There’s a wonderful story in Eli Goldratt’s The Goal about a group of Scouts walking through the countryside.
The group keeps spreading out. Some of the Scouts are racing ahead. Others are falling behind. The leader keeps trying to reorganise them, close the gaps and get everyone moving faster.
Nothing really works.
Then he notices Herbie.
Herbie is the slowest Scout in the group. Worse still, he’s carrying a huge backpack.
And suddenly the problem becomes obvious.
It doesn’t matter how fast the fastest Scouts can walk. It doesn’t matter how much you improve their fitness. It doesn’t matter whether you give them better boots.
The entire group can only move as fast as Herbie.
So they redistribute the contents of Herbie’s backpack.
Herbie speeds up.
And the whole group speeds up.
That is the essence of the Theory of Constraints.
And it sounds almost laughably obvious.
If only businesses were that easy
Imagine a £10 million automated production line that suddenly stops.
Management could commission a review of production efficiency. They could investigate shift patterns. They could look at equipment utilisation, maintenance strategy, inventory and supplier performance.
Or an engineer could discover that a £10 proximity sensor has failed.
Replace the sensor and the £10 million line starts moving again.
For those few hours, that £10 component is arguably the most economically important asset in the factory.
That’s the point.
The value of an intervention isn’t determined by its size. It’s determined by whether it removes the thing currently constraining the system.
Unfortunately, the problems that reach senior management rarely arrive with a red light flashing above the constraint.
The obvious problems have normally already been fixed.
What remains are the difficult ones.
Sales are down.
Margins are deteriorating.
Projects are late.
Inventory is increasing.
Customers are unhappy.
Engineering blames Manufacturing. Manufacturing blames Engineering. Operations blames Sales. Sales says Operations can’t deliver what customers need.
So management launches initiatives.
Improve Sales.
Transform Operations.
Restructure Engineering.
Introduce a new ERP system.
Change the operating model.
And pretty soon half the organisation is trying to improve the other half.
The problem is that a business can contain hundreds of things that could legitimately be improved.
Only a few of them are stopping the business achieving more right now.
We saw this in aerospace
Mindsheet worked on an aerospace maintenance operation where the apparent challenge was the supply chain.
There were plenty of things you could improve.
Parts availability. Inventory. Maintenance processes. Planning. Forecasting. Procurement.
You could have spent years improving them.
But that wasn’t really the objective.
The customer didn’t ultimately care whether the supply chain was efficient.
They cared about having aircraft available to fly.
Once we looked at the whole system from that perspective, the question changed.
It wasn’t:
How do we improve the supply chain?
It was:
What is preventing us getting serviceable aircraft back to the customer faster?
That distinction matters.
Our analysis showed that removing around six days from the maintenance cycle could have the equivalent effect of providing the customer with two additional aircraft — without buying another aircraft.
Same organisation.
Same people.
Same aircraft.
Different question.
And a much more valuable answer.
This is where traditional improvement can go wrong
Most businesses don’t suffer from a shortage of improvement opportunities.
Give a competent team two days and they’ll produce a wall covered in Post-it notes describing things that could be better.
A traditional diagnostic can turn that into an impressive report containing dozens of recommendations.
But imagine going to your doctor with pain in your knee.
They examine you carefully and announce:
“You’ve got 37 things we could improve.”
Your eyesight could be better.
Your cholesterol could come down.
You could lose three kilos.
Your flexibility could improve.
There’s a mole they’d like to investigate.
And your left shoulder is showing some signs of wear.
All potentially true.
But you’d still ask:
“What’s wrong with my bloody knee?”
That’s what a good diagnosis is supposed to do.
It narrows the problem.
Businesses need the same discipline
At Mindsheet, we call this Precision Diagnostics.
We start by asking what the business is actually trying to achieve.
Then we look across the system rather than assuming that the department displaying the symptoms contains the cause.
We talk to the people who see different parts of the organisation.
We examine the available operational and financial evidence.
We look for the causal relationships connecting apparently separate problems.
And we try to identify the constraint currently preventing the system achieving more.
Because once you find that, something interesting happens.
The answer usually gets smaller.
Instead of:
Transform the company.
It becomes:
Fix this.
Then measure what happens.
If you’ve genuinely removed the constraint, performance improves and something else eventually becomes the limiting factor.
Fine.
Now find that.
It’s continuous improvement driven by evidence rather than a succession of enormous transformation programmes.
What’s the point?
Don’t ask:
“What could we improve?”
You’ll get an enormous list.
Ask:
“What is stopping us achieving more?”
That’s a much harder question.
But it’s also a much more valuable one.
Because the best intervention isn’t necessarily the biggest, cleverest or most expensive.
It’s the one that removes the constraint.
Fix the constraint. Not the company.
If your business is performing below its potential but your management team can’t agree exactly what’s holding it back, Mindsheet’s Precision Diagnostic is designed to answer that question.
Typically, we can complete the diagnostic in around two weeks with minimal demand on your management team.
If you’d like to discuss a Precision Diagnostic for your business, please contact Mindsheet.