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Dynamic Strategy and Tactics Trees at #TOCICO16

TOC has an approach to implementing changes called the Strategy and Tactics tree.  I like the way the TOC community have approached these. They are "trees" because they explicitly acknowledge that at each level there is a strategy or approach and tactics required to reach that strategy. Said another way, one person's tactic is another's strategy. Most S&T trees I have seen also have common sections related to Building a capability (to reach the to strategy), Capitalizing on that capability, and Sustaining (or Grow) the capability. A TOC S&T Tree, attempts to define the what, why, how and governing assumptions at each level. (More references below.)

John Ricketts from IBM (author of Reaching the Goal) talked about his view that S&T trees should be dynamic, because the assumptions under which the S&T was built could change. One must be able to pivot as the underlying conditions change: customers, competitors, supply chains all change and can affect your approach.  I got the impression that John was focused on the overall strategy, although he said the ideas could apply at any level of an S&T Tree.

What is strategy? There are many definitions, but generally it has to do with the overall objective the organization strives to reach combined with elements of how it will get there.  I liked Porter's two options on a strategy, "Do what everyone else is doing (but spend less money doing it), or do something no one else can do."  

John described a number of elements he considers when thinking about strategy. First is the idea of the Blue Ocean strategy. Developing concepts / ideas that no one else can match. (Or even better, the competition think you are crazy in doing it, like what Fleetguard Filters reported earlier in the day.)  The next topic was the idea of Profit Patterns - there are known and familiar patterns that product/service profitability follows, and this needs to be part of the conversation in developing and reviewing strategies. Finally there is the Three Horizons Model that describes the time horizons over which businesses operate: current business, emerging stars, and seeds of the future.  John emphasized horizon two (the emerging stars) as the right area for S&T. Curiously, I most of the generic S&T's I've seen are around current offerings but bring new (emerging?) offerings to the market.  

Then there is the topic of Tactics. What do you do in response to the strategy? One of the big benefits of a clear strategy in large companies is that it helps to define the overall strategy while also giving clearer guidance to the somewhat-independent business units. This helps to resolve the global optima / local optima conflict, similar to what the representative from Boeing discussed. One type of tactic that John highlighted is dematerialization - the idea that less and less value is coming from physical good, and more and more is coming from information and data around those physical goods.  (Along with more and more services that are purely technology-based with no physical component.)  A similar shift in tactics is moving from people-led and technology assisted to technology-led and people assisted. Again, with the vast array of data being collected, computers are much more capable of finding anomalies than people. Rather than being "robots taking over the world," think of this as technology removing the drudgery, so humans can do the more interesting things. And whatever you do with your tactics around strategy, do NOT ignore technical debt: the "pay later for what you decide today" problem. 

John also talked about the TOC Six Questions for Technology (which originally came out of the Goldratt book Necessary But Not Sufficient). I really like these in general, as they guide you through why a new technology my interesting or useful. John added on top of these some other considerations: What are competitors doing? Are there risks associated with failure or rapid obsolescence? How urgent is it to bring in this particular technology relative to what is happening in the business?  Here are the six questions for those that don't know them:

  1. What is the power of the new technology? (Why is it so great? What can you do with it that you could not do before?)
  2. What current limitation does the new technology eliminate or vastly reduce? (How does this "power" remove a major problem within the business? How will it help us?)
  3. What policies, norms, measurements, and behaviors are used today to bypass the above limitation? (How did we work around the limitation?)
  4. What policies, norms, and behaviors should be used once the new technology is in place?
  5. Do the new rules require any change in the way we use the technology?
  6. How to cause the change?

For those who may be curious about S&T Trees, Dr Holt at Washington State has a description and some examples. Or there is a paper from Alan Barnard of Goldratt Research Labs, Introduction to Strategy and Tactic Tree Thinking Process.

Updating the Projects S&T Tree #TOCICO16

More notes from the #TOCICO16 conference