#NeoPrinciple

On a few occasions over the past year I’ve heard the same urban myth about theory of constraints. I wonder whether anyone knows the origin of the story? I’ve started referring to it as the #NeoPrinciple…. They are the one.

Theory of Constraints tells us a number of steps we need to take in order to improve a system. Identify the constraint, exploit the constraint, subordinate everything to the constraint, elevate the constraint, rinse and repeat. Theory of constraints tells us that adding capacity anywhere in the system other than the constraint is a waste.

So what if you do not know about the theory of constraints. You put a bunch of effort into the system but are unaware that you are having little impact. If you cannot identify the constraint, your impact is based on luck rather than judgment.

This is the basis of the #NeoPrinciple urban myth. There is/was a company where the management did not understand the theory of constraints. Within that company was an individual/small group of individuals (I’ve heard both variants) that did understand the theory of constraints. Those with the knowledge of theory of constraints were the effective leaders of the company. It was they that controlled the future of the company, not the management team.

I think the purpose of this urban myth is to add some spice to an otherwise boring subject. The myth is the El Dorado of subjects for those hungry for power and influence. Its a great subject for the pub where alcohol clouded judgment attempts to work out whether it is possible.

Of course, the other aspect of the #NeoPrinciple is that it is a cautionary tale. There are some powerful memes stalking the halls of companies these days. Some memes need executive support. Others just need an infection point. TOC is one of the later. The moral of the story is for the managers of companies, learn about new ways of managing your company. Its better that you have the pleasant joy of discovering the work is already started than to discover that someone has disconnected your tiller from the rudder for good.

Me, I’d like to know if anyone knows whether its based on a true story. Be great to hear from anyone who knows about it.

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About theitriskmanager

A IT programme manager specialising in delivering trading and risk management systems in Investment Banks. I achieve this by focusing on risk rather than cost. A focus on costs can lead to increased costs. View all posts by theitriskmanager

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