Theory of Constraints

Theory of Constraints

The prospect of change is scary for nearly anyone and that is where the theory of constraints comes in. Change can either have good or bad consequences, and in some cases, the only way to see the benefits or disadvantages is to go with the change. In the business world, change can be scary and trying, especially now when consumers expect higher quality for lower pricing, when consumers can receive and purchase these materials online, and where shareholders expect a higher rate of return on their investment than ever before.

In many of these cases, changing a company’s habits are met with disinterest or even hostility; sometimes changes are never implemented in order to keep costs low or because the possibility of failure is seen higher than that of the positive outcome. Managing change is the key aspect of the theory of constraints.

Change shouldn’t be thought of as change, but as improvement. Certainly, every business wants to improve something about their organization, whether it be product sales, customer service or customer loyalty. Improvement can be seen a much better word than that of change – improve means to be better, while change can usually mean the unknown.

The theory of constraints is a scientific way of understanding and improving systems; a cause and effect thinking. There are three essential questions that are asked when using the theory of constraints – what to change, what to change to, and how to cause that change.

What to Change: in organizations, a core conflict – an unresolved conflict between those that work in the organization – causes negative effects; these effects are then glossed over by implementing band-aid fixes, fixes that just treat the problem temporarily. By discovering what the root cause is and if it really is the problem, organizations can take the first step on solving the issue.

What to Change To: when a core conflict has been discovered and isolated, find how to change the behavior. For example, if communication between departments is the problem, what can the organization change to make communication better? Perhaps employees don’t know a person’s schedule or perhaps phone calls are lost; organizations should not only recognize the problem but what can be changed to improve the situation.

How to Cause the Change: in order to implement change, it’s important for organizations to know and be aware that there will be a resistance to change, which can block plans and strategies. Answering questions and answering them effectively will help put everyone on the same page; for example, lack of communication between departments can be solved by being aware of a person’s schedule or finding a better way of communicating, such as email. Those resistant may feel someone is stalking them or that company email will be filled with non essential mail or may even cost more than the company can spend. Good answers to this could be setting up a schedule between departments or allowing collaborative tools, like calendars and tasks that can facilitate communication better.

A company is as strong as its weakest link; businesses should ensure that everyone in the chain is in alignment and is strong and address any weakness before the chain breaks.

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David Peterson

David G. Peterson is a business consultant and author of Handling the Remedy. He has extensive international experience managing projects and operations for large financial institutions. He has worked in North America, Europe, Middle East and Asia skillfully managing business and technical requirements, core systems enhancement and support, merger and acquisition integration's, business process reengineering, off-shoring and outsourcing.