In the previous article, I promised to write about rule clashes. Before I can do that, I need to set the stage a bit.

Let’s start with an assumption. Your organization, of whatever kind it may be, has a goal.

For publicly traded companies, the goal is making money. Or, as it is expressed most often in Theory of Constraints, “To make more money, now and in the future.” If the organization is a privately held company, we need to ask the owners of the company why they created the company. The goal may still be to make money, but it could be something else. In that case, making money may become a necessary condition for organizational success, but the not the goal of the organization.

When we talk about organizations such as hospitals, schools, local government, then we again go to the owners of the system. This may be impractical, and so the Board of Directors of the organization typically assumes that it knows the goal, but hopefully does some work to check their assumptions with the public from time to time.

The bottom line is that the owners of the system determine what it is expected to produce for them.

Doing this sets the goal, but it doesn’t determine what is required to achieve it. Typically, there are very many things that are necessary in order to consistently achieve the goal.

In the jargon of the Theory of Constraints (TOC), we call these other things “necessary conditions.” Sometimes, other terms are used, such as “needs of the organization” or “critical success factors.”

The necessary conditions (“NCs”) typically form a hierarchy, as shown in the following figure:

SIO map for a small not-for-profit healthcare organization

At the top of the figure, we find the organization’s goal. In this case, the organization is a small, not-for-profit medical center.

The goal is given as “Cost-effective improvement of the overall health of the community.”

Is this a reasonable statement of the goal of such an organization? Is it also a very general statement of what the local citizens want from the organization? I think that it is (but let me know if you disagree.)

Now, how to reach the goal? In the figure, two other conditions are shown as absolutely necessary in order to reach the goal. Those conditions imply that the organization will “2. Prevent illness or injury affordably” and “3. Cure illness or injury in minimum time.”

You may or may not agree with these two entries (entities) as being logically sufficient to reach the goal. One of the benefits of producing a diagram like this is that it allows people to more easily recognize where they agree, where they disagree, or where they simply need some clarification.

We can always “dive deeper” when constructing a diagram like this one.

For example, entities 4, 5 and 6 are more detailed than 2 and 3, and entities 7, 8 and 9 are even more detailed than 4, 5 and 6.

So how deep should you dive when constructing such a tree? In my experience, people often dive too deep. As a rule of thumb, a useful map usually has perhaps 20 or 25 entities on it. More than that and you are (in my experience) getting a bit too detailed.

You don’t have to create a simple diagram on your first shot, however. You can take an Agile approach, to borrow a term from the software development world, and produce your diagram in multiple iterations.

If your first efforts become too complex, you can simplify them in subsequent iterations.

You don’t need fancy or expensive tools to produce such a diagram. In fact, you can use nothing more than PostIt Notes and a big sheet of paper. I used this approach for more than 15 years and it was perfectly fine.

On the other hand, if you want to use your computer, you can. Microsoft PowerPoint has a perfectly adequate drawing capability. The figure shown above happened to be produced with a different tool, but I still use PowerPoint frequently.

Finally, if you buy Bill Dettmer’s book, “The Logical Thinking Process — A Systems Approach to Complex Problem Solving”, you’ll find that it includes a free edition (which is perfectly usable, by the way) of a tool for drawing all kinds of TOC logic diagrams.

Let’s get back to the important aspects of this diagram.

What we are doing when we create such a diagram is speculating as to what is required to achieve our goal. As such, we may or may not identify all that is required to acheive our goal. We may also include things that, strictly speaking, are not needed.

Ultimately, it is “reality” that tells us whether we have done all that is needed to achieve our goal. (If we achieve the goal, then by definition, we satisfied all of the necessary conditions to achieving it!)

This speculation is important. In fact, I don’t think you can manage well unless you can speculate effectively, and effectively share your speculations with others. The work to produce such a diagram, done in a group, is some of the most useful work you can do if you really care about the success of your organization.

In closing, I want to touch on one last issue. When we start to talk about the “clash of rules”, having such a diagram will be indispensable.

You see, when people recognize that rules important to them are clashing in some way, they usually “resolve” the clash by compromising (sacrificing, damaging) the degree to which one or more of the organization’s necessary conditions are met.

As an organization’s necessary conditions are compromised, the performance of the organization declines. It’s problems mount, and it is less and less able to meet the needs of the many people it affects.

In order to reach the goal, the necessary conditions to reaching it cannot be compromised. This is possible, but it’s not a triviality either.

This post is longer than I would like, so I will end it here. As always, your observations and suggestions for improvement are welcome!


John Sambrook