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TOC Thinking Processes

What’s Stopping Your Business From Making More Money?

As an entrepreneur, you probably suffer from what Michael Gerber calls “busy, busy, busy”.

There’s always much more you which you could do…, should do.

But what really matters?

What is the main thing that is stopping your business from making more money?It’s an interesting question and it explains why I’m attracted to using the theory of constraints in my strategy coaching.

There are two techniques in particular from the Theory of Constraints Thinking Processes that we should talk about.

The first is the Prerequisite Tree.

This focuses your attention on the necessary conditions to meet your goal.

It’s particularly important for start-up businesses or those that have never performed well.

The idea is to focus on the individual things necessary for your success which together become sufficient.

It’s a bit like a jigsaw puzzle – you don’t get to see the full effect until every piece is in place.

But the jigsaw has been mixed in with other sets of pieces.

There are many things competing for your attention, but they don’t fit.

They don’t complete the picture.

The 1,001 other things you could do in your business take your time, attention and money but because they are nice to haves rather than must haves, they move you forward.

The Prerequisite Tree identifies the most important things to focus on and turns them into intermediate objectives.

We can find the items by asking “What’s stopping you from achieving your goal? Why haven’t you already done it?

The second important aspect of the Theory of Constraints Thinking Processes I want to focus on in this blog is the Current Reality Tree.

This works from the symptoms of your problems – perhaps not making enough money – and working back helps us to identify the core problem which will have maximum impact.

This is identifying the constraint.

And when you can see it, you can follow the Theory of Constraints principles and do something about it.

The constraint may be inside the business.

It may genuinely be a physical constraint – you could sell much more if only you could make it.

Or it could be a policy constraint. Unfortunately it is easy to get trapped by conventional thinking and do things because “that’s the way we’ve always done them” without appreciating the consequences.

Or the constraint could be out there in the market.

You could make more money if only you could sell more.

The Theory of Constraints has an answer for that too by developing what’s called an unrefusable offer or even a Mafia offer (think Marlon Brando saying “I’m going to make you an offer you called refuse” in The Godfather”).

This is the purpose of differentiating your business and explains my interest in the Theory of Constraints and the work of Eli Goldratt.

I recommend you take a look at this excellent book

The Logical Thinking Processes by William Dettmer

in 1 – Your KPI, 2 – Your Inner Game

In my review of the book

The Logical Thinking Process: An Executive Summary by H William Dettmer

posted on Amazon.co.uk, I gave it 4 Stars. This means that it is Good and Well Worth Reading.

Notice “An Executive Summary” in the title. This is very much an introduction to a topic brilliantly covered by the author’s much more extensive book, also called The Logical Thinking Process.

At the bottom of the page is a video by the author, explaining the differences between his process and that originally developed by Eli Goldratt.

Here is my book review.

Very useful overview of Goldratt’s thinking processes

The author has written an excellent book explaining how to use the Theory of Constraints Thinking Processes. However, if you learn a little, you can easily get scared off by the strange terminology in the original thinking like Evaporating Clouds and Current Reality Trees. [continue reading…]

in 2 – Your Inner Game, Best Business Books, Business Problems And Mistakes

The Evaporating Cloud Conflict Resolution Process

The Evaporating Cloud for conflict resolution is perhaps the most difficult of the TOC Thinking Processes.

This is because it forces you to challenge your basic beliefs about a situation, or more contentiously, to challenge the beliefs of someone else.

What better place to start than a 2 minute video featuring Eliyahu Goldratt, the genius behind the Theory of Constraints and the thinking processes.

Next we have an 8 minute video from a TOC study course on problem solving. I’ve skipped videos 1 and 2 of this sries to go straight into the evaporating cloud.

Next is the subsequent video in the same course which looks at testing the logic in the cloud.

Moving on to the following video, which looks at challenging the assumptions.

If you prefer to read, The Logical Thinking Process by William Dettmer is excellent.

[sos]

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in Business Problems And Mistakes

The Current Reality Tree with the TOC Thinking Processes

The Current Reality Tree is used to investigate the causes of an existing problem within the business system. It is part of the TOC Thinking Processes developed by Eliyahu Goldratt.

Here are two videos from Chris Hohmann.

Video 1 – Presenting a Current Reality Tree, for you to scrutinize

Video 2 – Scrutinizing and improving a Logical Current Reality Tree

It’s easy to have mixed feelings about the TOC Thinking Processes, to be both daunted but also fascinated by its power to reach powerful insights you wouldn’t find elsewhere.

The best book on this subject is The Logical Thinking Process by William Dettmer. There is also an Executive Summary.

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Don't forget to download and read my FREE Report - The SIX Steps PROFIT Formula: The Simple Rules That Every Small Business Owner Needs To Know available to download at Six Steps Report (Please click).

 

in Business Problems And Mistakes

Here is a 31 minute video of Christian Hohmann explaining the Goal Tree from Dettmer’s Logical Thinking Process (TOC thinking processes).

I like this a lot as it combines the goal of the business system, the critical success factors and the necessary conditions.

Problems within the performance of the business system, known as undesirable effects will come through somewhere on the Goal Tree.

[sos]

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in 3 – Your Strategic Positioning, Business Problems And Mistakes

William Dettmer’s Logical Thinking Process Videos

Leading expert, author and trainer Bill Dettmer is interviewed by Erik Mano about the logical thinking process derived from Eliyahu Goldratt’s Theory of Constraints Thinking Processes.

Introduction – Video 1

[continue reading…]

in Business Problems And Mistakes

The full title of this book by H William Dettmer is

The Logical Thinking Process: A Systems Approach to Complex Problem Solving“.

In my review at Amazon.co.uk, I rate the book at the FIVE Stars level, this means that I consider it to be excellent.

Here is what I posted.

A clear explanation of TOC Thinking Processes

On the one hand, the Theory of Constraints Thinking Processes can be powerful tools for investigating the current situation and identifying vital ways to improve the system in ways to meet the goal. On the other hand, they can be daunting to prepare and/or to understand because of the acronyms, unusual terminology and complexity of both the diagrams and their underlying rules. [continue reading…]

in 2 – Your Inner Game, Best Business Books, Business Problems And Mistakes

Theory of Constraints Handbook – 5 Stars

Theory of Constraints Handbook

I gave this very large, very intensive look at the Theory of Constraints a rating of Five Stars in my review on Amazon.co.uk.

Here is my book review.

The Serious Guide To The Theory Of Constraints

If you’ve read “The Goal” and a few other books about the Theory Of Constraints and you want to implement it yourself or through a specialist consultancy, this is the most definitive guide I’ve seen.

It is massive with 38 chapters which end on page 1135 before the Bibliography and Index… and that’s with a smaller print font than I’d ideally like.

Its size is both a strength and a weakness. I’ve had it for five years and I use it to dip in and out of as a reference rather than as a book to read from start to finish. Its bulk is intimidating and it’s heavy to hold. [continue reading…]

in 8 – Your Systems, Best Business Books

It’s Not Luck by Eliyahu Goldratt

In my review of

It’s Not Luck

by Eliyahu Goldratt posted on Amazon.co.uk, I gave it Three Stars. This is Worthwhile.

Here is my review.

A story using the Theory of Constraints in the market where lack of demand is the constraint

I read It’s Not Luck when it was first published in 1994 and have read it several times since but I still think it’s a disappointing book.

I loved The Goal by Eli Goldratt. It is an insightful business book which revealed simple and powerful ideas through a fast paced and engaging story. It brought the Theory of Constraints to the world and challenged some of the new ideas coming out to right the ills of 1980s/1990s accounting. It’s Not Luck is a pale shadow of it’s famous predecessor. [continue reading…]

in Other Business Books