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.