1st Edition

Quality, Involvement, Flow The Systemic Organization

    256 Pages 96 B/W Illustrations
    by Productivity Press

    256 Pages
    by Productivity Press

    256 Pages 96 B/W Illustrations
    by Productivity Press

    Current organizations underperform due to silo thinking. Artificial barriers frustrate efforts and perpetuate an organizational model no longer adequate for the complexity of the current business world. Leaders and managers must acquire a whole-system perspective for their organizations to be sustainable. This book provides the overview, knowledge and tools to create a practical shift for 21st century management. The “Theory of everything” for management; an evolved and more scientific Fifth Discipline plus field book for contemporary managers. It follows on from Deming and Goldratt: The Decalogue that continues to sell today and is based on over ten years of implementation.

    1. Navigating the New Complexity...................................................1

    1.1 Dividing Things Up Is No Longer the Answer..................................2

    1.2 Useful Lessons from Science: From Parts to Whole...........................3

    1.3 The Organization: A Whole That Is Much More Than the

    Sum of Its Parts...................................................................................4

    1.4 New Leadership...................................................................................5

    1.5 What Is a Leader?................................................................................6

    1.6 Leadership and Knowledge................................................................6

    1.7 Leadership and Selflessness................................................................7

    1.8 Quality, Involvement, Flow.................................................................8

    1.9 Leadership Thinking: Framing the Change as a Conflict..................9

    2. Why Are We Stuck? The Inherent Conflict of Organizations.....11

    2.1 What’s Wrong with a Hierarchy?.......................................................12

    2.2 The Silo Sickness...............................................................................12

    2.3 The Inherent Conflict in Any Organization.....................................14

    2.4 Finding a Solution to the Hierarchy Conflict....................................17

    2.5 A New Kind of Organization: Coordination Instead of

    Functional Reporting.........................................................................19

    2.6 The Challenge of the Solution to the Hierarchy Conflict................20

    3. Where Does the Knowledge to Move Forward Come From?

    The Giant Contributions of Dr. Deming and Dr. Goldratt..........23

    3.1 Quality and Involvement through Deming......................................25

    3.2 Flow and the Theory of Constraints.................................................27

    4. What Is an Organization? The Fundamental Constituents.........31

    4.1 A Closer Look at the Four Essential Constituents of

    an Organization.................................................................................32

    4.2 New Awareness about Interactions..................................................34

    4.3 Stakeholders and Corporate Social Responsibility...........................35

    4.4 A New Organizational Design..........................................................35

    5. How Can We Blend the Deming and Goldratt Principles

    in a Practical Way?......................................................................37

    5.1 How a Deming and Goldratt Methodology Emerged......................38

    5.2 Understanding the Organization as a System: Flowcharting

    the Processes.....................................................................................43

    5.3 Variation and Its Importance for Managing Organizations as

    Systems..............................................................................................45

    5.4 Variation and Complexity.................................................................45

    5.5 Prediction versus Forecast.................................................................47

    5.6 Adding the Constraint to the Organization Viewed as a System.......48

    5.7 The Need for a Constraint................................................................49

    5.8 Protecting the Constraint: The “Buffer”............................................54

    5.9 Managing Variation and Constraint(s)..............................................55

    5.10 The New Organization: Rolling Out the Solution of

    the “Choked” System.........................................................................57

    6. Why Projects Can Become the Backbone of

    the New Organization.................................................................61

    6.1 How People Come to Work Together: Process and Project............61

    6.2 Systemic Project Management...........................................................62

    6.3 The Critical Chain Approach to Project Management......................63

    6.4 What Does a Systemic Project Manager Do?....................................64

    6.5 Quality, Involvement, and Flow through Project Management.......65

    6.6 The Constraint and Project Management.........................................68

    6.7 What Does This Mean for a Leader? Toward the

    Organizational Design of a Network of Projects.............................70

    6.8 A New Organizational Design Calls for a New Leadership.............71

    7. Making the Change Operational: The Network of Projects.......73

    7.1 What Is a Network and How Do Networks Behave?.......................74

    7.2 Complex Networks and Real Organizations....................................75

    7.3 Connecting “Organizations as Complex Networks” with

    the Decalogue Methodology.............................................................76

    7.4 Networks, Organizations, and Variation...........................................78

    7.5 Optimizing Resources through the Organization as a Network

    of Projects..........................................................................................79

    7.6 A New Kind of Hierarchy.................................................................81

    7.7 The Cognitive Challenge...................................................................82

    7.8 Career Paths and the Systemic Organization...................................83

    7.9 Achieving So Much More..................................................................84

    8. Ten Steps for Designing, Measuring, Managing,

    and Improving the System..........................................................85

    8.1 Scope and Purpose of the Decalogue Methodology.......................85

    8.2 Optimizing the System......................................................................86

    8.3 What to Change, What to Change to, and How to Make

    the Change Happen..........................................................................87

    8.4 The Decalogue in Three Fundamental Phases................................88

    8.5 The 10 Steps of the Decalogue.........................................................90

    9. Why Do We Get Stuck on the Path of Transformation?

    The Inherent Conflict of Change................................................99

    9.1 Change and Consciousness...............................................................99

    9.2 The Constancy of Change...............................................................100

    9.3 Looking at the Conflict Cloud of Change....................................... 101

    9.4 Change and Leadership...................................................................103

    9.5 Core Conflicts..................................................................................104

    9.6 Levels of Resistance to Change.......................................................105

    10. The New Intelligence: Intelligent Emotions and How to

    Foster a New Systemic Intelligence..........................................109

    10.1 Systemic Thinking to Inform Decisions and Minimize Risk.......109

    10.2 The Cognitive Constraint: Relearning to Think........................... 110

    10.3 The Cognitive Shift....................................................................... 111

    10.4 The Tools We All Need................................................................. 112

    10.5 Shifting Beyond the Hierarchical Mindset................................... 114

    10.6 The Pattern for Change with the Thinking Process Tools.......... 114

    10.7 Building the Core Conflict Cloud................................................. 115

    10.8 Finding the Breakthrough Solution with “Injections”..................120

    10.9 The Future Reality Tree................................................................121

    10.10 A Real-life Example from Core Conflict to Future Reality Tree...... 121

    10.11 Creating the Continuum from Systemic Strategy to Action.........130

    10.12 Gathering and Deploying Knowledge to Reach the Goal........... 131

    10.13 How to Cause the Change—Obstacles Along the Road to Change..............................................................................................132

    10.14 Making the Change Happen with the Transition Tree................133

    10.15 To Summarize: The Cycle of the Thinking Process Tools

    in the Decalogue...........................................................................135

    10.16 Understanding, Knowledge, and Science in a Conscious

    Organization..................................................................................136

    11. New Intelligence—New Leadership—New Economics.............139

    11.1 Role of the Leader...........................................................................139

    11.2 New Leadership Methods and Tools.............................................. 141

    11.3 Leading with Critical Chain............................................................. 142

    11.4 Leading with the Thinking Process Tools and Intelligent

    Emotions.......................................................................................... 142

    11.5 A New Economics........................................................................... 145

    11.6 Flawed Economic Models............................................................... 147

    11.7 A New Outlook on Value and Wealth............................................ 147

    12. Essential Knowledge for Leaders and Managers

    (So They Can Manage Systemically Without Being Experts in Everything)..........151

    12.1 Where Can We Learn the Right Stuff?............................................ 151

    12.1.1 The Problem with Business Schools Today......................... 152

    12.1.2 The Business School Conflict............................................... 154

    12.1.3 A New Systemic Learning Pattern for Complexity.............. 155

    12.1.4 Mindset, Values, and Ethics.................................................. 156

    12.1.5 A Word About Experience................................................... 157

    12.2 Where Do We Start? A Systems View............................................. 158

    12.2.1 Being Process Oriented........................................................ 158

    12.2.2 Mapping the System with Flowcharts..................................160

    12.2.3 Getting Started...................................................................... 162

    12.2.4 Setting the Goal of the System.............................................166

    12.3 The Two Major Keys to Management: Variation and Constraint.......167

    12.3.1 Variation and Management Decisions.................................. 167

    12.3.2 Understanding Variation.......................................................169

    12.3.3 Variation and Processes........................................................ 170

    12.3.4 Working with Variation......................................................... 171

    12.3.5 Gathering Data...................................................................... 171

    12.3.6 How to Make a Process Behavior Chart.............................. 175

    12.3.7 Prediction and Forecast........................................................ 176

    12.3.8 Stability and Quality............................................................. 176

    12.3.9 Specification Limits and Behavior Limits.............................177

    12.3.10 Variation and the Fallacies of Budgets and

    Performance Assessment....................................................181

    12.4 Synchronous Management: Choosing and Managing

    the Constraint..................................................................................182

    12.4.1 The Systemic Model and Performance.................................183

    12.4.2 Unbalancing a System around the Constraint.....................184

    12.4.3 Protecting and Controlling the System: Buffer

    Management..........................................................................185

    12.4.4 Subordinating to the Constraint: Buffers and Variation......186

    12.4.5 Using Control Charts to Size the Buffer...............................189

    12.4.6 The Buffer and Performance Indicators...............................190

    12.5 Improving Flow Company-wide.....................................................190

    12.5.1 Improving Flow through Systemic Project

    Management (Critical Chain)................................................ 193

    12.5.2 Why Projects Fail.................................................................. 194

    12.5.3 The Problem of Milestones and Multitasking...................... 195

    12.5.4 Interdependencies and Variation..........................................196

    12.5.5 Measuring the Progress of the Project................................. 197

    12.5.6 The Decalogue Approach: A Project is a System................198

    12.6 Measuring Our Progress Toward the Goal the TOC Way.............202

    12.6.1 Constraints, Dynamics, and Organizations..........................203

    12.6.2 Indicators from the Theory of Constraints..........................204

    12.6.3 A Brief Digression on Speed and Time...............................206

    12.6.4 The Constraint and Cash Generation...................................207

    12.6.5 Situation 1: Market Constraint..............................................208

    12.6.6 Situation 2: Internal Constraint.............................................208

    12.6.7 The P&Q Exercise.................................................................209

    12.7 Interacting Systemically along the Chain with Customers and

    Suppliers..........................................................................................213

    12.7.1 Finding Agreements that Maximize Value for the

    Whole Chain.........................................................................213

    12.7.2 Marketing and Sales as Systemic Activities

    (External Constraint)............................................................. 214

    12.7.3 Win–Win Sales...................................................................... 216

    12.8 Continuous Breakthrough, Innovation, and Personal

    Development................................................................................... 218

    12.8.1 Creating the Right Network of Conversations

    through the Thinking Process Tools.................................... 219

    12.8.2 Intelligent Emotions..............................................................220

    12.8.3 Involving the Individual at Every Level in the

    Organization.........................................................................221

    12.8.4 Overview of the Essential Knowledge Pattern

    for Leaders and Managers....................................................223

     

    Biography

    Dr. Domenico Lepore is an organizational scientist whose focus is on systemic manage- ment. He developed the Decalogue™ management methodology, together with Oded Cohen, world- renowned expert in the Theory of Constraints. The Decalogue provides a method for whole system transformation, from conventional, silo thinking to a systemic vision and practice. Domenico and Oded coauthored the book Deming-and-Goldratt: The Decalogue, published in the United States in 1999 by Dr. Goldratt’s publisher, North River Press. This was the first book on the Theory of Constraints to be published by North River Press that was not authored by Dr. Goldratt himself. Domenico’s background is in experimental physics and he has developed an original insight into the design of organizations as networks of projects. He has led successful implementations of the Decalogue in dozens of organizations for almost two decades and unique applications of Theory of Constraints to highly complex business environments. Dr. Angela Montgomery has been partner of Domenico Lepore since cofounding their first Decalogue company in Milan, Italy in 1996. She has contributed over the years to the develop- ment, dissemination, and communication of the Decalogue methodology. Since moving to North America, she has developed a special interest in working with the Thinking Processes from the Theory of Constraints to bring systemic thinking for positive change to organizations. Angela has a PhD from London University in literature and science and has always been interested in crossing cultural boundaries. She blogs regu- larly for Intelligent Management and is author of the business novel The Human Constraint set in New York during the years of financial crisis. This book illustrates the power of a systemic approach and how it can point the way toward a sustainable future. Dr. Giovanni Siepe has a background in theo- retical physics. His research work on General Relativity has been cited internationally. He began working as a researcher in the microelectronics industry and he has developed patents in the field of power integrated circuits. He continued his career as a manager in the plastics/material industry, where he developed sig- nificant experience in international marketing. Over the last 12 years, Giovanni has worked at the advancement and dissemination of the Decalogue methodology, first leading the creation and development of algorithms and software (in liaison with the University of Salerno) for the management of complex systems, and later improving its integration with the use of Statistical Methods for managing organizational interdependencies.