinds of things, then then we quickly, if we think about it, we can quickly realize that not all of our resources have the same amount of capacity, no matter how much we try. Not all tasks take exactly the same amount of time every time they're done.
00:14:33
Speaker
ah So we have these two conditions in place, dependency. So one step needs to come before another needs to come before another. and variability.
00:14:44
Speaker
So not everything is always gonna take as long as it says in the routing or in the project plan. And the moment we have those two things together is the moment we can realize that there's always going to be one thing and pretty much for the most part, one thing only.
00:15:01
Speaker
that's limiting the rate at which we're able to deliver whatever it is our process or set of processes are are there to deliver.
Identifying and Managing Key Constraints
00:15:10
Speaker
And what theory of constraints does is it takes us through a very specific sequence of steps. It says, okay, what's the goal?
00:15:19
Speaker
Now that you have the goal, what's the constraint? So the first step is identify the constraint. What's that one thing that if only we had more of it, we'd be able to go at a faster rate. We'd be able to deliver more.
00:15:31
Speaker
of whatever it is. Once we figure out what that is, it's kind of like we used to use the analogy of a chain. So think about I'm holding my hands up. So I've been making you imagine a chain. I'm holding a chain from farthest link to farthest link.
00:15:48
Speaker
And there's only one thing that defines the strength of any chain. Let's say now you start putting weights on top of this train that I'm holding top. At what point is that chain going to break?
00:16:02
Speaker
It's going break at the weakest link, right? And let me make sure I'm protecting it. Same thing with this. we had more of that, we'd be able to deliver more. And so identify what that is. It might be a machine. It might be cash. It might be some kind of engineer. It might be, you know, whatever.
00:16:19
Speaker
But whatever it is, I have some clients where the constraint is the number of customers that are coming their way. So if that's the one thing you need more of, the one thing we need more of, we got enough of everything else. I just need more customers.
00:16:33
Speaker
What do you do with the ones that are already knocking on your door? You better take good care of them. Don't waste them. If you have a process that they say, hey, I'd like to get a quote XYZ part.
00:16:47
Speaker
And if your quoting process takes three days, they're gonna go away and go to someone else who could give them the price in one day. So don't waste the thing that's limiting your ability to do more of what you're in business to do.
00:16:59
Speaker
and In Eli book, The Goal, it was a machine, right? It was ah the NCX 10 machine, if I remember correctly. But it could be whatever it is, it is. um Businesses that are very mature in theory of constraints make decision about what is that thing.
00:17:17
Speaker
I used to have a client, they manufacture very, very large forgings. And for them, the thing that they decided really needed to be their, I'll say their strategic constraint, were their forging presses.
00:17:32
Speaker
They would cost in the seven figures. you If you want to get a new forging press and make sure that it's able to work and the stuff that goes around it, you need a new building, you need all kinds of engineering.
00:17:43
Speaker
They cost millions and millions of dollars. So you're going to spend probably more than $50 million dollars to get one of those things in place. Now, what do you want to do once you get something like that? I mean, they had lathes. It would cost a million. They had plans. I mean, they had other things.
00:17:59
Speaker
But the biggest investment was always the forging press and what was needed to put it in place. So they needed to design their whole business around. Once we put one of these in place, it's going to take a while to fill up its capacity.
00:18:13
Speaker
But if we treat our business like that's the one thing we want to make sure that we're always... utilizing as best we can, then everybody's focused on how to help keep that forging press working on forgings that are sold, ah right? Which means now sales needs to go sell more and more.
00:18:31
Speaker
Business development needs to be developing new markets. Engineering needs to be figuring out new things, but it was all wrapped around the one thing that made the biggest difference for the business. It's interesting, I was dropped by a private equity group into one of their companies in the fund.
00:18:48
Speaker
And before I learned much about the business, the first thing I was very clear on is that, look, we're not putting any more money in this company. Yep. You're there, we're not gonna blame you for the problems because you we're dropping you in today in the middle of the river.
00:19:02
Speaker
We have set aside X amount of money that we're gonna infuse one more time at your direction, but it needs to be strategic because this is it. But in that moment, without telling me anything, the first thing they told me is a constraint is cash and maybe it isn't, but without having more information, I assume the constraint's gonna be cash because everything else will die.
00:19:21
Speaker
Now, I might find that somebody was stealing $100,000 a month and I found the guy and now cash is not the constraint. It's a different constraint. But what was fascinating to me is that I thought, okay, everyone's going be thinking about cash.
00:19:35
Speaker
And as we started to organize around how to deal with that, one of them was, We have so much money tied up in inventory, right? It's a very rich area for opportunity and inventory, right? But if you think about mainly from a cash standpoint, now you're talking about SKU rationalization and you're talking about, we just need to buy less of that. Why do we have so much? And there was a number of things. Yeah, and the faster we can turn it. It doesn't mean we have to do without. It just means we need to turn it faster. That's right. So I said to someone, we just need to turn our inventory faster. I think I read that in a book. That's what we're going to do. We're going to turn inventory. Okay. What is the industry standard? but We're half of the industry standard. We got to do better.
00:20:10
Speaker
But the thing that was really interesting was that once we got a hold of the cash and then started putting policies in place for how not to overspend on inventory, and one of the reasons they were overspending inventory, because it seemed very attractive to get free freight,
00:20:23
Speaker
from a company that would ship overseas, but only force us to take three crates of stuff at a time when we only needed one. Okay. And then we started turning that inventory, but this is the part that was kind of interesting to me.
00:20:35
Speaker
That constraint opened up more cash, but then we had less inventory, which means you we had to hire less people to to run into the stuff with the forklift and less people to move it around and store it and less people to pull it and to pick it.
00:20:48
Speaker
And all of a sudden, we were trying to actually find the next constraint. And we didn't really identify the next constraint until we found that we couldn't increase our inventory terms any faster.
00:20:58
Speaker
And then you start saying, all right, now now we have to look somewhere else. Now, I'm not so sure we shouldn't have found another constraint more quickly, but that was the dynamic that we were kind of working with, and I thought it was really interesting. Yeah.
00:21:09
Speaker
Yeah, that
The Five Focusing Steps in the Theory of Constraints
00:21:10
Speaker
is interesting. And so we're going around really quickly around the five focusing steps and your audience could probably benefit from hearing what these five focusing steps are. The first one is identify the constraint. We talked about that, right? In your example, it was cash.
00:21:24
Speaker
In my example, sometimes they had their lathes and whatever. In other examples, it might be. So if you're an engineering company or even a software company, very frequently you'll find the bottleneck is the person with all the knowledge. So where is everything backed up and the answers that we need from that guy? And so so now once you figure out what it is, the next question is, in Eli's words, it was decide how to exploit the constraint, which is really how do we best utilize this so that we can help it truly be focused on the things that it and only it can deliver for our organization. So if it's somebody with all the knowledge,
00:22:09
Speaker
Well, what other kinds of things are they doing? Because it might be embedded in steps that they need to take to do something where really somebody else could do that. um This is something that frankly, a lot of physicians offices and hospitals have found What if the constraint is the doctor or the constraint is the surgeon, how much time do you have them writing down all the charting notes?
00:22:34
Speaker
So very frequently you'll find now they've got somebody else in the office with them who's actually doing the note taking, or you'll find that they're asking you for permission to record so the transcription service can take over doing the charting.
00:22:48
Speaker
frees up the time of the constraint to do the doctor things that they're really good at. the interesting thing is, is that most of us, once we figure out what's the thing that's holding us back, we tend to jump toward gotta buy more of that.
00:23:04
Speaker
So I'll have clients, for example, where the constraint really is in the number of customers that they have. And so think about organizations that pay to get leads to come their way.
00:23:17
Speaker
Well, the number one complaint is we don't have enough leads. Well, let's take a look at what your conversion rate actually is. You're getting leads in, you're getting people knocking on your door saying, I'm interested in doing business with you.
00:23:30
Speaker
For every hundred of those that you get in, how many are actually buying? but you know, in different industries, there's kind of different standards that you might think about. But if there's only a few of those, then maybe there's something in your process itself. Maybe you don't really need more leads. Maybe what you really need to do is examine what are you actually doing with these people when they're coming in your door that you're turning them away?
00:23:53
Speaker
and And you come out of an operations kind of background, right, Jess? Yes. Think about the manufacturing operations that you've been involved in. Have you ever seen a manufacturing operation that accepted as well, that's just the way it is at 20% yield, a 5% yield? No, it's like no time for quality processes to go on here. Well, same with sales.
00:24:14
Speaker
Yeah. We just say, oh, that's okay. That's just the right top of funnel, bottom of funnel. No, top of funnel is so wide, bottom of of funnel is so narrow because we're not taking care of the ones that are coming to us. So before you tell me you need no more leads, I'm going to tell you, show me how you're dealing with the ones that you have.
00:24:32
Speaker
I think a parallel to that, I'm like a lot of guys I come in, i i think I know what some of the major issues are, but while I'm getting understand them, you wanna make an impact. And went to an operation and I realized we were spending a lot of money on a warehouse.
00:24:44
Speaker
And but I don't know for sure that we didn't need a warehouse, but I knew for sure we didn't need that much warehouse. So I think I put something out there and said, listen, the lease on this thing is gonna come up within end in the end of December, it's April, I'm not renewing it.
00:24:57
Speaker
So as soon as everyone a panics, they well, Jesse, he what talking about, he doesn't get our industry. And they may very well may be right. But one thing I didn't know is that when you go to a warehouse and then you get what are very typically things that are operation like the the junkyard, right? Or the scrap pile or the rework.
00:25:16
Speaker
And I'm thinking I knew for a fact that those three things were taking 50% of the warehouse and some of that stuff was scattered around the main production also. Yeah.
00:25:26
Speaker
So, you know, that's a pretty straightforward story, but the the end of that was that I knew that at some point we were going to need to keep a warehouse, but someone eventually thought they better just rationalize why we only need 25% and really hope that I'm not just one of those guys who says, I said, I don't care. Yeah. And that worked out well. And all of a sudden I looked like I was very competent, but it was less competence than just an intuitive understanding that if you have a space, you're going to figure out how fill it. Whether it's inventory people, you're going to fill it. And generally by adding more things, you're creating more friction.
00:25:59
Speaker
one more yeah Yeah. You're creating longer processes. You're creating more service. I was just reminded, I used to work with this great guy by the name of John Covington, and we would go and visit people.
00:26:10
Speaker
plants because our business was mainly working with manufacturers. And when we would go do a visit at a plant, these are in the days of paper newspapers. So he would take the USA Today that would get delivered to to his hotel room and off we would go to the plant. And as we were walking around,
00:26:28
Speaker
he it's easy to glance at you know the work in process. So the jobs that have been sitting around for a long time or the inventory in the warehouse that you know always has a date code on it. And so he would just start putting the newspaper down on top of piles of inventory, on top of you know work in process and things like that. And eventually the plant manager would say, what are you doing with the newspaper? And he said, well,
00:26:54
Speaker
Let's come back tomorrow and see how many of these are here. He said, because here's the thing. If you saw your people just sitting down and reading the newspaper, how would you react?
00:27:05
Speaker
They're idle. You can't have anybody being idle, but look at how much of their time has been spent creating this idle work in process or buying this idle inventory.
00:27:18
Speaker
That's not helping you. and And it would just kind of drive home the point, right? That we're expending all this capacity on creating stuff that isn't moving. But then we get upset with people or if they're just standing ready, waiting for the next job to come to them.
00:27:35
Speaker
But i wanted to go back to make sure I didn't knock you off the subject because I make sure- the five focusing steps. Right, so the first one was you said to ID the constraint. Was that the first one? Did you identify a second one in there that I missed? The second one is decide how to exploit the constraint.
00:27:50
Speaker
A nicer way to say that is figure out how to get the most of its special sauce used. The third is now that you've made your decisions on how to best utilize this thing that's most limiting your business from being able to generate more of what it's there to do.
00:28:12
Speaker
Everything else needs to subordinate that. So the third step is subordinate everything else to the above decisions. The decision on what's the constraint and the decision on what are going to do with it.
00:28:23
Speaker
If I go back to the chain analogy, it's like, okay, we've got one weakest link. Now we've decided what we're gonna do with that. What's the job of all the rest of the links? Protect that one. If I'm thinking about a ah linear process, the job of everybody else is to get to the constraint, what the constraint needs, when it needs it, in good shape,
00:28:45
Speaker
So if I'm downstream from the constraint, my job is pull from that constraint and get it turned into sales and throughput quickly, efficiently, effectively, and that kind of stuff. So everything is around, what are we doing with the constraint in order to be able to be aligned with the goal of our business? And now everything else is synchronized to that.
00:29:08
Speaker
Yeah, thank you. That's the one I think I'd miss. So that was the third one. And that's the hardest step, by the way. Again, I'll stick with a very simple manufacturing operation. And let's say you've got five processes, okay?
00:29:19
Speaker
Five different steps and each of those steps is done by a ah different resource with different skills. The first one in line is able to process whatever it is at a rate of 100 an hour.
00:29:31
Speaker
The second one can do 80 an hour. The third one can do 60 an hour. The fourth one can do 80 an hour and the fifth one can do 100 an hour. What's your system able to output? To the constraint. 60 an hour.
00:29:44
Speaker
But if my goal is to keep every one of these five resources completely busy, I'm going to be releasing work in process into the system at the rate the first one can do it. So I'm going to be loading up my operation at something that 100 per hour can handle. Okay.
00:30:03
Speaker
All I'm doing then is creating work and process. All I'm doing then is just spending money. But what happens when I synchronize these together, it means the one who's able to do 100 per hour or 80 per hour that are feeding the constraint,
00:30:18
Speaker
I'm going to limit them to only an input flow of 60 an hour. When they get something to work on, I don't want them to slow down. I want them to go as fast as they can and move up their getting to the next place in the process so that everything is showing up at that constraint.
00:30:34
Speaker
But if they've been measured based on their utilization, For example, if everybody's always looking for, you better be busy or there's a chance you're gonna get laid off, then they're gonna slow everything down to only be at the rate of the constraint, which won't get the constraint fed the way you need it.
00:30:54
Speaker
um but But everybody else is behaving like the firefighters in the fire station, right? What are they all doing? Until a fire alarm goes off,
00:31:05
Speaker
They're hanging out waiting. They're cleaning the truck. They're making sure everything is ready so that when that fire alarm goes off, they're ready to go. But outside of that, they're cooking food. They're cleaning the truck. They're playing cards. They're doing training. They're doing all these other things, but they're right there ready to jump on. We want all of our resources to be like that.
00:31:27
Speaker
When you get it, you're on it. You're focusing on it. You're finishing it as quickly as you can with high quality. Don't slow yourself down, but you got wait for what's coming to you because everybody can't be 100% busy all the time.
00:31:43
Speaker
So one thing that's interesting to to me is that when you're misaligned, there's cost to that, right? And feels like a little bit of an na abstract concept, but you know there's cost, even if you say to yourself, well, ah there's money sitting in the work in process. If you don't have the work in process, then the money's not sitting there. So a lot of people see cost as something you expend to generate something, but cost is also the underutilization of a resource, right?
00:32:11
Speaker
I think, I don't know if that's too blind. But I'll also throw something in there, Jess. We think most about people as a cost. And it's people that we always want to see busy 100% of the time.
00:32:24
Speaker
And so then we use those people to operate equipment, to do the things, to consume some raw materials, and to create work in process, whether or not it's sold. So all we're doing is wasting that capacity. If if we agree that we have variation in capacity and we have variation in process and right stuff happens, then we cannot afford to not have protective capacity.
00:32:54
Speaker
But we don't think about it that way. We only think if people aren't busy, it's waste. It's not. It's not even extra cost. It's necessary investment if what I want to have are smooth processes and excellent delivery to our customers.
00:33:09
Speaker
So a lot of times these concepts, and I'm just going to wander here for a second. lot of these concepts are the way you've explained them, that makes sense, right? So of course, you've got a very willing student. but Yeah, I need to get to step four to remind me. get But even as a willing student, and even as someone who has some experience on this, I would gravitate first to the thing is, look, the reason it's not a good idea to to force everybody to be busy is for exactly the same reason noted.
00:33:38
Speaker
But it's almost like it's a negative reinforcement, right? It's like I want to force someone That's not a good word, but I want someone to focus on the fact that, look, if you don't do anything else, walk around and make sure everyone's not just not being busy for the sake of it. And I think maybe that's in its most simplest terms, that's an acceptable thing to do in the short run.
00:33:58
Speaker
The other side of that is more on the positive side, is explaining what happens when you don't expect that. And of course, that's going to be more throughput, right? More velocity through the system.
00:34:10
Speaker
And it almost seems like it's hard to explain and show that than it is to talk about what the constraint looks like as opposed to what happens when the constraint is resolved. And I don't know, who is that a typical TOC situation?
00:34:21
Speaker
Oh, there's all kinds of simulations that can put you through the ringer so that you can really see and feel what it looks like. On the positive side of that, and I think especially these days, while we have all kinds of online learning opportunities available,
00:34:36
Speaker
So helping people grow in in the times that there may be a lag between when they've just needed to work on something and and when they're waiting for the next task.
00:34:47
Speaker
Which, by the way, when you get into real world, it's not like people are sitting around for days or hours with nothing to do. It might be a matter of a few minutes or an hour or that kind of thing.
00:35:00
Speaker
Are there online courses that you could set them up to take? Is there cross training? What a great time to do things like 5S, where you can do something and then put it down, right? If the job comes, now you can put it down and you could get back to that. So what are the things that are okay if you start on it and then put it down for a bit versus, no, I've got to get something to or from the constraint?
00:35:22
Speaker
What was number four? Step four. So these first three steps got us to the point of having, I'll say, a humming system. We're doing the best we can with what we have.
00:35:34
Speaker
And step four is to elevate the constraint. So if I didn't have enough of this type of engineer, now's the time to get more. If I truly don't have enough leads, now's the time to pay for more.
00:35:47
Speaker
So if I truly needed another machine, now's the time to get another one. All too frequently, we go from identify to elevate, and we don't think about, am I really using what I have to the best of our ability to utilize And that, to me, is the biggest waste.
00:36:06
Speaker
I have said to people, I have a very difficult time seeing something that's underutilized, whether it's a process, an individual, a space, and a house. It's just very difficult for me to see something underutilized. I'm not sure if I'm quite aligning with what you're saying with the the last item, but it feels like that's at least a good place to start, right? Now, maybe some things could be underutilized because that could be me thinking, well, something needs to be happening in that space, but that's just like keeping people busy, right? Yeah, and what we see is a lot of busy.
00:36:39
Speaker
And so one of the things you can do is just ask people. So there's got to be ways in which the system is wasting your time. Like you might go to a manufacturing operation and you'll hear machinists say, why in the world do I need to walk across the plant to get the tool that I need?
00:36:55
Speaker
Why in the world do I need to go over to the stockroom? Why can't I just have this stuff delivered to me when I need it? So you can talk to salespeople. I've done some work, for example, with car dealers.
00:37:07
Speaker
And when you talk to sales folks, say, okay, what's one of the biggest things that wastes your customer's time in a deal? Like, why are you losing deals? And they'll say the amount of time that they have to wait for the finance guy to come.
00:37:20
Speaker
Like, why don't we make them wait? Okay, what are the things you can do about that? So you'll go directly to folks. They'll tell you how the system is wasting their time. And they'll probably have really, really simple solutions in mind that nobody's ever asked them for before.
00:37:37
Speaker
I'm very preoccupied with that notion recently. I've just come across different ways that that gets said simply around the fact that just the basic idea of you need to engage with the individuals in your organization. i mean, even if you don't think of anything else, but I did see it in the context of well what is lost when you're not tapping into the knowledge of those individuals. That's one thing to get the cooperation and have them be happy where they work. But what about get the cooperation, be happy with their work and then them indicate to you something that's disrupting your business, which you haven't spotted because you don't have a clear signal coming from that part of the organization.
00:38:11
Speaker
And it feels like improving that improves a lot of things. If it's not a specific constraint, it's still gonna improve the circumstances, I think. Well, wait, before I go to the thinking tools. okay um I want to get to step five and step five of the five focusing steps is a great big warning.
00:38:29
Speaker
In fact, Eli used to say, don't forget the warning with five exclamation points. ah Don't allow inertia to become the system's constraint. And the rest of that step says, once a constraint's been broken, make sure you go back to step one.
00:38:43
Speaker
But one of the things I found is that that warning is there for every step along the way. yeah and And this is kind of what you were talking about in in the story that you gave before about the cash constraints.
00:38:56
Speaker
Once you guys had plenty of of cash, if you always treated it as the constraint, you may have missed what the true next constraint of the business was. all I have a great example of this in in another manufacturing corporation. They went through a great implementation of theory of constraints.
00:39:16
Speaker
They identified what it was. They made, you know, the like the excavators that you see on the road, or if you're on the beach, you see these big machines that have sand combers on them or whatever. They made the attachments for those things so that you could do, whether it's excavation or sand cleaning or snow plowing or whatever, they made the attachments.
00:39:37
Speaker
And they had a constraint in their manufacturing process that when they went ahead and implemented and got their flow going, they were able to clear up probably a year's worth of backlog.
00:39:50
Speaker
Just were wonderful in terms of their ability to deliver to their customers on time. They got a great decisive competitive edge. They were just doing fine from a manufacturing and delivery perspective.
00:40:02
Speaker
But the constraint moved. And so now they were starting to run out of work. Like they couldn't keep the thing that they identified as the constraint busy.
00:40:13
Speaker
So they started pulling work ahead. They started looking at forecasting and trying to do things to really keep that thing busy. And they ended up trying to get us to work with this the company that had developed the software to do this, to change the software because they wanted to keep going earlier and earlier. Like, okay, if we're only supposed to release into production, say two weeks before it's supposed to be done, and I'm just pulling numbers out of, you know, where, but the the rule is we only pull it into production two weeks before the constraints is supposed to get it.
00:40:51
Speaker
And that was the rule. Well, if they don't have enough work to keep the constraint fed, they said, okay, now we want to go to three weeks. Now we want to go to four weeks. Well, the software reaches a point where it doesn't let you keep breaking that rule.
00:41:07
Speaker
Right? Now it's not a software problem. The problem is your constraint shifted and you're trying to exploit something that isn't the constraint anymore. You're trying to subordinate to something that shouldn't be subordinated to right now. So their consultant was having a difficult time with them because they wanted to get the software changed.
00:41:27
Speaker
He wasn't quite clear in his mind whether they needed the the software changed or not because they were all focused on this one area in production being the constraint. So we had a meeting and I said, look, you can look at this in one of two ways.
00:41:40
Speaker
One way is your constraint shifted. And now it's really the number of customers or the number of orders that you have. And so how are you making sure that you are really exploiting that? Are your sales processes and your quoting processes and all of that doing well and shift your focus?
00:41:57
Speaker
I said, or If the constraint that you've identified really ought to be the constraint of the business, if it really ought to be the drumbeat for everything, and I didn't know what kind of investment was involved in all that. I said, you can also keep it there, but exploit doesn't mean pull stuff ahead.
00:42:15
Speaker
Now you've got to subordinate to its needs and you're wasting the constraint if you're having it work on stuff that isn't sold in the near term. So but you still need to circle back around to sales and say, sales, the subordination is now on you. It's not about how we're using the software. It's not about changing the rules of release. It really is. If we're truly this fully synchronized company, guys, you need to bring in business and you need to bring in business right away.
00:42:45
Speaker
So pulling back to two weeks and three weeks and four weeks is really a more elegant way of creating work in process. It was. Because you don't have sales. and they weren't trying Yeah, but it really was an example of inertia.
00:42:58
Speaker
Like, okay, this is the constraint. This is how we do it. These are the rules. When the constraint shifts, you've got to examine what are the rules that we have in place. And are how well are they serving us right now? And so it was truly inertia that took over because as we sat there and I posed these questions, they were like, okay.
00:43:18
Speaker
okay it Well, Lisa, I want to do a little bit of a shift. Before I do that, I want to say back to you the five focusing steps because I think they're so critical. So there's ID the constraint, exploit the constraint.
00:43:32
Speaker
<unk>s i'm gonna now Now you're getting me because now I'm going to be very careful with the words. Okay. So ID the constraint, yes. like Number two is decide how to exploit the constraint.
00:43:43
Speaker
Decide. That's important. Okay, thank you. Okay, and then subordinate everything to the to the constraint, to the thing you decided? Subordinate everything to the decisions that have been made.
00:43:55
Speaker
Decisions, that's key And I'll tell you why his verbalization of this was critical. For example, if you've concluded that the constraint is a machine, you're not subordinating to even the people who work the machine.
00:44:10
Speaker
need to subordinate to the decisions that are made about how to best utilize that machine. If the constraint happens to be the skills held by the most knowledgeable person in the business, still need to make decisions about how to best utilize their time, about how to best utilize the skillset that they possess, they need to subordinate to those decisions. And you're not having the rest of the organization like, oh, bow down, you're now the god. We're still all a team working together.
00:44:38
Speaker
Okay, that's clear. Thank you. The next one was elevate the constraint, which is it right to say the reason you're elevating is to draw attention, raise awareness, create a culture around understanding? No, your bro more Essentially elevate is you're buying more of what you don't have enough of.
00:44:53
Speaker
That's usually what it translates into. Get more of what you didn't have enough of. Wow, I'm butchering these, Lisa. No, it's great. It's great. Then the last thing is a big warning was inertia, which you touched on.
00:45:05
Speaker
And I'm going to use inertia maybe to do a little bit of a pivot. Sure. um Before I do that, I just sort want to get at least a question out because I feel like this is something I'd like to understand personally. So I know that you've written a book, Thinking for Change, right?
00:45:19
Speaker
And I haven't read the whole book, but I'm very aware of its themes and outlines. And I'm just thinking from the journey from the the goal and however you felt about it and however your, whatever your participation was in that, to that book, is there something substantial that would be good to
Thinking Processes and Scientific Thinking in TOC
00:45:36
Speaker
understand? And I'm not trying to be provocative. I don't know if you have a disagreement there with with the premise of the goal or anything like that. I'm just trying to understand we had the goal.
00:45:46
Speaker
That was a story. yeah Your book obviously was was much more operational and tactical. and just wondering what that evolution was. So I'm gonna tie the story back to the goal. Okay. um There's different ways to look at the goal.
00:46:00
Speaker
One is the journey that the main character, Alex Rogo, went through, right? Figuring out, guided by his mentor, Jonah, figuring out what he really needed to focus on, how to get his staff with him on it, and making the incredible turnaround that they were able to do.
00:46:22
Speaker
Another view of the goal is Jonah, Alex's mentor, his former professor. And so questions tended to come up. And Eli Goldratt's goal in life was to teach people how to think.
00:46:38
Speaker
His goal in life wasn't about manufacturing. His goal in life was to teach people how to think. And that character Jonah was kind of representing him, I guess. And so another question started to surface. One question would be, how can I do what Alex did? And another question is, how can I do like Jonah did?
00:47:01
Speaker
And so the thinking processes came as a result of, so how does Jonah think? Like Jonah did a few things. Jonah taught, Jonah guided, but before Jonah was able to do any of those things well, he needed it to think differently than the rest of us. Like, how how do we do that? Yeah.
00:47:20
Speaker
So Eli had started to craft and then I was super lucky, like my timing in life was perfect because I ended up being on one of a couple of teams that he used to codify what turned into the TOC thinking processes. Said, okay, how does this guy think?
00:47:39
Speaker
First, he thinks like a scientist, ah but then are there different thought processes for where you might happen to be in figuring out what's a problem, what's a solution and how to get, and how to figure out how to get a solution implemented. and And the other thing that fit into trying to codify this way that Jonah thinks was that Eli wrote the goal and he published it.
00:48:06
Speaker
And then he started getting all kinds of inquiries like, oh, i don't remember who the company was, but this massive like project engineering company from Europe who said, we see ourselves in here.
00:48:19
Speaker
There is some kind of solution in here for us. What is it? And he's like, I don't know. There was a school teacher, fifth grade school teacher from Niceville, Florida. I see my classrooms in this book.
00:48:33
Speaker
Okay, so now we did all this, the constraint move. Now, what do we do about sales? And so the more popular the book got and the more people saw themselves in there, he started furiously writing books like Critical Chain and It's Not Luck and some of the other books that came out. And he said, I'm not going to be able to write enough books to help people figure out the specific solutions for their things.
00:48:56
Speaker
We got to figure out this way of thinking. We got to codify. He thought that he had the way of thinking. He just needed help to to codify it. And so that's what we did. And so the book Thinking for a Change was my way of trying to teach these tools that came out of all of this work that we did together.
00:49:15
Speaker
I want to refer to a term that you use called assumption hacking. Yep. And I love that term. That's kind term where I said to myself, why didn't I think of that? Because I would love to claim that because obviously the whole idea around assumptions, you know, people have very oversimplified ways of, well, you know what a assume means, you know, and then that happened, you know, 50 years ago, somebody figured out how to talk about yeah that at a party.
00:49:35
Speaker
But it goes much deeper than that. But this is also how I want to pivot a little bit. ah I think you have done a great service for manufacturing people who are looking to think about constraints. But I also think about the constraints, particularly tied around the last focusing point, which is inertia.
00:49:49
Speaker
And my sense is that inertia comes in the form of well, we forgot about that piece of equipment and now that we fixed this constraint, we better go to that piece of equipment. ah I want to shift more towards the individual and the person, the idea of constraints and how it impacts people in their everyday lives. And I'm just, and I feel like I tortured that a little bit. I'm just wondering if there's a way that you've thought about that either in your personal life or general.
00:50:12
Speaker
Absolutely. You were pointing to another form of inertia. I think all of us do it. Inertia is just keeping on doing the same thing over and over again and expecting different results. And I'll get to a little bit of the why of assumption hacking too, I think.
00:50:26
Speaker
We always make assumptions. Every single decision that we make, every single thought that we have, every single thing that we do, the basis for that are assumptions that we've made about situation that we're in at that moment.
00:50:41
Speaker
situation that we think it's going to be in the future, whatever. Assumption hacking is about figuring out whether the assumptions that we're making are valid for the situation that we happen to be in right now or not.
00:50:53
Speaker
They all make assumptions. They're either valid or they're not. They're expressing truth, if you will, or they're expressing falseness. So the key is in figuring out what it is. am I basing what I'm doing, what I'm thinking, how I'm feeling about somebody on assumptions that are true or assumptions that are not true is how I think about And the faster i can find out if the assumption that i'm making is wrong, rather than thinking, oh my God, I'm going to be so embarrassed if I'm wrong, blah, blah, blah.
00:51:21
Speaker
It's better. get to change course that much faster. so is it okay if I give a little bit of it history assumption? Please. Absolutely. from the book and from the TOC thinking tools and all of that.
00:51:34
Speaker
Like I said, when we first started this conversation, we are all very good at making things complicated, especially when we're trying to understand them. And we did a really good job of making the TOC thinking processes complicated.
00:51:47
Speaker
And then over the decades since, people have done an even better job of adding more and more and more to the mix. So they've been difficult for people to master, Sometimes you go into a room and someone says, hey, let's do a thinking process analysis and you'll see people go like, ugh, because it can be exhausting. We focused so much on logic being perfect that it was more about the analysis than really finding answers to the questions that we were trying to ask.
00:52:18
Speaker
And in fact, even when you go through thinking for a change, just gonna digress for a moment. From the perspective of many people in the TOC community, thinking for a change was written backwards.
00:52:31
Speaker
It was confusing because I didn't bring people through a full thinking process analysis that started with the current reality tree that is a tool to diagnose what's the real core cause for a whole bunch of symptoms.
00:52:48
Speaker
I didn't start there because we don't need to use that all the time. I started with processes that are easier to master and that we can use every day of our lives. I mean, think about how frequently do companies do strategic planning when they're doing it well? Not every week, not every day.
00:53:06
Speaker
Right? how about if we start with things that people can actually use and get benefit from every day? So I confused a lot of people with that book, but my mission has been to try to simplify this stuff and make it useful and usable every single day by anybody who wants to pick it up.
00:53:24
Speaker
Whether you're a mom trying to get your kids to do something that you think is in their best interest, or whether you're a CEO in a board that really wants to figure out what is gonna be our next growth trajectory and how are we gonna make that happen. So after all these years of looking at all the laundry list of new tools that have come out, all the difficulty that folks have had, and my thinking about what if I could close my eyes could be the most beneficial thing for people to learn and make progress on their own,
00:53:55
Speaker
It really came back to the basic, basic, basic thing that Ellie started me with actually was thinking about simple cause and effect. And the moment you or I say the word because as we're explaining something, we're explaining the cause and effect of something. This happened because of that. Okay, you're explaining a cause and effect. All right, so if I could help people just understand take a pause.
00:54:24
Speaker
The moment you say because, you're making a claim of cause and effect. Why? What is it about the thing that you think is the cause? What is it that's really making that cause the thing that's the effect?
00:54:37
Speaker
And if I could help people start thinking that way, just that basic building block, if we could start becoming more aware of it and surfacing what we're assuming and finding out faster when we're wrong,
00:54:51
Speaker
I mean, if I do nothing else in my life, that's a huge contribution, I think.
The Importance of Analyzing Assumptions
00:54:55
Speaker
So there's a few techniques that we can use that I simplified. If you read Thinking for a Change and you look at the section on what we called back then, the categories of legitimate reservation,
00:55:09
Speaker
It's all about how do you surface an assumption and challenge it? And that's what I'm doing with assumption hacking. I'm trying to make it really simplified and much easier for people to be able to take a pause and think through what they're really thinking and give themselves an opportunity to examine it.
00:55:28
Speaker
One of the reasons I was so attracted to the term, besides wishing I'd thought of it, is because there's lots of people who talk about it, but to do it novel way, that's not just novel, but it's actually actionable, right? Which is, I think, what the assumption hacking is, right? Even the phraseology, it's it's actionable.
00:55:44
Speaker
If I were describe the story that I told about my son and what was going on there, and I realized ultimately that it really wasn't a story about how my son got smarter. it was a story about how I got smarter.
00:55:57
Speaker
And I haven't thought deeply about what my assumptions were. i think maybe one of my assumptions was tell him to go after the fastest guy, which probably isn't a practical piece of advice either. But in any case, I thought I was just trying to expand his vision.
00:56:11
Speaker
Your assumption was that he was aiming to win. Yes. Thank you. yeah I needed that 30 years ago, what were you? Thank you. But now you allow me to elongate this premise that I'm working from is, Assumption Hacking is my version of I relayed this story and then i've relayed another 10 or 11 such stories in in a lot more elongated fashion.
00:56:36
Speaker
And there are things about training for a half marathon and what I did versus what I was hoping to do and several things like that. And what I realized is I started utilizing a term called evolving context, which meant that, like for example, the running story, I realized something in the day, I realized something 10 years later, and then i realized something 10 years later again. And what was happening is it it's evolving context. As I got smarter, the story didn't change, yeah but my understanding of what the story was offering.
00:57:02
Speaker
And now if I did that, i have 10 more stories like that. And then I'm realizing, wow, that is a very long, slow train ride to assumption hacking. I need to live the thing, be disappointed, have a little bit of success, be disappointed again.
00:57:15
Speaker
And that process, though, helped me. It was like self-medicating. It was a breakdown of my assumptions. And that was what I thought I would do is tell stories in order for people to work through their assumptions. But maybe paradigm shift is a little too dramatic, but just think differently. Just think differently. Because if you do that, you don't personalize the idea of maybe if you thought about it wrong,
00:57:35
Speaker
It's not the end of the world. Right. So I have found that individuals find different ways to deal with assumptions, even if they're not serious about it. But I think you have to be serious about it. I think you have to wake up every yeah day and saying, is what I'm thinking, does it make sense? Can I change it? Should I think differently?
00:57:51
Speaker
And is there an element of that in the assumption hacking that makes it that more accessible, sort of how you think about assumption hacking? Yeah. One of the things for me is if you find yourself becoming emotional about something,
00:58:03
Speaker
especially in a negative way, right? Take a pause and think through like, what's what's getting me angry about it? And then write it down. And there are certain ways to write it down, right? So there are certain ways that we can graph to kind of focus our attention on where is the assumption, like what's the arrow that the assumption is hiding underneath and how can I expose it? So I find that some of these graphing techniques work.
00:58:28
Speaker
Help my brain get into that mode. But i I did put together at some point like ABCs of assumption hacking and the A is attune. So give yourself a minute to tell yourself, yeah, I'm going to take a pause here and I'm going to sit down and really examine because I want to find out if I'm right or if there's a chance that I'm not.
00:58:51
Speaker
I want to really explore this because there might be a situation I want to solve. There might be an opportunity that I think I might be able to go after, but is it really there? you know That kind of thing. and Then kind of clarify what it is you're thinking and then go ahead and challenge it. and and I will say that um with with things like Claude and Chat GPT these AI models that we can tap into,
00:59:20
Speaker
One of the things I've used them for is, okay, here's what I'm thinking. What would prove me wrong? Because we get attached to our own ideas. We get ah emotional about our own ideas. So they're like this non-feeling thing that are trained to try to make you feel good. but if you say, I need to figure out if I'm right or wrong. So i don't want you to give me all the reasons that I'm right. I want you to help me.
00:59:43
Speaker
What would I need to check in order to see if I'm wrong? and And they always come up with great great things to go check. And then I can't. So these weren't so much ABCs, but they worked to practically the same way. I would say things like, all right, what's a candidate for something that maybe you should be questioning your assumption about it?
01:00:01
Speaker
And i was it wasn't really elegant, but I said things like, if it's something that keeps coming back to you unsolicited, like the same thing keeps going back. Yeah, that happened 30 years ago, but it's still coming back to me.
01:00:12
Speaker
or if it's something that I haven't resolved, it I don't understand why that happened, or there's some element of of of disgust. Maybe I had an embarrassing moment that I can't get over. All those things like that, if they keep coming back to you and they elicit one of those types of emotions on a whole nother range, I think there's a place in there where there's some assumptions. That doesn't mean they're wrong, it just means that you should challenge. Right, right. I'll add a couple to your list. Okay.
01:00:35
Speaker
um One is, you're in a conflict with somebody, right? Think, one, what are you assuming about them? But two, another thing you might consider is what must they be assuming?
01:00:47
Speaker
and And I'll give you a hint. what would a reasonable, rational, decent human being be assuming, right? Or what is it that they really
Understanding and Resolving Conflicts through Assumptions
01:00:55
Speaker
need? So if you start trying to put yourself in their shoes and thinking for a moment, like what am I assuming about their intentions?
01:01:03
Speaker
How would I prove that wrong? What must they be assuming in order for them to be advocating so strongly for what they're advocating about? Maybe they're trying to meet a different need than you are.
01:01:14
Speaker
Maybe each of you have valid needs, but you're trying to meet them in different ways. And that's where the clash is coming from. So so when you get in conflict with somebody, it's a great opportunity to take a pause. I feel like part of my DNA is to question my assumptions and and sometimes I'm not even sure which ones to face and in spite of all those checklists of things that Jess named and Lisa named, when I go through the list, ah I'm not coming up with anything, but just the willingness to say, look, I'm i'm allowing for the fact that could be wrong.
01:01:41
Speaker
And if you're engaging with other individuals, it almost seems like you're building trust. It's like they're willing to say, oh okay, looks like you're not married to something. I have a thought on it. Maybe maybe you should think about it this way. And all of a sudden now you've got a collaboration that advances the idea of hacking, but now you need some help because you haven't quite figured out what you're trying to figure out.
01:02:00
Speaker
And maybe that's another way to think about that. Yep. Another one is when you're surprised. that so you're doing something and maybe you thought the outcome of that was going to be, you know, 30% more sales. I'm just, again, picking a number, but instead you got nothing.
01:02:17
Speaker
It's a perfect time to go back and say, okay, what was the working assumption that led us to believe that doing this was gonna get us these sales? Force yourself to bring it out. And then what were we missing with that? Was that assumption really true? Was there something else that we missed?
01:02:32
Speaker
But when you look at that, now you've got the ability to say, okay, can we course correct? Or what do i now what do I need to understand about next time? You can also use the same line of thinking if you get surprised on the positive side. So you did the thing, you were aiming for 30% more sales and instead you got 100% sales.
01:02:52
Speaker
What led you to believe that you were getting to the 30%? If you see what you were missing there, then now you've got an opportunity to put something in place to really capture a much bigger share of the market than you ever thought. Attribute any surprise, way positive or way negative is an opportunity to learn more that you didn't know before.
01:03:09
Speaker
I want to ask you a question, and I'll preface it by saying we went through the idea about assumption hacking, and then I said, your version of assumption hacking is my version of living life for 30 years and trying to figure out where I went wrong, and now I'm trying to fix it.
01:03:21
Speaker
So it's a long process, so it's almost like going have an existential crisis if i didn't if I didn't wake up trying to challenge my assumptions, because I am fully formed by my experiences. I think about them all the time, and I know what if they're not good experiences or I've misread them,
01:03:36
Speaker
I'm going to be in bad shape. So the reason I'm mentioning that is I know that what got me to my particular modes of thinking around things, I think about constraints, I think about systems thinking, I think about a lot of different things of that nature.
01:03:48
Speaker
And it wasn't random. You know I got there because of all my experiences. And so the answer to the question, how did you get here? is much more complex than, well, it was interesting and I learned it in school.
01:04:01
Speaker
it's I had all these experiences and they taught me and I hope I'm managing them properly. So that's a long setup for this question for you. You're clearly passionate about this work and of course your ability to collaborate with the theory of constraints was, ah I don't know if you would call it fortuitous, timely, you use some words that are around the right timing.
01:04:21
Speaker
But I'm wondering, are there other things that really push you in the direction of being passionate about this type of thing, either professionally or personally, where started thinking this is really where you got to live? Yeah, I knew this was coming and I still don't quite know how to answer it in in a minute or two.
01:04:36
Speaker
You can have more than two minutes. I know, I know. That is a great question, Jess. I'm kind of programmed to just want to help people. and I don't want to waste anybody's time.
01:04:49
Speaker
And I don't want to waste my own time. So there has always been something that has kind of pushed me to the next stage of my career. I'm going to rewind way back when.
01:05:01
Speaker
I read the goal. was cool stuff. I tried implementing some of what I learned where I was working. A little bit of it took, a lot of it didn't. ah But then i had gone to one of Eli's seminars. I mean, it was, you know, just a period of time.
01:05:18
Speaker
Then my husband had an accident. We were up in Flagstaff at a friend's house for over Thanksgiving weekend. This was way a long time ago. And he was driving at the time. they were the three wheelers. Now they're the four wheelers. They don't have the three wheel version anymore because they were so dangerous. But he was riding this three wheeler. Our daughter was on the back.
01:05:38
Speaker
They were zipping around the area, went over a rock. And it was just the right kind of situation where it flipped the three wheeler. And so there was my husband in between the rock and my daughter in this bike.
01:05:52
Speaker
ah He ended up being laid up for a long time. It was one of two months. with eight broken ribs and a broken collarbone. And during that time, we started talking about, i was at a great company. I was at W.L. Gore, and the best corporate corporation I've ever worked for.
01:06:13
Speaker
But it was kind of like, is this all that life has? you know What's the next thing I'd love to do? is it really going to be staying here? And and so we concluded that once Danny got better, I was going to quit my job at WL Gore.
01:06:28
Speaker
I was going to start a training company. And the training company was going to be all about teaching different people from different functions and companies the language and the needs of the other functions.
01:06:41
Speaker
Like, I always thought, gosh, if only these salespeople understood what our engineers really needed, they wouldn't be just doing a bunch of blah, blah with them and trying to get them to buy anything. They could actually understand what they need and sell them something.
01:06:54
Speaker
If only manufacturing and sales understood the language of each other and what they needed, they wouldn't always be at loggerheads. So that was my idea. But in between quitting my job and starting this new company, I was going to take a couple of months to be a stay-at-home mom.
01:07:09
Speaker
And I knew that that's all I would be able to handle of being a stay-at-home mom because I just need to be working. Well, now fast forward to that period of downtime. I was also on the local chapter of Apex, which at the time was American Production Inventory Control Society. And um and and our chapter was bringing Eli Goldratt in for a one-day seminar.
01:07:32
Speaker
And I was on this committee that was doing this work. When I quit my job, I became the person on the committee with the most amount of time. So I got a lot of the tasks to do. Well, this led me to meeting people from his organization, guy who had a territory close to ours in terms of being an AGI associate.
01:07:52
Speaker
And so I ended up like spending some time with Eli and this guy, Mark, at the conclusion of the seminar. um And Ellie said, do you have any questions for me? And I said, yeah. Yeah.
01:08:05
Speaker
Why don't you have any women partners or certified associates? And he gave me a look and he said, cause none have tried to crack my organization. And they were well known for putting people who were trying to get in through the ringer.
01:08:19
Speaker
So I took the bait and then fast forward, he had warned one of his partners be on the lookout for this woman. If she contacts you, you need to bring her in. And so within a couple of months I became what they call the certified associate of the Goldratt Institute. That's what really got me. I mean, at one point in time, I read the book, tried to put some some stuff in place. What I was able to put in place worked like a charm.
01:08:40
Speaker
But now I was actually in the same business with the founder of all this. So that was kind of cool. And that's that's what got me along the path of really having my career be centered around theory of constraints. And there's been periods of time since then that I haven't been in Eli's
01:08:56
Speaker
organization, that I've done some other things. I ran a manufacturing company for a while. I was with some other consultancies. I joined Goldratt's consulting firm back in the 2005 timeframe and ultimately became a partner in that firm before I retired from there in 2019. Every time I would leave someplace, it was because I decided that I was no longer a good fit for that organization.
01:09:25
Speaker
And I didn't need to change them. i just needed to change what I was doing. So every time I would leave, I left on great terms, but I started consulting in TOC before any of Eli's companies allowed it.
01:09:37
Speaker
I started doing other things. And so fast forward to the assumption hacking bit. That's kind of Lisa's way of putting heart, mind, senses together to help people think more clearly. And I think of thinking more clearly, not just as the brain logic exercise. I think about it as really more holistic from an individual perspective. perspective Got to feel it, got to sense it, got to think it.
01:10:02
Speaker
And they all go together. Well, Lisa, I think we're going to get ready to wrap things up. I've really enjoyed the conversation, but I wanted to close with something here. What I'm finding more prevalent in some of the reading that I do, and I try and seek out things around constraints, and of course, the most helpful things are the things that practically help you identify not only things like physical constraints, but I'm also very attuned to personal constraints, right?
01:10:25
Speaker
And the thing about constraints is that if if the constraint is the warehouse or the machine or the process, people might fight with you trying to change it, but the process itself is not going fight with you. But if the individual is a constraint, that's a much different thing to highlight. And then you've got the whole thing around egos and inertia
Reframing Constraints as Opportunities
01:10:42
Speaker
and all those things. But I just want to make a general statement to honor the fact that You said you want to be helpful to people and give them little other way of thinking about things, and I'm trying to do the same thing. And I'm wondering if there's some validity to this just one very simple sentence, which is around engaging constraints.
01:10:57
Speaker
And the premise here is that human beings do not become fulfilled by escaping the constraint, but by understanding and constructively engaging them, which I think the result is you're not escaping the constraint, you're just changing the game, changing the rules and getting to the next constraint.
01:11:12
Speaker
The reason I like that a lot is because things like constraint, things like friction, they were very charged words. And I was telling someone other day, listen, I don't think about friction in a bad way. Like if I'm falling down a mountain and I'm going to go over a cliff, that's a good day to have more friction in my life because of the snow needs to slow me down. There's nothing wrong with friction, but still they're very charged words.
01:11:30
Speaker
So I'm saying all that to say, all right, is the idea then the constraints, not the problem. It's not engaging them properly so they can leverage them or do something different with them. And I'm just wondering if that statement there feels like it's got any kind of resonance for you.
01:11:46
Speaker
It sure does. In fact, one of the things Eli did was he used a lot of these terms that have negative connotations, but aren't meant to be considered as negative.
01:11:58
Speaker
For example, constraint. in the In the sense that we've talked about largely these, I'll call them physical constraints, the machine, the capacity, the money, the whatever it is.
01:12:10
Speaker
It's not a problem. It is what it is. It happens to be the thing that we have the least of that if only we had more of it, we'd be able to achieve more of our goal. And so is that a problem or is that the most precious and valuable thing that there is? When we think about it as the most precious and valuable thing that we've got, then yeah, we gotta take care of it.
01:12:28
Speaker
We've got to help make sure that we're using it in a way that the best of it is able to come out because that's what we need, right? It's not a problem to be solved. The problems to be solved are the problems surrounding what's preventing us from making the best use of this thing.
01:12:42
Speaker
What's preventing us from helping to make things better given that this is the constraints and things like that. So I'll give you one more. just yeah Just build a little bit on this for a moment. One of the other things that we talk about is the, if you will, the number one constraint. And there's a lot of discussion in the TOC world, i you call it a constraint, blah, blah, blah. But I think Eli was right about this, that the number one constraint is the amount of attention we're able to give something.
Leadership and the Constraint of Attention
01:13:14
Speaker
So said the constraints in management is the capacity that's available to put your attention on stuff. And if, I mean, I think about that as an individual, right? If we're always busy, busy, busy, but he also talked about it from a leadership perspective that if you think about typical hierarchical organizations, right? The pyramid, the higher you are in the pyramid, is there more or less demand on your attention?
01:13:38
Speaker
Mm-hmm. way more and way more varied. So how do you really know what to focus on? How do you figure out what's the most important thing? Because then it becomes really important because you cannot attend to everything. right but You have to have a way to filter through and really hone in on what's the most important thing that should command my time.
01:13:59
Speaker
And we all should do that because we're all we're all constrained by the time we have on this earth. All right, Lisa, do you have any final thought about something you want to convey? i welcome you to do that. And then from there, if you like, move into talking about anything you want in terms of projects or are you doing anything out there that you'd like people to be aware of?
01:14:19
Speaker
I guess final thought, a couple. One is the sky's never the limit. it's it's fair fight It's how we think about what we can achieve. It's always really helpful to have a goal, even as individuals, if we set a goal for ourselves and make it just a little bit beyond what we think is possible so that we really have to stretch for it. And it's something that's super motivating for us. Then it helps to really think about what's the number one thing that's standing in my way of achieving this goal and start focusing on that.
01:14:51
Speaker
I think of it as whether we're individuals, whether we're organizations. I've been with every single kind of organization I think that there is. And I have found value in whether it's five focusing steps or in any number of the thinking tools.
Encouragement to Engage with the Podcast Community
01:15:08
Speaker
They can be helpful for figuring out and then going ahead and doing the things that are most important that'll give us results that matter to us. I guess to conclude, if anybody in your audience is interested to learn more, just get on my website, sign up for the newsletter.
01:15:23
Speaker
I try to get it out but on a monthly basis, but I only get it out when I'm happy with what I've written. so I will say this. It's one of the few newsletters I stay on top of. I think it's excellent and I think it's thoughtful.
01:15:34
Speaker
And so what is your website address? Jenrata.com, J-E-N-R-A-D-A.com. um Jenrata is easy for me to remember. It's the initials of the three people who are most important to me in my life. My daughter Jen, my daughter Rach, my husband Vanny. Jenrata.com. And yeah, it's easy to just sign up for the newsletter. And I don't spam people.
01:15:58
Speaker
I just want to provide good values. so Well, I want to thank you so much. I really enjoyed it. It was informative. I have to go back and do a little more homework on the five focusing steps. I think I misapplied those in some places, so I need to get little smarter about them. But I've really enjoyed it. And I'll look forward to when we have an opportunity to catch up and talk about this and more similar type things.
01:16:21
Speaker
Thank you so much, Jess, for having me on. um I've loved this conversation too. At any time, just holler. All right. Thanks very much. You take care. You too.
Reevaluating Negative Views on Constraints
01:16:37
Speaker
Listening back to this conversation helped me realize that constraints are not necessarily the enemy. In fact, sometimes they're the thing that finally forces clarity. We tend to think of constraints as limitations such as not enough time, not enough money, not enough people, or not enough capacity.
01:16:54
Speaker
But throughout this conversation, Lisa kept returning to a different idea, that constraints can also reveal where attention matters most. Maybe a lot of what creates frustration in our lives comes from trying to optimize everything at once, trying to keep every part of the system fully utilized, fully active, and fully resolved.
01:17:13
Speaker
But systems don't really work that way, and neither do people. Sometimes the real breakthrough comes when we stop treating every problem as equally important and begin asking a better question.
01:17:25
Speaker
What is actually governing the outcome right now? That question showed up in the story I opened with about my son Justin chasing what I later called a ghost. At the time, it felt like a lesson about competition and effort.
01:17:39
Speaker
But years later, I realized it was a story about assumptions, about invisible ceilings, and about how easily we attach ourselves to limitations that we've never fully examined.
01:17:50
Speaker
So, the deeper lesson in sight constraints is not simply that something is limiting us, but that limitations can expose where our thinking has become unfocused, outdated, or incomplete.
01:18:02
Speaker
The Leaders Commute podcast was produced by Acuity Business Consulting. Acuity demystifies the challenge of transforming talent and resources into exceptional and sustainable organizational performance by surfacing actionable clarity in the areas of strategic design, financial management, operational excellence, and leadership development.
01:18:24
Speaker
You can catch a new episode every couple of weeks wherever you enjoy your favorite podcast. Thank you for your thoughtful engagement. And until next time, I'm Jess Villegas, and you have been listening to the Leaders Commute podcast.