Imagine I am a new employee at your company and you want to show me around.
You would likely take me on a walking tour, first through reception then to the different departments: sales, customer service, legal, engineering, accounting, and production.
On this tour you would show me the different functions in your company.
Now let’s imagine that I ask people in the different functions about the problems they face each day.
What are the constraints that hold them back from doing their work?
People See Problems Through Their Functional Experience
People in each function will experience and describe a different set of problems. It’s likely that they will conclude that the problems in their function are also the problems that the entire company should be devoting itself to solve.
The receptionist will perceive that the problems lie in people’s unwillingness to answer the phone and return calls.
Sales thinks that the products are overpriced and that lead times to delivery are too long.
Customer service spends too much its time on expediting orders, not supporting buyers.
Purchasing doesn’t have enough lead time to make acquisitions.
Manufacturing is asked to meet impossible goals.
Which Are the Most Important Problems to Fix?
As you hear people in each function describe the problems in the company as they see them, how do you evaluate which problems take priority over others? Which ones are the most important to fix?
Lisa Scheinkopf says that this functional view puts you too close. You can see trees or branches on trees, but you can’t see the forest.
Instead of looking at functions, step back and look at the whole system of the organization.
Scheinkopf quotes her friend, John Covington. When asked how he approached complex problems, he replied “Make the box bigger!”
What did he mean by that comment? He was saying that sometimes we should look at functions in a system and other times we should look at the whole system. Too often we try to solve a systemic problem by looking at one function.
Step Back and Look at the Whole System
But the only way to decide which problem to solve is to find where the constraint is in the system. To do that we have to look at the whole.
We look at the whole because it enables our perspective to change. When we were looking at organizational functions, we saw a jumble of seemingly unrelated activities. But when we step back and look at the whole organization we can see a pattern. We can see a pattern of flow.
Raw materials and inventory flow into the organization. Inside the organization the raw materials and inventory are transformed into products and services. The products and services for customers flow out from the organization.
This output is the means by which your organization accomplishes its purpose.
The rate at which you generate output is the rate at which you accomplish your purpose.
All organizations want to improve the rate of their output because it improves the organization’s ability to accomplish its purpose.
And the way to improve your rate of output is to find the constraint. The constraint is the most important problem to fix.