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23rd International Conference of the

TOC Practitioners Alliance - TOCPA


www.tocpractice.com

21-22 March, 2016, Tennessee, USA

TOC Extended to Organization


Design
Jeff Schraeder
Circles of Clarity
USA
March, 2016

Jeff Schraeder
Experiences: 1966 - Current

Bell Labs Analog to Digital era

IBM Modern Mainframe era

COO of a technology company

Strategic
Advisor
to
Continental Insurance

Director of Systems Engineering STK

the

President

Entrepreneur:

Company Entir

Engine Performance

Convergent Works

Goldratt Consulting

Circles of Clarity

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JEFF@CIRCLESOFCLARITY.COM

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Constraints Where are they?


Society
Market
Organization
Process
People

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Where TOC Fits Today


Strategy (TOC S&T)
Structure (Organization)
Process (TOC DBR, CCPM, Distribution, etc)
People (Management Practices)
Market ?
Society ?
These elements are interdependent and iterative.
Changes in one of the elements will cause changes in
the others.
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Constraints How do they interact?

People

Process

Society

Organization

Market

Strategy

Addressed by TOC
Addressed by RO
Potential forGain
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Linkages
Organization Structure links the strategy to the
process
Management principles link the people to the
process
If these areas are strong, the impact of TOC will be
amplified
(experience shows that good processes can succeed
even in a poor organization and that a good
organization can overcome bad processes)

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Organization Structure

Number of management levels


Management Practices
Task Complexity
Capability of the People to handle complexity

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Conditions for Possibility


A having a healthy organization structure
requires:
Understanding the nature of work.
Understanding the capabilities of people.
Understanding behavior.

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

What to Change?

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

What to Change to:


An organization structure that fits the real
nature of the situation of getting work done
the strategy, the market, the nature of the
technology, the product, and the fundamental
characteristics of work and the people who
have to do the work.

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Building an Organization
Relational theories (such as TOC) are systems of
ideas that establish a verifiable and nonarbitrary relationship with the objective world
they apply to
Edgar Morin La mthode
Work should be the basic element that drives
organization design.

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

An Organization Constraint
Mismatch between the complexity of the tasks
that need to be performed and the capability
of the people performing the tasks.
Effects of the constraint:
Tasks too simple: Angry, bored, stressed
workers and managers
Tasks too complex: Angry, scared, stressed
workers and managers
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Matching

X
Z
Y

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Human Work
Try to parse this without a definition of work":

That was tough work doing the work they gave me


to do today at work.
For this discussion Human Work is defined as:
The exercise of discretion, judgment, and decision making in
carrying out tasks; driven by values, and bringing skilled
knowledge and experience into play.
Mechanical work = Force through Space
Human work = Decisions Through Target Time

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Principles
Management is full of bad, fuzzy terms. Real science knows that
you have to get particular in order to get something controlled

To measure work we need:


the equivalent to a thermometer
precisely defined concepts and terms
To manage work we need:
An organization structure aligned to the work
Consistent Leadership practices
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Birth of a thermometer

Hot or cold had no metric just hotter or colder


Notice that water changed volume due to heat
Water could be enclosed in a tube as a toy
Notice that the change in water volume wasnt consistent
Mercury changed volume consistently with heat
Mercury could also be enclosed in a tube
The tube could be marked at freezing and boiling points
The distance between the marks became temperature

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Time Span
The Thermometer
The longest period that can elapse before the
manager can be sure that his subordinate has
not been exercising sub-standard discretion in
balancing the pace and quality of his work.
It is a measure of the size of the job.
It is a measure of complexity.
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Defining the level of work

Time span (The thermometer)


Skill and experience
Values
Available training
Lack of negative personality traits

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Modes of Mental
Processing
Concrete: (WL 1 4)

1.
2.
3.
4.

Declarative Perceptual-concrete thinking


Cumulative Imaginal-concrete thinking
Serial Conceptual-concrete thinking
Parallel Abstract-model thinking

Abstract: (WL 5-8)


Theory and strategy construction. Using conceptual abstract
thoughts and words to pull ideas together

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Work Level 1
Timespan Up to 3 Months
Declarative Argument from enumeration
The mind is dealing with work in the
restricted sense of what the eye can see.
Direct output

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Work Level 2
Timespan 3 Months to 1 Year
Cumulative Argument from classification
The mind is dealing not only with what the
eye can see but also at the image making
level
Management duties
Direct output
Managed output
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Work Level 3
Time Span 1 Year to 2 Years
Serial Argument from cause and effect
The mind moves into thinking about classes
of things and concepts
Management duties
Integration
Mentoring
Succession planning
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Mutual recognition Group


The first 3 levels are a:
Basic Triad
A mutual recognition group
Building block for larger organizations

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Relationships
Manager to Subordinate
The manager must be capable of adding
value to the work of the subordinate
This means that the manager must be able to
handle a higher level of complexity

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Building Up
Next Triad
Work level 4

Work level 3

Work level 2

Work level 1

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Higher Levels
Time spans:
Work Level 4 2 Years to 5 Years
Work level 5 5 Years to 10 Years
Work level 6 10 Years to 20 Years
Work level 7 20 Years to 50 Years
Work level 8 Einstein, Mozart, etc

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

S&T / Organization
Relationship
S&T 1 WL 5 Strategy formulation and future
thinking
S&T 2 WL 4 Converting strategy into necessary
conditions
S&T 3 WL 3 Coordinating multiple efforts towards
the goal
S&T 4 WL 2 Direct management of processes
S&T 5 WL 1 Direct output

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

S&T / Organization
Relationship
WL -5

WL -4

WL -3

WL -2

WL -1

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Management Practices

Hiring
Assignments
Evaluation
Succession Planning
Felt Fair Pay

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Hiring

Understanding task complexity


Evaluating capability
Correctly matching capability to complexity
Understanding potential

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Assignments
QQTR

Quality
Quantity
Time
Resource

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Evaluation
Are you operating at your maximum
potential?
Are your subordinates producing the required
quantity?

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Succession Planning
Manager once removed is mentoring his
direct reports subordinates
Manager once removed decides on
promotion to next level

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Felt Fair Pay


Fairly Universally Felt levels exist:
Roughly:
I 31% of X
II 55% of X
III X (the regional/local standard for this level)
IV 2 x X
V4xX
VI 8 x X
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Conclusions
TOC uses boundary constrained concepts
Leadership and management practices generally
lack such definitions
Providing boundary constrained concepts is the
first step towards science
Building an organization based on boundary
constrained concepts (or just understanding the
organization as given) enhances the power of
TOC
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

How does this help TOC?


A perceived DCE comes from the level at which you
think about a product or a service
Level 1 Things are what they are and cant be
anything else (Quality, Price)
Level 2 Things can be given a meaning and a
context (Reliability, Service)
Level 3 There is an awareness of other contexts in
which things can be integrated to create a
proprietary approach (Positioning, Relationship)

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Up Leveling
The mode of thinking determines the way a
company sells
TOC solutions create the possibility to change the
context around a sale
Raising the mode of thinking is necessary to achieve
sales success
Raising the mode of thinking of the company is
necessary for developing new DCEs
And so it goes ..
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23rd International Conference of the TOC Practitioners Alliance - TOCPA

Implementation of TOC
Evaluate the capability of the people to
handle changes in decision making
Taylor the presentations and training to
match the capability of the people
Balance the rate of change to the capacity of
the people to absorb it

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23rd International Conference of the TOC Practitioners Alliance - TOCPA

References

Requisite Organization Elliot Jaques


Human Capability Jaques, Cason
Executive Leadership Elliot Jaques
Core International Levels of Work
The Disruptive Competence Fabian Van
Vrekhem

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23rd International Conference of the TOC Practitioners Alliance - TOCPA