Innovation

The most famous paradigm you've probably never heard of

What would you think if someone told you some of your most cherished assumptions are actually the source of the biggest roadblocks you face? Even though it would be mighty unsettling, it'd actually be good news if you're a life-long learner and what they say turns out to be true. Most of us can recall the first time someone showed us a dramatically better database, language, or tool - and how the change was ultimately for the better. When change rips at our most fundamental assumptions, there's a name for it: "paradigm shift."

Such a shift began 25 years ago in manufacturing. You're in technical field so you're probably wondering what this has to do with you - but the answer is "more than you can imagine right now" because the same shift is headed your way.

The Goal by Eli Goldratt is a best-selling business novel that touched off the paradigm shift in manufacturing. It tells the story of a factory on the verge of collapse and how it's rescued by managers who focus their attention on the constraint that limits what the factory can produce. Though their actions defy conventional wisdom, they eventually save the factory, and they do it simply by more effectively using the resources they already have. To get there, though, they have to give up some assumptions they thought were rock-solid, but are actually what got them into trouble in the first place.

Theory of Constraints (TOC), also known as Constraint Management, is the widely acclaimed body of knowledge behind this paradigm shift. Three-fourths of top manufacturers have implemented TOC, yet most software and services practitioners have never even heard of it, let alone recognized it as affecting their world. But that's changing.

Managers can use TOC to improve multiple aspects of a services or technology business because many TOC principles are universal. For example, managers are often stunned to learn that just one constraint ultimately limits what their enterprise can produce. That's why process improvement initiatives so seldom lead to significant, sustainable improvement. It's also why optimizing every individual part of an enterprise fails to optimize the enterprise as a whole. Indeed, in their quest to optimize their own corner of the enterprise, managers and technicians alike often just wind up creating pain points elsewhere in the enterprise.

In contrast to TOC for Goods, which deals with fixed capacity and inventory management issues, TOC for Services deals with flexible capacity and resource management issues. Both versions of TOC encompass resources, projects, processes, finances, marketing, sales, strategy, change, implementation, and technology. They have to be this broad to produce holistic solutions instead of pain points.

Here's an example: A fundamental assumption behind conventional project management is people are most productive when doing more than one thing at once. Multitasking, as it's called, is an inherent part of many jobs nowadays. A second fundamental assumption is the best way to protect the project due date is to embed a margin for contingency into every task. After all, if every task can be completed on time, the project overall should be on time, too.

Nevertheless, consulting and technical projects are notorious for finishing late, so there must be a flaw in these assumptions. In fact, both assumptions are incorrect. Research shows unequivocally that the benefits of multitasking are an illusion. Multitasking is actually a drain on productivity that causes each task to take longer than it otherwise would. Furthermore, most contingency built into tasks is usually wasted even before people start work on their assigned task because they're catching up on other tasks they're already behind on. So these assumptions have negative effects that are the exact opposite of conventional wisdom.

Critical Chain is an alternate project management method from TOC that avoids these pitfalls. It eliminates multitasking, and it collects all the contingency into time buffers that protect the entire project rather than individual tasks. These may not sound like profound changes, but their effects are staggering. A project managed with Critical Chain is typically 25% shorter than an equivalent project managed the conventional way. Yet a Critical Chain project has a far higher probability of finishing on time. Of course, there's more to Critical Chain than this simple example, but it's sufficient to demonstrate why TOC is a paradigm shift coming to your neighborhood.

Dr. Ricketts is a distinguished engineer in IBM Global Services. His experience includes manufacturing, consulting, software, professional development, and managed services. He is also the author of Reaching the Goal: How Managers Improve a Services Business Using Goldratt's Theory of Constraints.

Editor's Picks

Free Newsletters, In your Inbox