1.1. Background and underpinnings of the TOC thinking process

Though the Theory of Constraints was originally offered by Eliyahu Goldratt as a manufacturing scheduling method, over the course of his career, Goldratt evolved TOC into a systems methodology that encompasses a wide range of concepts, principles, solutions, tools and approaches that strive to ensure any change undertaken as a part of the ongoing improvement will benefit the system as a whole (Dettmer W., 2006). Consistent with the systems philosophy and unlike the classical or behavioural management theories, TOC views organisations as a chain of many links or networks of chains.

Conventional thinking tends to address large systems and their problems by breaking them up into smaller, simpler units, i.e. through the process of “analysis”. This approach is concerned primarily with linear relationships and mostly ignores the possibility of dynamic change and multiple feedback loops. To the contrary, the systems approach is concerned with “synthesis”, i.e. the view that various elements of systems are interconnected. All these interconnected and interdependent parts contribute to the overall goal of the entire system. More importantly, this view recognises that the system may fail even if a functional division within is successful. Further, TOC emphasises nonlinear cause and effect with feedback loops since it is possible that actions taken in one part of the organisation can have unintended consequences on another. From this perspective, Goldratt’s TOC bears resemblance to the work of other systems theorists like Peter Senge, Jay Forrester, etc., who proposed undertaking problem-solving while viewing them as part of the overall system rather than in isolation.

Modelling the system worldview is complex because, as Peter Senge puts it, “A system can present dynamic complexity when cause and effect are subtle”. Obvious interventions can produce non-obvious consequences. Though apparently complex, Goldratt identified that these systems are driven by simple rules and the root causes for problems faced by organisations can be identified through convergent thinking. Unlike divergent thinking (where many ideas are generated and evaluated), convergent thinking synthesises the information available and attempts to drill down to the core issue. For this, Goldratt has developed a set of tools to methodically structure and solve fundamental conflicts in organisations and enable a process of ongoing improvement.

Being a trained physicist, for conceptualising and designing this “thinking process”, he has borrowed heavily from the hard sciences. This is not surprising since systems theory itself has its origin in the sciences, and the belief in the interdependence of all things is fundamental to the natural laws. This bedrock of hard sciences is clearly discernible in Goldratt’s work since traditions and methodologies of the hard sciences, as established by philosophers of science like Karl Popper, Max Born, etc., have distinct characteristics (Mohanty, Vector Consulting Group, 2013). In theory, these traditions are considered scientific only if it is falsifiable (Popper, 2002). Theories can be supported if: they cannot be falsified by observation and experiment; if there is general consistency with which a wide body of data can be explained; and if these theories correctly predict new discoveries or properties. The interplay between tentative theories (conjuncture) and error elimination (refutation through attempted falsification) advances scientific knowledge. These characteristics are generally missing in social science theories, which (while they may be valid) are crafted in such a way as to ’make it impossible for criticism or experiment’. Unlike the deductive reasoning of the hard sciences, inductive reasoning is more common in social sciences; theories based on qualitative tools and causal relationships are difficult to establish and validate. More subjectively, social science methods are often criticised for poor generalisability.

Contrary to the general practice of such social scientists, and by adopting the traditions of the hard sciences, Goldratt established tools for TOC that help raise questions regarding accepted practice, existing paradigms and perspectives that are constraints in the path of ongoing improvement. This rigour of the hard sciences is most evident in the logical constructs of these tools or diagrams. The Thinking tools based on these constructs help identify the core conflict or constraints, construct a complete solution and devise plans for implementing this solution by exploring and communicating information and assumptions about the current reality, future reality and how to get there (Cox & Spencer, 1998). The “TOC Thinking Processes” as they were called, were introduced by Dr. Goldratt in a business novel, It’s Not Luck (Goldratt, It’s Not Luck, 1994) and when used enable the process of ongoing improvement in any organization.

1.2. Process of Ongoing Improvement

Organizations are a chain of interdependent links, and therefore, managing the constraints effectively through a process of ongoing improvement can result in substantial improvement to the entire system output and can give results with only three months of effort (McMullen, 1998). The suite of trees of the ’Thinking processes’ provides a road map for this change (Dettmer, 1997). No matter what the decision, accelerated improvement or change involves answering the following questions:

What to change?
What to change to?
How to change?

The thinking process tools can guide decision-makers in answering these questions by facilitating the process of problem structuring, problem identification, solution building, identification of barriers to be overcome and implementation of the solution. The logical constructs of these tools or diagrams are the necessary condition logic, the sufficient cause logic and the strict logic rules that are used to validate cause-effect relationships which are modelled with these tools.

1.3. The Constructs of TOC Thinking Processes

1.3.1. Sufficiency Thinking: The TOC thinking process is built up by constructing connections between observed effects and causes. To do so, the basic constructs used are the examination of Causality and Necessity. Sufficiency thinking examines these patterns of effect-cause-effect. There can be three types of sufficiencies: A is sufficient to cause B; A and B separately cause C; A and B together cause C. The wording used is “If…..then” to express these cause-effect relationships. These patterns can be used to visualise the cause-effect relationship and uncover the assumptions and reservations about any of the components to facilitate thinking, problem-solving and communication with other people.

1.3.2. Necessity Thinking: Necessary thinking is the thought pattern used when an attempt is being made to establish the conditions that need to exist to accomplish something else. Necessary conditions are rules, policies or laws that provide limitations or boundaries to the cause and effect. This thinking uses the wording, “In order to achieve A, we must have B”. Figure 2 illustrates this necessary condition thinking.

Sufficiency and Necessary condition thinking can be used to surface and challenge assumptions with the help of the eight rules of logic to aid in the decision-making process.

1.4. Eight rules of logic

The validity (or invalidity) of the causal connections can be verified by a finite set of rules called the Categories of Legitimate Reservation (CLR). Most of these have their roots in Aristotle’s logical fallacies (Dettmer H., Goal Systems International, 2006).

The eight rules are:

1. Clarity (the complete understanding of a word, idea, or causal connection)
2. Entity Existence (the verifiability of a fact or statement)
3. Causality Existence (the direct-and-unavoidable connection between a proposed cause and a particular effect.
4. Cause Sufficiency (complete accountability for all contributing, dependent causes in producing an effect)
5. Additional Cause (existence of a separate and independent cause of a particular effect)
6. Cause-Effect Reversal (misalignment of cause and effect)
7. Predicted Effect Existence (additional expected and verifiable effect of a particular cause)
8. Tautology (circular logic, or existence of effect offered as rationale for a proposed cause)

1.5. The Tools of the TOC Thinking Process

Using the constructs for thinking and the eight rules of logic, the six TOC Thinking Process tools allow decision-making to be undertaken in the Socratic tradition of questioning the cause-and-effect relationships and the validity of the underlying assumptions. This comprehensive set of logical tools can be used for analysis, solution development and solution implementation for individuals, groups or organisations. Each tool has a purpose, and nearly all tools can be used independently. Figure 3 is the summary of these tools.

The use of these tools is based on the fundamental beliefs of TOC that organisations are a) inherently simple (interdependencies exist in organisations), b) desire inherent harmony (win-win solutions are possible), c) inherently good (people are good), and have inherent potential (people and organisations have potential to do better). In the book “Through the Clouds to Solutions”, Jelena Fedurko (Fedurko, 2013) states that the major areas for the application of TP tools are:

To create and enhance thinking and learning skills
To make better decisions
To develop responsibility for one’s own actions through understanding their consequences
To handle conflicts with more confidence and win-win outcomes
To correct behaviour with undesirable consequences
Assist in evaluating conditions for achieving a desired outcome
To assist in peer mediation
To assist in the relationship between subordinates and bosses

1.5.1. Current Reality Tree (CRT)

When grappling with the decision-making variables for solving problems, the focus tends to be on the symptoms that are visible rather than the root cause. This approach fails to eliminate the disease and gives, at best, temporary relief. CRT helps state the current situation and uncover the conflict/s that must be resolved if that situation is to be improved. The primary function of the current reality tree tool is to help unearth the one entity that leads to most of the undesirable effects (UDE) in the organisation. (Dettmer H., 1997) states that the CRT is designed to achieve the following objectives:

Provide the foundation for understanding complex systems
Identify undesirable effects (UDEs) exhibited by a system
Link UDEs through a logical chain of cause and effect to root causes
Identify the core problem that eventually produces 70% or more of the system’s UDEs
Determine at what points the root causes and/or core problem lie beyond one’s span of control or sphere of influence
Isolate those few causative factors (constraints) that must be addressed in order to realise the maximum improvement of the system
Identify the simplest change to make that will have the greatest positive impact on the system.
Using the rules of logic, anyone can question the logic presented. Any conflict unearthed by the CRT can be examined with the help of the evaporating cloud.

1.5.2. The Evaporating Cloud or the Conflict Resolution Diagram (EC)

The conflict resolution diagram or the evaporating cloud helps build new insights into the core problem or conflict facing an organisation, individual or group. The cloud deals with all kinds of problems that involve a dilemma or a conflict between two mutually exclusive actions or wants. Using five interconnected boxes, the cloud guides the user to understand that each of the two conflicting actions is needed to achieve some need. These needs are required to meet an objective. This allows the user to have a structured framework to analyse the problem (Fedurko, 2013).

The cloud is about the necessity logic. This diagram can be read as
“In order A we (I/they/etc) must B
In order B we (I/they/etc) must D
In order A we (I/they/etc) must C
In order C we (I/they/etc) must D’
D and D’ are in direct conflict
D puts in danger the need C
D’ puts in danger the need B”

The cloud structure is the raw material for finding the assumptions -the reasons why these relationships are thought to hold and articulate them. These assumptions are represented as thought bubbles on the diagram. Invalidating the weak assumptions can evaporate the cloud. Or ‘injections’ can be used to ‘attack’ valid assumptions, allowing for resolution of the conflict.

1.5.2.1. Types of clouds

Depending on the purpose, clouds have been classified by Jelena Fedurko (Fedurko, 2013) as Dilemma Cloud: Used for situations when a person has two clear courses of behaviour and cannot decide which one to take.

Two-sided interest conflict cloud with two subtypes:

Day-to-day conflict cloud: for conflicts and disagreements between two people. Organisational interest conflict cloud: for conflicts of interest between two different functions of an organisation.

Fire-fighting cloud: for situations when a manager must put out ‘fires’ and to ensure that they will not reoccur

UDE cloud: for situations when a system has been suffering from certain recurring problems that do not allow it to gain the desired performance.

1.5.3. The Future Reality Tree (FRT)

Once the injections, i.e. actions, conditions and solutions needed to resolve conflicts, are identified, the FRT can be constructed, linking these to desirable outcomes. The logic of these linkages is checked through the sufficiency-based logic. It helps clarify what actions and conditions will be necessary and sufficient to bring about desirable effects or change. Thus, this logic-based tool is useful for constructing and testing potential solutions before implementation (Kendall, 1998).

The FRT serves the following purposes (Mabin, 1999):

Determines whether proposed system changes will produce the desired effects without creating negative consequences
Indicates additional actions necessary to prevent any such negative side effects from occurring
Provides a means of making beneficial effects self-sustaining through deliberate incorporation of positive reinforcing loops
Provides a means of assessing the impacts of localised decisions on the entire system
Provides an effective tool for communicating to and persuading decision-makers to support a desired course of action
Serves as an initial planning tool
Enables testing of new ideas before undertaking implementation

Steps for building FRT

1. Gather all the needed information and materials
2. Articulate the desired effects
a. Positive, not neutral
b. Use present tense
c. Lay out Desired Effects
3. Start with the injection(s) at the bottom
4. Fill in the gaps (building upward)
5. Add additional injections wherever necessary
6. Build supporting loops if possible
7. Look for and trim NBRs

1.5.4. The Negative Branch Reservation (NBR)

FRT may have subtrees constructed to explore the negative side effects of proposed solutions. These are called the negative branch reservation. NBR is a logic-based tool using cause-and-effect relationships, which is formally a sub-tree of the FRT but can be used as a stand-alone tool to improve feedback and develop ideas (Dettmer H., 1998).

1.5.5. The Prerequisite Tree (PRT)

For each of the injections on the FRT, a PRT will answer the question: what currently prohibits its implementation? Therefore, PRT complements the FRT and helps identify obstacles that might block the path of the desired outcomes and then sets new actions that can help overcome these obstacles.

Dettmer (1997) states that the PRT is used to achieve the following objectives:

To identify obstacles that prevent the achievement of a desired course of action, objective, or injection)
To identify the remedies or conditions necessary to overcome or otherwise neutralise obstacles to a desired course of action, objective or injection
To identify the required sequence of actions needed to realise a desired course of action
To identify and depict unknown steps to a desired end when one does not know precisely how to achieve them

Steps for a PRT

1. Place ‘injections’ at the top
2. List the obstacles that are expected
3. Ensure that as each obstacle is overcome, an intermediate objective is achieved
4. The intermediate objectives need to be sequenced
1.5.6. The Transition Tree (TRT)

The TRT identifies tasks and actions that are both necessary and sufficient to meet the intermediate objectives of the PRT. The focus is not on the plan to do but on the plan to accomplish. For each intermediate objective (IO), a specific action or set of actions is determined and initiated. Causing a specific change is imperative. Thus, the transition tree provides a road map for reaching the goal.

Dettmer (1997) outlines the five elements of the Transition Tree as:

1. A condition of existing reality,
2. an unfulfilled need,
3. a specific action to be taken,
4. an expected effect of the integration of the preceding three,
5. the rationale for a need at the next higher level of the tree.

Each succeeding level of the Tree is built upon the previous level, with the expected effect replacing the unfulfilled need. These build progressively upward to an overall objective or desired effect.

Dettmer (1997) states that the Transition Tree serves nine basic purposes, these are:

Provide a step-by-step method for implementation
Guide seamless navigation through a change process
Detect deviation in progress
Adjust or readdress efforts, should plans change
Communicate the reasons for action to others
Implement the injections identified in the FRT
Accomplish the intermediate objectives (IO) identified in a PRT
Develop tactics for conceptual or strategic plans
Prevent undesirable effects from ensuing because of implementation.

Summary of the TOC Thinking Processes

Despite its origins as a manufacturing methodology, Goldratt’s Theory of Constraints (TOC) methodology is now regarded as a systems methodology with strong foundations in the hard sciences. Through its convergent thinking tools and synthesis, the “Thinking processes”, which underpin the entire TOC methodology, help identify and manage constraints and guide continuous improvement and change in organisations. This process of change requires the identification and acceptance of core issues, the goal, and the means to the goal. Since the thinking tools are designed to address successive “layers of resistance” (refer to Appendix 2) and enable communication, it expedites securing the ‘buy-in’ of groups. While CRT represents the undesirable effects of the current situation, the FRT and NBR help people plan and understand the possible results of their actions. The PRT and TRT are designed to build collective buy-in and aid in the Implementation phase.

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