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Sustainability: Moving from Common Sense to Common Practice
2016 International Conference
Leesburg, VA - National Conference Center

September 18th - 21st

Managing Non-Profit Organizations for Better Sustainability: the TOC Way

Boaz Ronen - Professor of Technology Management, Tel Aviv University

Boaz Ronen

What is the new knowledge?

The new knowledge is a full scale methodology for improving the performance of Non-Profit Organizations (NPO). It focuses on the GOAL, performance measures for NPOs and Strategic Gating (SG) processes for these organizations. The new methodology refers also to two managerial phases – the planning phase and the execution control.

What is the impact of the new knowledge on the accepted Strategy and Tactic (S&T) Tree?

The new knowledge will enable government departments and agencies, hospitals, law courts, NGO etc. to increase substantially their Throughput at a given Budget.

Why change?

Managing Non-Profit Organizations (NPOs) is not on the same level business organizations are run. In many cases this is caused by lack of proper definition of the goal, and improper performance measures.

What to change?

Based on our experience in dozens of NPOs (government departments, government agencies, hospitals, universities, court systems, NGOs etc.) and an extensive literature survey, the root causes of the undesirable effects in NPOs lies in the following issues:

· Need to define clearly the goal of the organization/sub-organization
· Need to set properly defined global measures of performance
· Need to use a proper methodology for decision making that will also serve as a tool for ongoing improvement

We offer herein a methodology to define goals in NPOs and a set of global performance measures. We re-define Throughput for NPOs and present the EQ (Effective Quality) for these organizations.

Why was there a need for change?

More than half of the worlds' employers are employed directly or indirectly by NPOs. The annual budget of a medium size country or state is measured by hundreds of Billions of Dollars. Any improvement in the performance of an NPO can cause a huge change in the life of millions of citizens and reduce the inequality and the gaps in communities and Society as a whole. While Business Organization are improving dramatically using TOC-base transformation methods, the NPO world is lagging behind despite of the huge improvement potential. For example, the percentage of TOCICO presentations dealing with the NPO world is very small.

How do you measure, refocus, sustain and grow the change?

The effectiveness of change in NPOs will be measure by the same set of metrics by which we measure NPOs as a whole.

  • The presentation will discuss the following:
  • The importance of the topic and its improvement potential using the TOC-based methodology
  • A methodology that will assist the GOAL determination process
  • Adaptation of the 7 Focusing Steps to the NPO environment
  • Focusing on the Budget as the permanent constraint in most NPOs and its ramification to management decision making
  • Building a special type of Strategic Gating (SG) mechanism for NPOs and redefining specific contribution for the organizations
  • A TOC-based set of global performance measures especially re-defined for the NPO environment
  • Re-definition of Throughput (T) for NPOs
  • A definition for Effective Quality (EQ) for NPOs
  • The adaptation of GDM (Global Decision Making) methodology to NPOs
  • Examples of implementing the methodology in various types of NPOs
  • A full case study of the implementation of the methodology in a Technology Literacy NGO
  • A Strategy & Tactic Tree (S&T Tree) for the methodology will be discussed with equal emphasis on the planning and on the execution phases.

Boaz Ronen is a Professor of Technology Management and Value Creation at Tel Aviv University, Faculty of Management. He holds a B.Sc. in Electronics Engineering, an M.Sc and Ph.D in Business Administration. Prior to his academic career he worked for over 10 years in the Hi-Tech industry. His main areas of interest are focused on firms' value enhancement and TOC.

He has consulted to numerous corporations, healthcare organizations and government agencies worldwide. During the last 20 years, Prof. Ronen has been leading a team that successfully implemented focused management, TOC and advanced management practices of value creation in dozens of industrial, hi-tech, IT, healthcare and service organizations.

He has been commended numerous times and received the Rectors’ award for outstanding teaching. He was also a visiting professor at the schools of business of NYU, Columbia University, Stevens Institute of Technology, several Kellogg programs around the globe and at SDA-Bocconi (Milan, Italy). Prof. Ronen has published over 100 papers in leading academic and professional journals, and co-authored four books on Value Creation, TOC and Focused Management.

In 2005 he was the editor of the special issue on TOC published by Human Systems Management. His book on healthcare management was recently published by Jossey-Bass / Wiley. His book, "Focused Management: Doing More with Existing Resources", published by John Wiley & Sons, appeared in November 2007. Shimeon Pass co-authored both books. His latest book, "Approximately Right, not Precisely Wrong", on decision making, cost accounting and pricing, appeared in 2008.

In 2012 his work "Justice In Time: Applying TOC to Law Courts Systems" (with Shimeon Pass and Shany Azaria) won the Dr. Eliyahu M. Goldratt Foundation prize.

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