Pipeline Accelerator Blog

How TOC can be an easier sale

Why Theory of Constraints is so hard to sellIt’s rare to find an exec who hasn’t read Goldratt’s The Goal, while few have read Ohno’s Toyota Production System, or anything at all on Six-Sigma. But few companies have adopted TOC as a focusing approach while Lean and Six-Sigma are widely used.

Arguably, Theory of Constraints is a poor description from a marketing perspective. Some folks just relate to theory as being theorectical or hypothetical. But putting that aside, Goldratt’s own analysis of what it takes for a new technology to be adopted might be useful to examine how this can be changed.

1.       What is the power of the new technology?

The data shows that TOC increases the effect of lean and 6-sigma by a factor of 15 so power doesn’t seem to be the issue.

 2.       What current limitation or barrier does the new technology eliminate or vastly reduce?

TOC is all about reducing limitations – especially the limitation of what you can do with your existing resources and investment.

 3.       What usage rules, patterns and behaviors exist today in order to deal with the limitation and how can the new technology be applied in a way that will enable the above change without causing resistance?

Here, is where I think TOC runs into resistance to broader acceptance. Lean (not in its original TPS form, but in its common usage) and SS can be implemented with little change required on the part of top management. However, TOC requires change from the top in the form of policies, decisions making (global instead of local optimization), resources allocation and measurement (from activity to productivity). It even requires a different method of managerial accounting that forgoes traditional allocation based cost accounting.  No wonder some CEO’s don’t automatically embrace TOC or only embrace it superficially.

So the important question here is what approach is most effective in reducing the resistance to the change required with TOC? Of course, Goldratt offers the layers of resistance concept to address the logical or cerebral component of selling change, while others like Kotter, the Heaths and Sinek offer approaches that complete the picture with the emotional or limbic aspects of change.

As part of the adoption process at an individual company level, these all add up to understanding the leadership’s pain and aspirations, getting their agreement on the direction any solution needs to take, envisioning what their business could look like, and demonstrating that the TOC solution focuses their organization to deliver the impact they want to see without negative consequences.

And this is how many practitioners deal with selling TOC. Simple enough for dealing with individual companies, and maybe it’s only a matter of reaching the tipping point. But it still seems like there should a way to approach this resistance at an industry wide level.

 The More Impact Question

What are your thoughts and ideas on how TOC could deal with the resistance on a broader industry level and gain even wider acceptance? Please share them in the comments.

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