One of the claims of the Theory of Constraints is that huge jumps in organizational performance (even in an organization of one) are possible.

And in fact, we see these jumps from time to time. In the 60’s, a little company, the Haloid Corporation, became a huge company known as Xerox. And in the go-go 90s, a little company called Google seemed to come out of nowhere with the mission of “Organizing the World’s Information.”

These are just two examples, of course. But if I cared to do so, I could document hundreds of cases of small companies that created huge jumps in their own performance — and you could do this too.

And of course, it’s also possible to create huge jumps in the other direction. For example, the Wall Street Journal recently had an article on “The Worst CEO for 2007.” One of the nominees was Philip J. Schoonover, the CEO of Circuit City. On his watch, the stock price of Circuit City has tanked from about $30 per share down to about $4 per share. Said differently, Circuit City is worth about 1/10th of what it was two years ago.

So let’s begin this year with a simple recognition. Organizations sometimes do experience huge swings in performance — sometimes up and sometimes down.

But can we do better than chance? Do we have real control over this or is it out of our hands?

I believe that we have real control. Far more than we understand most of the time.

In a future post, I’ll tell a bit of the Xerox story, and I’ll tie it in to a specific scene from the movie Apollo 13. If you think you know where I am going with this, this is a chance to show off a bit!


John Sambrook