Goal Setting

A dilemma diagram (without injections) related to the sports field project in Woodinville

A dilemma diagram (without injections) related to the sports field project in Woodinville

Let’s say that you are a member of the City of Woodinville’s leadership team.  You’re either on the City Council or you hold a position of significant responsibility and authority within the City.

You also want to improve the City’s performance.  You want to see the City succeed.  You also want to make your own life more pleasant and satisfying.  Maybe you even want to improve the work environment for the many wonderful people employed by the City.  In short, you’re looking for a win-win-win:  A win for the citizens, a win for the staff and a win for yourself.

Is there an “open channel” to doing this?  Is it possible?

I believe it is possible and that the key to doing it is beginning to adopt more advanced problem-solving tools than are currently used.  This adoption — if it happens at all — would require a willingness on the part of the City Council to no longer accept the status quo as good enough.  Will that ever happen?  Beats me.

But do you know — really know — how much opportunity exists to improve the performance of the City?

In saying this I am not intending to criticize what is done today.  We have excellent people, at all levels, and they are doing all that they know how to do to generate good results.  I have no doubt of this.

That being said, it’s sometimes the case that new knowledge and new ways of doing things allows the performance of a system (the City of Woodinville is a system) to be dramatically increased in a very short amount of time.

Now, to get to the point of this post.  I’m starting to identify some of the dilemmas that I have claimed exist surrounding the sports field project that the City has had in-work (along with improvements to the Carol Edwards Center) since 1999 or so.  I am posting these dilemma diagrams on flickr.  Note that you want to look at the photos (diagrams) in their “large” size or download them in their large size to your computer.

I haven’t described dilemma diagrams in detail.  However, if you’re interested, you can find more information on them here and here.  And of course, if you want the in-depth how-to-do-it book, you can find that too on Amazon.

I will be making movies (probably somewhat like this one) explaining these dilemma diagrams and some of the other artifacts I create as I work on this issue.

In the meantime, people who want to do so can follow my work on flickr.


goalsThis is the goal statement given on my home city’s website:

“As the elected representatives of Woodinville, the City Council understands that the purpose of the City is to fairly and equitably represent the interests of the citizens of Woodinville, and to carry out its lawful duties on behalf of citizens of Woodinville.”

Stripping out the prologue, we are left with:

“… to fairly and equitably represent the interests of the citizens of Woodinville, and to carry out its lawful duties on behalf of citizens of Woodinville.”

This statement is pretty good as far as ordinary goal statements.  But I think we can improve on it a bit.

First, I don’t sense a demand for continuous improvement in the statement itself.  Such a demand could be buried in the strategy and tactics necessary to achieve the goal.  I am not aware of any City documents that demand for continuous improvement on the part of the City.  Seems like a serious oversight to me.  If I’m wrong, and such demands do exist in City documents, I’d be grateful for a reference to them.

A second problem is the clause “and to carry out it’s lawful duties on behalf of the citizens of Woodinville.”

My objection to having this in the goal statement is that it’s really just one of many requirements that has to be met in order to achieve the condition promised by the first half of the goal statement: “to fairly and equitably represent the interests of the citizens of Woodinville.”

If I was writing the goal statement for the City, I’d write something like this:

“To produce more value for its citizens, now, and in the future.”

This says exactly what I want the City to do for me:  Starting today, I want the City to find a way to produce more value for me.  And then, on every following day, I want even more value produced for me.

I also want this for my fellow citizens:  I want the City, on each succeeding day, to be of greater value to my fellow citizens then it was on the day before.

Yes, I know, this is not easy. That’s the point. I need the City to do for me the things that are difficult for me to do. The easy things I can do myself.

My goal statement is demanding that the City follow a real process of ongoing improvement.  Why should we citizens insist on such a thing?

We should insist on this because there is no standing still in life. You are either improving, or you’re getting worse.  We live in a very competitive world.  New problems are recognized all the time.  Therefore, the City must be constantly striving to — and succeeding at — improving its ability to bring value to its citizens.

As citizens I believe we must do two things.

First, we must demand that our City constantly improve so that it can resolve these problems effectively, and without foisting them back on us in the form of higher taxes or wasted opportunities.

Second, we must offer ideas for improvement.  Anyone can go down to City Hall and offer comments during Public Comment.  Haranguing people is easy.  But can you do something constructive?  Can you do it in a way that avoids creating even bigger problems for the City?  Doing this is not a triviality.  As citizens, we can and should join in the hard work of identifying real solutions to the difficult problems faced by the people who run local government.  But we have to do it responsibly and we have to have a significant and net-positive impact.

Now our City today is pretty good, so none of this is meant to criticize the good work that is already being done. We are making progress and I’m grateful for that progress. Making progress is very difficult and the City Council and the City Staff deserve our respect and support. It pains me when I sometimes see citizens resorting to ad hominem attacks on our elected officials and/or members of the Staff.  Yes, I know you’re frustrated.  But creating walls of distrust is not the solution.

What I am trying to do on this blog and elsewhere is to point to the “open channel” — the many directions in which we can move to greatly increase the ability of our City to produce value for its citizens.

I’ll have more to say about goal statements in the future.  Specifically, I will write about the value of having a concise, 10 – 15 page plan that describes the strategies and tactics to be followed in order to achieve the goal.  I don’t believe we have such a plan today.  Please correct me if this is wrong.

p1000749.jpgDoes your organization seem to wander from crisis to crisis?

Does it often seem as if you are playing “Whack A Mole” with the problems in your organization?

If so, here is what is causing it: In improving one necessary condition you or your staff are allowing other necessary conditions to be damaged.

Let me start by explaining what is meant by the term “necessary condition.”

One of the core concepts of TOC is that a system only reaches its goal when all of its necessary conditions are met.

You can think of necessary conditions as the requirements for the success of your organization: What you simply must have in order to reach your goal.

If you are managing a dry cleaning business, one of your necessary conditions is “We are in compliance with local environmental laws.” That is, you can’t just dump your dry-cleaning chemicals in the nearest stream or down the toilet and expect to have a successful business in the long run. (Note that this assertion, like all assertions, rests on other assumptions. Here, I am assuming that the dry cleaning business is located in a city where there is environmental monitoring and laws against dumping harmful chemicals into the envirnonment. If one or both of these assumptions is wrong, then what I have claimed to be a necessary condition for success may in fact not be necessary at all.)

Every organization that I have encountered has many necessary conditions for its success. For example, “We bring value to our owners.”, “We have a highly satisfied workforce.”, “We operate in a cost-effective manner.”, “We are effective in responding to competitors.”, etc.

Sadly, not every organization I have encountered has done the hard work required to identify its necessary conditions for success and how they are related (in terms of cause-and-effect) to the goal of the organization.

Not doing this is dangerous to the health of the organization. Here is why.

An organization that has not yet reached its goal has one or more necessary conditions that are not met, or at least, are not fully met.

When the people in that organization recognize that that necessary condition is not being met it is very likely that they will try to take some kind of action to cause it to be met. More succinctly, they will try to “fix the problem.”

This is all well and good. It is good that the people in the organization have recognized that something important to the success of the business is not being achieved and that they are taking action.

However, what they must do in order to really improve the organization is to improve the satisfaction of that necessary condition WITHOUT DAMAGING ANY OTHERS.

Said differently, if you improve one necessary condition while damaging another all you have done is to trade one problem for another. And in so doing your organization will appear to wander from crisis to crisis.

Let me give an example.

Let’s say that the organization in question has recognized that one of its necessary conditions for success is “We provide excellent customer service.” It is also recognized that they aren’t actually achieving this condition. In fact, customer complaints have been going up and up over the last year and now management is determined to fix the problem once and for all.

In an attempt to fix the problem the management team determines that the problem is “Not enough sales staff on the floor.” and so they increase floor sales staff headcount significantly.

While this may have the desired effect of improving customer service it also increases operating expense. And in many organizations payroll is far and away the dominant operating expense.

If the increased customer service results in sufficiently increased and profitable sales then this may be exactly the right action to take.

On the other hand, what if the problem wasn’t really caused by too few sales staff on the floor, but rather, by a lack of proper sales training?

In that situation, the organization has not improved. Operating expense has gone up while customer satisfaction (and, presumably, profitable sales) has not.

This example is, of course, a very simple one. In reality the situation is not usually so clear-cut.

But that brings me to the point of this post. Why are such decisions not clear-cut? What can we really do to be better able to improve one necessary condition without compromising any others?

At first blush it might seem as if this is a thorny problem where nothing can really be done. I don’t think that is the case at all. In fact, I see the situation as one where so much can be done that it’s hard to know where to start.

So let me keep it simple and offer just three suggestions.

First, do the hard work to define the goal of your organization and then from it derive your set of necessary conditions and how they are related (in terms of cause and effect) to each other and ultimately to your organization’s goal.

I recommend doing this in a tree-structured manner (building what is called a “future reality tree” in the language of TOC). If you have not done this before feel free to contact me and I’ll help you get started.

Second, when you and your staff have determined your necessary conditions, publish your work in a highly visible manner. You really want every member of your staff to know what conditions they should be working to achieve. And, if they disagree with some of the conditions, you really want to know that too.

Finally, when people seek to make changes to improve the organization, ensure that they know how to do so without damaging the satisfaction of any other necessary conditions. An invaluable tool for doing this is the evaporating cloud (a.k.a. the dilemma diagram, a.k.a. the conflict resolution diagram) as is the “negative branch reservation” (NBR) in the TOC Thinking Process toolbox.

Self-proclaimed “Geekdoctor” John Halamka has written about an IT dashboard his team has created to help forecast some of the costs associated with operating a data center. I had a quick look at it. It’s a nice web application. I left John a comment to see if it is open source. I expect many IT types could benefit from learning about it.

What I would urge John to do is to go a bit further. Identify the critical success factors for his department as a future reality tree and then provide a color-coding of each entity that shows the degree to which that entity is satisfied.

For example, assume that there is an entity that says “Our department is highly effective in meeting our cost targets.” To what degree is that entity valid? If it’s clearly valid based on observable data then color it solid green. On the other hand, if the entity is in dispute, color it yellow while you go look for data. If it’s clearly false, color it red.

When I can make the time I will craft an example of this. It won’t be a web app though. While I have a lot of experience in software engineering I just don’t have the time to knock something like this out right now.  I might also look at the tools from Flying Logic Software.  I think their tool may already provide something along these lines.

What would you have if you actually did this? I claim you’d have a useful tool for focusing on the issues that are blocking you from achieving your top level objectives. Then share it as a web app so that the entire organization can see not only what you see as logically necessary to succeed but also how well you are doing.

So where are the CIOs that have the courage to do something like this?

Jack Vinson has published a review of John Rickett’s book “Reaching The Goal: How Managers Improve a Service Business Using Goldratt’s Theory of Constraints“.

In reading the review I think I will order a copy of John’s book. As my business is a service business it is certainly on-topic for me.

That being said I still have a significant reservation with much of what is recommended for improving organizations.

My reservation is that we are too focused on canned solutions: “Just do exactly this and you’ll get great results.”

I think we have to focus more on helping the many people who make up our organizations to learn to be more effective at recognizing and resolving the many issues that will come up in implementing any significant change.

In past articles I have written about the Towers Perrin study that suggests that 4 out of 5 employees is “disengaged” from their work. I think we should be focused on building organizations where most employees are fully engaged in their work. Teaching people to recognize and resolve the many conflicts they face on a daily basis is a necessary first step.

Many organizations use the SMART acronym as a guide to determine whether a given goal is Specific, Measurable, Achievable, Relevant and Time-bound.

In his article “When SMART Goals Are Dumb,” blogger Brad Kolar points out a common failure mode for such goals.

In short, it’s relatively easy to define goals that measure whether someone is busy or not, or whether some specific milestone has been reached.

Is this important? Yes, it is, but ensuring that people are busy is not the same thing as ensuring organizational success. Achieving well-specified outcomes is groovy too, but those outcomes have to somehow contribute to the success of the organization.

If you’d like your SMART goals to work harder for you, why not build them into a strategic IO map for your organization? I showed a very simple example of such a tree in my last post.

Building such a map is a very good way to reason about whether achieving the goals you have set is actually likely to lead to better results for your organization. Such a map is also a great tool for communicating with others in your organization.

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