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2015 TOCICO International Conference

Transforming Businesses Track



STEVE HOLT
Associate Technical Fellow
The Boeing Company

Succeeding in a Complex World: Practices to Enable Continuing Superior Performance
September 9, 2015

One of the most challenging aspects of a successful organizational transformation is the balance between promoting standardized work processes while simultaneously encouraging individual creativity and innovation for solving problems. The two can often appear to be in conflict. And, as the complexity of our products and organizations increases and our work is more widely distributed, we want standardization to encourage cooperation at the same time that the need for local problem solving is increasing and the dangers of improperly reacting to new, emergent factors increases. How then, do we encourage local innovation without taking away from standard work and without creating damaging local sub-optimization which blinds us to the need for change?

Often an organization in serious trouble can create a "burning platform” to convince everyone of the need to change how things are done. But, what if the company is increasingly successful? Ironically, establishing an initially winning strategy can set the organization up for significant future danger because it deludes people into thinking that they have everything figured out and that success is assured. Numerous companies have disappeared because they failed to recognize and react to emerging competitors, changes in market preference, new technologies, etc.

We have ample proof that Theory of Constraints methods work and work well. They can provide breakthrough improvements from practices which are conceptually quite simple, such as DBR, CCPM, and the Distribution Solution. But we also know that overcoming years or decades of traditional practice can be challenging and even after a successful TOC implementation the organization can backslide into past habits and decreasing performance.

Clearly the organization was not truly transformed; nor was it getting increasingly better from the increasing challenges. There must be something missing in the transformation.

This presentation will cover a number of the dangers organizations can run into and methods available to counteract the danger and to create a culture of agility and alert responsiveness that will recognize early signs of change such that the organization can act appropriately and benefit from the change, no matter what it might be. It will also cover a number of ideas as to what it behind backsliding after implementing TOC and provide a number of techniques to increase the potential for long term, success as an ever flourishing or even anti-fragile organization.

Topics to be covered include:

  • Recognizing and overcoming Cognitive Bias, the patterns of behavior that can be very useful in allowing us to benefit from past learning and actively harmful when they blind us to changes going on around us. This can be particularly harmful when the organization has been highly successful for a long time.
  • What it takes to create a workforce that can understand the intent and fundamental theory behind the organization’s actions and strategy such that they can take independent action to resolve emergent problems and take advantage of emergent opportunities. Without everyone having a solid understanding of what the organization is doing and why even in a successful organization people will simply carry out their specified orders and "best practices” and are unable to act appropriately if something changes. (Mission Command)
  • Provide a framework that can be used to make sense of emerging risks and opportunities to increase the odds of reacting successfully. (Cynefin Framework)
  • Creating a culture that recognizes and actively studies "surprises” and "near misses.” Both are often weak signals of deeper, emerging issues. The earlier they are recognized the better. Also recognizing the subtle Normalization of Deviance in which what is actually unexpected is increasingly taken as normal and the organization is lulled into a fall sense of security.
  • The use of methods like Ritual Dissent and Future, Backwards to break people out of pattern ruts and help make them become more sensitive to weak signals.

Work is increasingly complex. As complexity increases and the degree of organizational interaction increases and the amount of system slack decreases the odds of even a successful organization suffering a catastrophic failure increases. Even TOC companies are not wholly immune. But, the addition of selected methods and tools to help recognize subtle shifts and cope with the complexity can enable some organizations to continue to thrive no matter what happens.


STEVEN C. HOLT has been in management and engineering with Boeing in Seattle for over 30 years. During that time he has had the opportunity to study and practice a number of continuous improvement disciplines such as Total Quality Management, Systems Thinking, TRIZ, Lean, and the Theory of Constraints. He received his initial TOC training through Washington State University in 1997 and holds a Constraints Management Certificate from WSU, He has been a member of TOCICO since 2003. Steve is TOCICO certified in Project Management and is on the TOCICO Board of Directors. His primary focus is the application of TOC and related studies in the management of complex product development programs.

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