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2015 TOCICO International Conference

Transforming Businesses Track

Albert Visser

How to Transform an Organization from Fragile to More Robust
September 8, 2015

Companies grow from a one man organisation to a larger organisation and that is achieved through the division of labour as the volume of products and services increases.

When the company is small then they experience very little internal flow problems because of lack of handovers between resources. However when the company grows more and more functions have to be broken up into specialized functions and we have more handovers between resources in the process and then more local decision making that impacts the flow in delivering the products and services.

Resources are grouped in Departments and then we have more departments that have a local responsibility and we have local policies that impact the flow. All functions in the organisation support the prime product delivery that turns the input’s (demand for products and services) into the outputs (products and services delivered). Companies grow and the more dynamic the manager the more his ability to add more resources to his department.

Very few companies that grow have the time to define the detail value adding processes with the organisation structure and we frequently find that people have to wear many hats. Sometimes the companies have positions that have very little to do with the flow of products and services and they are seen as a "staff function” So work is assigned to the individual that is seen to be reliable and frequently he will have to intervene in many positions in the process and he becomes the cause of the delay in the flow of products and services.

Management frequently has to engage with the value adding process to maintain the flow and hence they become another constraint in the process. Any implementation built on a standard organisation of which the processes is not clearly defined will be vulnerable to resources leaving the company (taking the knowledge with them) and changes in the market.

  1. If we want to transform a company from fragile to more robust we have to:
  2. Have clear accountability and responsibility for each function assigned to a resources ("AS is” "Stabilize the existing process)
  3. Remove Non value adding processes (creating capacity for change – both at resource and management level
  4. Re-design the process (if required) to ensure a logical flow and control (effectiveness model) and create the new responsibility and accountability with the individual resource
  5. Once this is achieved we can then implement the TOC policy (Because all we do in TOC is writing policy and writing policy on an non-defined flow (clear accountability and responsibility at the resource level) will deliver short term results but will fail in the long term

TOC implementation fails to deliver long term stability because of:

  1. Management capacity to establish the new capability required by the market due to the fast changing business environment
  2. Management ability to create a stable cost effective engine to deliver the products and services
  3. Capacity wasted on non-value adding processes
  4. Inability to manage the main process and sub processes as a whole.


If we want to make TOC sustainable in a company should we focus only on implementing the TOC policies or should we focus on getting agreement on each resource contribution in the value adding process and then focus on the implementing the TOC policies.

What if we can challenge the assumption that documenting all the processes in the company to resource level is expensive and will take a long time to do. Will that change our approach?


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