Rami Goldratt gave this morning's keynote talk on the topic of Management Attention. This is part of an ongoing discussion on the topic that has been percolating through the Theory of Constraints community: the real constraint for ongoing success is limited management attention. Not everyone agrees with this claim, though in the way Rami laid it out, it seemed to make a lot of sense.
The core of Rami's discussion is that management is responsible for making many decisions throughout the organization. And these decisions generally lay in two directions: maintain the current operations, or ensuring the long-term. Often the options available to achieve these needs are in conflict, so managers find themselves oscillating between long-term and short-term decisions. Unfortunately, some of those decisions are not only in conflict but actually do damage. For example, cut staff in response to market downturns is great for the short-term, but for the long term it isn't as easy to revert that decision. Or spend the money today to ensure access to a market in coming years, but then be in danger of not having enough cash to manage daily needs.
There is an interesting twist here. Not only do the resulting actions conflict with each other and potentially endanger the opposite needs, the two needs are actually reinforcing of one another. In order to get the long-term growth, we must have the near-term stability. And to ensure we have stability, we must have a path that takes us to long-term growth. They are mutually reinforcing in a never-ending cycle. No wonder management decisions so often feel fraught with hazard.
In a company of any size, there are a finite number of managers and a finite number of hours in the day. But then there are plenty of areas where decisions need to be made or where attention is required. In fact, in most cases there are most likely more decisions than there is attention available. Demand (on management) exceeds capacity. Why does this happen?
What has happened? The claim is that we have created elaborate, sophisticated systems that end up creating this excess of demand. And where has that come from? Three human fears:
- Fear of complex systems. Our natural response is a drive to subdivide and dissect the system into subsystems. And then each of the subsystems must be managed. And, of course, that management requires attention. Even worse, the management of the individual subsystems often drives to local optima, which can damage the success of the overall system.
- Fear of the unknown or uncertainty. The response here is to drive for more certainty and accuracy. We drive for finer and finer resolution or finer and finer details: project networks, forecasts, production plans, etc. (I see this one quite often in projects. We aren't getting success, so we must have more detail in the project networks.) The detail gives us the illusion of control, and it also drives us to make decisions that only move the system within the noise of the uncertainty. The result is a loss of focus on what matters. Again, more decisions (attention) that don't add value.
- Fear of conflict. Rather than meet the conflicts head on and resolve them, we tend to go for the compromise or the easy solution. This spawns other conflicts and other resolutions, again dividing management attention down to things which don't resolve the main problems.
One element that runs across all of these areas is the desire to create "sophisticated" solutions. All three of these "management errors" create a drive towards sophistication. But sophistication doesn't serve any real value. It hides our understanding of reality, and in many cases is used as a proxy for intelligence. "Look how complicated. It must be right."
So with all this identified as a problem, what do we do about it? The short form is to find a mechanism to develop harmony between the needs for both stability and growth. Rami suggested that the general approach of finding a competitive advantage (growth) and exploiting it (stability) is a good direction for a solution. Exploiting the competitive advantage should give management the time needed to develop the next competitive advantage while the competition scrambles to catch up. Repeat at and ever larger scale.
But how to get there? This is where the discussion goes back to some of the older writing of TOC. What is the core problem that the company can solve for its customers? What value can the company provide. Only when you know that can you devise a means to deliver that value in a way that will create the necessary growth. The discussion here reminded me of the Questions for Technology - questions designed to help think through why you are proposing a change and how to modify the implementation to improve the success possibility or resolve undesirable side effects.
This is going to require a lot more thinking and conversation with people who have been thinking about the topic.
Aside: While I enjoyed the basic thread of the logic of the Rami Goldratt discussion I was very disappointed with the style. Half the presentation was spent reading directly from a draft book that he and others are writing to flesh out these ideas. The content of the book is valuable, but putting it up on a screen and reading it is not a worthwhile way to presenting the ideas to an audience of 300 people. It also wasted the time of the session, detracting from Rami being able to finish his discussion.