TOCICO CONFERENCE 2009 Fast Thinking Process Tools Part 1: The CRT An overview for TOC Experts

1. Part 1 of 3 What to Change? Fast! Part 2 of 3 What to Change to? Fast! Part 3 of 3 How to Cause the Change? Fast! TOCICO CONFERENCE 2009 Fast Thinking Process ToolsPart 1: The CRTAn overview for TOC Experts Why not complete a full TP analysis during this class? Presented By: James R. HoltProfessor, Washington State UniversityDate: June, 2009

2. Disclaimer • This material is prepared for TOC Experts. While lots can be learned by a TOC Novice, the material assumes a fairly solid understanding of the role of the Thinking Process Tools within the body of TOC knowledge. • This material touches upon all the topics of the TOC Thinking Process but should not be considered a full course in the Thinking Process. • The material is probably sufficient of a review for a TOC Expert prior to taking the TOCICO Thinking Process Exam. Novices are advised to perform several full, successful TP analyses prior to taking the TOCICO Thinking Process Exam. • The material represents a part of my best understanding and does not attempt to eliminate other excellent approaches nor imply that these contents include all that should be known • Keep Thinking! • Dr Holt

3. References: • Credit goes to the Avraham Y. Goldratt Institute for formalizing the early Thinking Process and for giving it freely to academics world wide. And to all those who contributed to my knowledge gained in snippets from a multitude of sources. • Goldratt’s Theory of Constraints: A Systems Approach to Continuous Improvement, H. William Dettmer, Quality Press, ISBN 0-973389-370-0, 1997. • The Logical Thinking Process: A Systems Approach to Complex Problem Solving, H. William Dettmer, Quality Press, ISBN 978-0-87389-723-5, 2007. • Thinking for a Change: Putting the TOC Thinking Processes to Use, Lisa J. Scheinkopf, St. Lucie Press, ISBN 1-57444-101-0, 1999. • It’s Not Luck, Eliyahu M. Goldratt, The North River Press, ISBN 0-88427-115-3, 1994. • The Choice, Eliyahu M. Goldratt, The North River Press, ISBN 978-0-88427-189-5, 2008. • Visual Thinking, James R. Holt & Richard A. Reid, Whoever will Print it, ISBN Soon, 2010. • Washington State University, for supporting the fifteen-year long development of the Fast TP tools as part of EM 526 Constraints Management and EM 534 Contemporary Topics in Constraints Management http://www.engrmgt.wsu.edu/ • TOCICO Thinking Process Exam http://www.tocico.org/i4a/pages/index.cfm?pageid=3316

4. Effect confirming the existence of the common cause Proposed Cause CRT History – Why it’s the TP So Hard? • In the Early days (1990), Trees were Positive Trees and Negative Trees. The CRT was a Negative one. • The relationships were called: Effect-Cause-Effect. • The existence of very entity we proposed as a Cause had to be confirmed using Predicted Effect. Effect

5. Entity confirming the existence of the cause Entity confirming the existence of the cause Proposed Cause Entity confirming the existence of the cause Proposed Cause Driving / Diving Down is Tough! • Eli drove down four layers to get to the core Problem of the Sales Marketing Tree. • It took so much energy that he created a two day seminar just to explain it. • That seminar formed the basis for IT’S NOT LUCK Effect Proposed Cause

6. Refined CRT Process • By 1992 the full Thinking Process process was created and taught by the Avraham Y. Goldratt Institute. The first public documentation of the UDE approach was documented by Bill Dettmer in Goldratt’s Theory of Constraints: A System Approach to Continuous Improvement. • This didn’t do away with Effect-Cause-Effect, it just simplified it. • After the CRT was formed, an inquiring mind could examine the CRT looking for conflicts and synthesize them into the Evaporating Cloud. Those who did this, learned a lot from the struggle.

7. The Communications Current Reality Tree Once a Current Reality Tree was created and a Core Problem selected, the CRT was studied to see the opposite sides of the cloud. ? ? • By magic, a Core Conflict was created which justified the continued existence of the Core Problem. Confusion PreRequisite • The Core Conflict is inserted to Create the Communications CRT. Assumption Assumption Assumption Need Need Assumption Assumption Goal UDE UDE UDE Entity Entity UDE Entity Entity Entity UDE UDE UDE Entity UDE Entity Entity Entity Entity UDE UDE

8. Still later, CRTs • About mid-1990s, the Three-Cloud approached emerged as a quicker way to get to the Core Problem (Core Conflict). • Using several Evaporating Clouds on dispersed UDEs up front helps find a Core Conflict early and accelerates the CRT Process. • Then, the CRT became more of a ‘confirmation step’ to insure the correct core conflict had been discovered. • The CRT is still a tool of discovery!

9. The Current State of the TOC Thinking Process • The Three Cloud Approach has proven very helpful in speeding the CRT process. • But, it’s not 100% perfect. There are times when the there is a Core Problem. • The Three Cloud Approach can push you to Pre-Conceived problems. • Luckily, the Robust nature of the TP’s alternating Necessary Based Logic and Sufficiency Based Logic (along with liberal use of the Categories of Legitimate Reservations) form a Self-Correcting Process. • The difficulty in creating a full TP process still blocked implementations. • How to do it EASIER, FASTER, and MORE CONFIDENT?

10. Obstacles to Thinking! • Injection: Use the Thinking Processes (they are EXCEPTIONAL!) • But, those who know them and should be using them are often blocked because: • The are hard to use • They take a lot of time • The are mental anguish • They expose our own weaknesses • They point out what we don’t know • They can be too easily criticized (scrutinized) by even those who know much less than we know. • “We already have a solution; we don’t need to think again.” IO The Thinking Process can be used effectively within an hour. Obstacles

11. Introducing the Fast TOC Tools • 1. Clear UDEs • 2. Three Cloud Approach • 3. CRT Template • 4. Key Injections • 5. FRT Template • 6. PRT Template • 7. TRT for Implementing

12. What is the Goal of the CRT?Why do it? What need does it fulfill? • Creating a CRT Surfaces our intuition • Often generates missing intuition • Develops / strengthens our understanding • Helps us find the Core Problem/Erroneous Assumptions • Validates the Core Conflict • Gains Buy-In/Cooperation on the problem needing to be solved (from those often far removed from the core)

13. Start with Good, Well Stated UDEs • Every System has UDEs. • Everyone in the system can expose a few UDEs. Some people can expose many. • Any system can be found to be complex. • Complex interwoven interactions contain just a few root causes. • Everyone can connect some valid ‘cause and effect’. • Everyone thinks. • Everyone is good. • So, How many UDEs do you need?

14. 42. We only need enough UDEs to validate the assumption/solution (in most cases). 40. TOC Experts know a lot about root assumptions and their solution in wide variety of complex systems. 32. Systems are blocked by some assumptions about reality. 34. Solutions to exist 30. A solution should have been found by now. 26. Everyone is good 18. We are looking for a simple solution 24. Every system has UDEs. 16. Adding complexity does not make systems simpler 26. Everyone can connect some ‘cause and effect’ 14. We need to find the few root causes 12. Complex systems have just a few root causes. 10. We have a complex system 22. Everyone thinks.

15. With Few UDES… If only a few UDEs are selected, they must be well selected, and worded. UDEs are real Problems, Annoyances or Concerns. - Not Facts of Life (that must be later invalided) - Not Absence of a Solution (causing pre-conceived direction.) - Not Tautologies (they cause self-justification; sneaking errors into the analysis). - Clearly negative. - A Full sentence. - Not a Compound Sentence. - Diverse but within the selected subject domain.

16. From UDEs to the Three Cloud Approach • The Three Cloud Approach seeks out the core conflict from three different views—sort of triangulation. • The core conflict is then validated with the Current Reality Tree • To start, we need three or more clouds drawn from the UDEs of concern. • Then, we can combine the three clouds through some creative manipulation of language into the core conflict. • Let’s look some UDEs from Project Management

17. Some Project Management UDEs There are too many expensive corrective actions Original due dates are not met There are fights about priorities between projects The Clients needs keep changing Never enough time Necessary things (information, specifications, materials, etc.) are not available on time There are too many changes There are budget over-runs Too often resources are not available when needed Our people are overworked There is too much rework Taken from: Draft manuscript of Project Management the TOC Way, by Eli Goldratt

18. D. Take some expensive corrective actions (or trim the project content). Select an UDE and Create an “One UDE Cloud” There are too many expensive corrective actions You may have to reword the UDE to further describe what you mean

19. B1. Bring the schedule back on track Assumption: Otherwise, we will miss due date A1. Do what we say we will do C1. Do not jeopardize the original commitment for content (stay in budget) D1’. Don’t take expensive corrective actions (or trim the project content). Build the First EC Story line: It seems there is always trouble with the schedule. To catch up, we must take serious corrective action or cut out something. D1. Take some expensive corrective actions (or trim the project content). Jeopardy? Jeopardy?

20. D. Make changes as the client requests Select Second UDE and Create another One UDE Cloud (from a slightly different area) The Clients needs keep changing You may have to reword the UDE to fit the “Necessary Logic” structure and describe what you mean

21. Assumption: Client demands the change B2. Honor our commitment to deliver what the client really needs A2. Deliver C2. Meet the original due date and budget commitments D2’. Don’t make the changes Build the Second EC Story line: Just when things are going great, the client changes their mind. This raises havoc with the job and other jobs. D2. Make changes as the client requests

22. D. Do Rework Select another UDE and Create a Third One UDE Cloud There is too much rework Again, you may have to reword the UDE to further describe what you mean

23. Assumption: We could never meet the schedule otherwise B3. Take actions to secure meeting the intended content A3. Meet all the demands C3. Be within the original budget and time commitment D3’. Don’t do Rework Build a Third EC Story line: We started the project as soon as possible (before specifications) to meet the tight schedule. And changes happen. D3. Do Rework

24. With the Three Clouds ... • Now you have three independent conflict statements of the problem area. • Make sure each cloud is well constructed according to the basic guidelines. • Each statement should represent the accepted situation (even though the logic contains some enormous intuition--causal assumptions--that you have learned to identify already) • We Don’t try to evaporate these clouds now. • We are looking for the Core Conflict

25. B1. B3. B2. D1. D3. D2. A1. A3. A2. D1’. D3’. D2’. C1. C3. C2. Now we are ready to Triangulate We want to dive down and find what really needs to be changed. Use the intuition we have to find more!

26. B1. D1. B3. D3. B2. D2. A1. A3. A2. D1’ C1. D3’ C3. D2’ C2. This is the idea.

27. B1. CB. D1. D2 CD B3. D3. B2. A1. CA. A3. A2. CD’ D1’ CC. C1. D3’ C3. D2’ C2. This is the idea.

28. CB. B1. CD D1. B3. D3. B2. D2. CA. A1. A3. A2. CD’ D1’ CC. C1. D3’ C3. D2’ C2. How To Match them Up: Continue creating each Core Conflict entity from the three corresponding entities of the three clouds.

29. B1. D2. D1. A2. B2. CB. CD B3. D3. A1. A3. CA. CD’ CC. D3’ C1. C3. D1’ D2’ C2. We cluster the concepts to arrive at the Core Conflict Entity You’ll need some creative wordsmithing to create one statement out of many.

30. AC. Meet original commitments Example: Project ManagementThe Goal? A1. Meet Schedule and Budget Commitments Usually easy. AC is pretty straight forward in this example. Something more general in nature than the individual cloud goals. A2. Meet Delivery and Budget Commitments What is the overriding purpose of this area of focus? A3. Meet Content and Budget Commitments

31. DC. Compensate for early mis-estimates or mis-considerations What is the Thing We are Forced to Do That We Don’t Want to Do? D1. Take some expensive corrective actions (or trim the project content). AC. Meet original commitments D2. Make changes as the client requests We are looking here for the BIG ‘D UDE ’ D3. Do Rework

32. DC’. Don’t Compensate for early mis-estimates or mis-considerations The Opposite, DC’ is Easier D1’. Don’t take expensive corrective actions (or trim the project content). DC. Compensate for early mis-estimates or mis-considerations AC. Meet original commitments D2’. Don’t make the changes D’3. Don’t do Rework

33. BC. Do whatever it takes to meet endangered commitment Finding Common BC B1. Bring the schedule back on track DC. Compensate for early mis-estimates or mis-considerations AC. Meet original commitments B2. Honor our commitment to deliver what the client really needs DC’. Don’t Compensate for early mis-estimates or mis-considerations B3. Take actions to secure meeting the intended content

34. CC. Don’t Jeopardize any other commitment Achieving Common CC C1. Do not jeopardize the original commitment for content (stay in budget) BC. Do whatever it takes to meet endangered commitment DC. Compensate for early mis-estimates or mis-considerations C2. Meet the original due date and budget commitments AC. Meet original commitments DC’. Don’t Compensate for early mis-estimates or mis-considerations C3. Be within the original budget and time commitment

35. Finally, the Core Conflict Cloud C3 (This one is sometimes called a ‘Generic Cloud’, if it is the Generic Problem’ of a whole industry or system) BC. Do whatever it takes to meet endangered commitment DC. Compensate for early mis-estimates or mis-considerations AC. Meet original commitments DC’. Don’t Compensate for early mis-estimates or mis-considerations CC. Don’t Jeopardize any other commitment

36. Here is another example from Team Management. Take the Core Conflict Cloud and Rotate it. B Have a High Degree of Group Cooperation D Base Recognition on Team Performance A Have a Successful Team C Encourage Individual Contribution Not D Do Not Base Recognition on Team Performance Not D Base Recognition on Individual Performance The full Team Management CRT is at: http://www.vancouver.wsu.edu/fac/holt/em526/TeamCRT.gif

37. Not D Base Recognition on Individual Performance D Base Recognition on Team Performance B Have a High Degree of Group Cooperation C Encourage Individual Contribution A Have a Successful Team Now it’s On end

38. Turn the Arrows Around Base Recognition on Individual Performance Base rewards on team performance Encourage individual contribution High degree of group cooperation Have a Successful Team

39. Adjust the working to “If .. Then …” Logic There is pressure to base rewards on individual performance Don’t base rewards on team performance There is pressure to base rewards on team performance Base rewards on team performance High degree of group cooperation Encourage individual contribution We need individual contributions We need a high degree of group cooperation We want to have a Successful Team Have a Successful Team

40. Individuals don’t really know how they will be measured. Team tasks frequently change (and are often self-determined Individuals respond to individual rewards Individuals tend to perform in accordance with measurements The team’s work is mostly individual effort Effective teams have a high degree of synergy Add in at least one Assumption for each arrow (the one you want to break) There is pressure to base rewards on team performance There is pressure to base rewards on individual performance We need individual contributions We need a high degree of group cooperation We want to have a Successful Team

41. Notice the Key Words Added. They help you make your flip Confusion There is pressure to … There is pressure to not … (Assumption) (Assumption) (Assumption) We need … We need … (Assumption) (Assumption) We want ...

42. Individuals don’t really know how they will be measured. Team tasks frequently change (and are often self-determined Individuals respond to individual rewards Individuals tend to perform in accordance with measurements The team’s work is mostly individual effort Effective teams have a high degree of synergy Note the Mapping back to the Original Core Conflict Cloud There is pressure to base rewards on team performance D' D There is pressure to base rewards on individual performance C We need individual contributions B We need a high degree of group cooperation We want to have a Successful Team A

43. Extending Upwards is now Easy 164 Individuals will not believe their individual performance matters all that much to the organization. 162 Individual will look more towards individual success (local Optima) 160 Individuals don’t really know how they will be measured. 145 There is pressure to base rewards on team performance 150 There is pressure to base rewards on individual performance 151 Team tasks frequently change (and are often self-determined 125 Individuals tend to perform in accordance with measurements 140 Individuals respond to individual rewards 135 We need individual contributions 130 We need a high degree of group cooperation 120 The team’s work is mostly individual effort 110 Effective teams have a high degree of synergy 100 We want to have a Successful Team

44. The Ice Cream Cone Shape 164 Individuals will not believe their individual performance matters all that much to the organization. 162 Individual will look more towards individual success (local Optima) Not D' Not D 160 Individuals don’t really know how they will be measured. 145 There is pressure to base rewards on team performance 150 There is pressure to base rewards on individual performance D 151 Team tasks frequently change (and are often self-determined D' 125 Individuals tend to perform in accordance with measurements 140 Individuals respond to individual rewards 135 We need individual contributions 130 We need a high degree of group cooperation C B 120 The team’s work is mostly individual effort A 110 Effective teams have a high degree of synergy 100 We want to have a Successful Team

45. The Revised Ice Cream Cone Base Region of Not D’ Region of Not D Conflict Confusion There is pressure to do D D There is pressure to NOT do D D’ B C A

46. The Cone Shape Then Leads to... The addition to the Base divides the CRT quickly NOT A • If you don’t have D (Not D) then you can’t expect to have B (Not B) NOT C NOT B • If you don’t have D’ (Not D’), then you can’t expect to have C (Not C) • If you don’t have B (Not B) nor C (Not C), you can’t expect to achieve A (Not A) NOT D’ NOT D D D’ B C A

47. Regional Map of a CRT NOT A • Using the Regional Map allows the CRT to Build up quickly • Shows what is missing • Allows a Thinking Process person to view the CRT and Scrutinize Quickly NOT C NOT B NOT D’ NOT D D D’ B C A

48. Where Are Your UDEs? May have a region that needs to be checked out! Did you miss something? NOT A UDE UDE NOT C UDE NOT B UDE UDE UDE NOT D’ NOT D UDE UDE UDE Being able to organize your UDEs by the Regional Map (similar to Black Boarding) simplifies and speeds up the CRT Creation Process. UDE UDE D D’ B C A

49. Don’t Force the Regions Regions tend to create feedback loops so look for them. NOT A Don’t put artificial UDEs in your Tree “just because”. “Check them out.” UDE UDE NOT C UDE NOT B UDE UDE UDE UDE UDE NOT D’ NOT D UDE UDE UDE UDE UDE D D’ B C A

50. The Process of Building the Fast CRT Not A UDE UDE UDE Not C Not B UDE UDE UDE UDE Not D’ Not D D’ D B C A B D A C D’ UDE