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Systemizing your approach to management


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H. WILLIAM "Bill" DETTMER. Senior Partner, Goal Systems International. Bill is one of the most recognized experts in the Theory of Constraints field and more specifically the Logical Thinking Process. …

H. WILLIAM "Bill" DETTMER. Senior Partner, Goal Systems International. Bill is one of the most recognized experts in the Theory of Constraints field and more specifically the Logical Thinking Process.

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  • 1. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 H. WILLIAM "Bill" DETTMER. Senior Partner, Goal Systems International. Bill is one of the most recognized experts in the Theory of Constraints field and more specifically the Logical Thinking Process. He has 8 years graduate level teaching of systems management, systems analysis, human factors, management control systems, organizational behavior and development, Theory of Constraints, Total Quality Management, and management of research, development, testing, and evaluation. More importantly, he brings a level of experience to these subjects that few in the world are able too. Bill has available on his website, a series of 12 brief papers called the "Systems Thinking Series." Each is 2-5 pages long and addresses a discrete aspect of systems thinking. He has 23 years' experience in military operations, logistics, strategic planning, operational planning, training, large-scale systems deployment, project management, and contracting. Delivered 20 facilities construction projects on time and under budget for foreign government and has successfully completed multi-national logistic support project 30 percent ahead of schedule and 25 percent under budget. Bill also directed a medical services program treating 110,000 people in remote third-world locations in less than 14 months. Bill has authored or co-authored the following books. Systemizing your Approach to Management Guest was Bill Dettmer, a Systems Thinker Related Podcast: Systemizing your approach to management,
  • 2. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Joe Dager: It is my pleasure today to have Bill Dettmer, the senior partner of Goal Systems International and author of The Logical Thinking Process. Bill is a long time Theory of Constraint expert and TOC consultant. I am quite honored to have him as part of my podcast today. Bill, could you give me an introduction of your organization and yourself? Bill Dettmer: Well, thank you, Joe, first of all for the opportunity to be with you here today. In answer to your question, I would say that my company is more of a consortium than it is a company. I work together with a number of people who are themselves experts in specific areas and in most cases they are experts in either functional areas or geographic areas that I can't reach. When I have an opportunity to work on a project of some sort that is either beyond my skill or knowledge base, I have other experts that I can draw on to bring in for those purposes. It's worked out very nicely because each of my associates is a consultant in his own right. They do the same thing. So, I've got a nice little network going here. And, that's basically how my organization functions. Joe: When I think of Bill Dettmer, I think of the logical thinking process. You have probably taught me more about the logical thinking process than anybody else. Your first book on that process was probably in the 90s, wasn't it? Bill: Yes, that was Goldratt's Theory of Constraints. I wrote that in 1996. That was when I was relatively new to the thinking
  • 3. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 process. I'd only had about three years' exposure to it. At that time, I think it was only about four years old as an organized methodology. I wrote that basically in self-defense because at the time I was teaching masters courses at the University of Southern California in systems management. I was incorporating TOC principles specifically on the thinking process in my course work. Unfortunately, teaching in a formal university environment, there isn't the time for the give and take of shall we call the Socratic approach or the brute force approach in learning. You've got a limited amount of face time in the classroom. You have to provide materials for the students to read ahead of time so that they have at least some basis for discussion, and taking advantage of that limited class time. There was nothing, absolutely nothing at that time - this is from 1993 to '96 - in that area. So, I basically wrote what I considered, what the university referred to as a course reader. I basically data dumped everything that I had in the notes that I took when I went through the Goldratt Institute's Jonah program. I just wrote it all out in note form. I said all right, if I had to translate this to somebody, how would I do it? I basically converted it into a book that was published, actually by a print shop at the university, in a soft cover. It was intended just as a course reader to support individual professor's courses. The students not only liked it, but one day I got a telephone call from the university's print shop and said we just got a call from outside the university that wants 30 copies of your course reader. It wasn't even connected with the course. And I said, "Where did it come from?" They said "Boeing in Seattle." That was a complete surprise to me.
  • 4. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 I said, "Well OK, what are we going to do about that? Well, we can ship it to them. Well, OK. So they did, and then low and behold over the course of the next six months we sold more than about 400 of those that way. I came to the realization - this is in 1994, '95. I think I better look for a publisher here, it's about time. So, I wrote the manuscript, I found a publisher. That publisher happened to be the American Society for Quality, their quality press division, and they've basically been my primary publisher ever since that time. One of the things that I learned as a professor at USC is that you have to really be on top of your game depth wise if you're going to stand on the other side of the lectern from the students because you've got to be deeper than one question in the subject matter in order to be able to teach it effectively. Joe: You have really developed the logical thinking process into using it as a tool for strategy? Bill: Yeah, that's true. The interesting thing I think that most people don't realize is that problem solving, which is what the thinking process was originally conceived for and strategy development are basically opposite sides of the same coin. All that strategy development is complex system problem solving raised to a medal level. You're now looking at it from a whole system business perspective on how this business functions within its competitive environment. Or even if it's not in a competitive environment, in whatever environment it does function in. So, rather than trying to find out using the thinking process why we can't get more widgets out the door which would naturally lead you into a process analyses and the lengths of the chain and all of the usual Theory of Constraints concepts, all you're doing is turning the same tool outward and saying all right, how does this
  • 5. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 business fit into the world or the environment in which it's functioning? Same process, same procedures, just a different target. Joe: When you think of Theory of Constraints, you think of it so much internally. This is an external method of use of it. Bill: Yes. You could actually, you could say that. But one of the things, you know, it's interesting that, and I'm glad you brought this up, because one of the things that I've discovered in using this for a strategic tool is that there was a crucial question that had been completely overlooked in the use of the thinking process for its first seven or eight years. You've been through all of the materials on TOC and you know that the three key questions originally were what to change, what to change to, and how to cause the change to happen. I realized very soon when I started looking at the application of the thinking process to strategy, that the key question, the very first question that ought to be asked is why change? Why change to begin with? This forced me to say, OK, I need to find some sort of a standard benchmark for what should be happening in a system's or an organization's world before I can determine what to change. In other words, what to change implies something's wrong. Well, against what standard do you judge that? You judge that against a standard of what should be happening. If you wanted to look at it this way, there are really four questions. The first question is what should be happening, what to change, and what to change to, and how to make the change happen. This kind of drove me in 2002 to start considering the addition of another tool to the thinking process panoply, specifically the IO
  • 6. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 map, or intermediate objectives map, which helps to define a system's goal and the limited set of critical success factors that enable that goal to happen. Then a hierarchy of supporting necessary conditions below that in order to make those critical success factors happen. Joe: When I look at the trees and the logical thinking process, one of things that I always struggle with is it seems very cumbersome to learn. Granted if I would take a class it might help. It seems like it's not, that it's not intuitive, or it's not something that... You know in today's world we're so used to opening up the piece of software, sticking a CD in and using it. Maybe that's the whole purpose because I got to think through it? Bill: Yeah, yeah. I would say that there is a certain element to that and it's not easy to learn, even if you have access to a book that's as comprehensive as "The Logical Thinking Process" book that I wrote. It's still; it's a tough row to hoe. I guess all I can say is when you're doing something as important as tinkering with the organization, do you really expect it to be as easy as just plug in a piece of software and enter some data into some blocks and let the computer do your thinking for you? I think most people for that the answer would be no. Although enough people have bought SAP that you would think that there's probably some counter opinions out there as well. Joe: I just happened to ask the other day, to a group of people, is anybody using decision making software out there besides the people that are selling it? Bill: That's a very good question. What was the response? Joe: I didn't get a lot of response back? Bill: I can understand that. Well, the short answer is that the basics behind the Logical Thinking Process are really what they
  • 7. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 called the category, what Goldratt referred to as the Categories of Legitimate Reservation. These are the eight rules that govern logical relationships in any system. Those are very simple when you start looking at them. But, it's when you try to say all right now how do I convert those into something usable in a specific situation that's both coherent and complete? Then you start getting into something that's a little bit more difficult. The tool that most... The thinking process that most people have had historically the most difficulty with has been the current reality tree. I was one of those people at the very beginning. I struggled. It took me three days in my Jonah Program to build my first current reality tree. And I said there's got to be a much easier more effective streamlined way to be able to do this without sacrificing any of the quality of the output. It took me years to figure out how to do that by a brute force approach. I finally got it now to where somebody who really understands the process and has the benefit of the using an IO map to start with can complete a current reality tree even the first time in about four or five hours. Maybe the quality of the first effort may not be so good, but you know practice makes perfect. You do it enough times and it comes out very quickly. Now there's no reason why any of these tools should take longer than a couple of hours to put together an analysis on the system. Joe: How do you get someone introduced to that process? Because I think that step into it is a big step. Bill: Yeah, that's an interesting question you ask and I cannot say that it's a real easy solution. There's an old saying that when the student is ready the teacher will appear. One of those kinds of things is what I think really applies in this area. People have to be ready or searching for something. This is not the kind of thing that you can force feed. This is not a technology-based marketing
  • 8. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 approach. In other words, you have to identify a need and say, "Well, take a look at this" because this may be exactly what you need. I find that I don't do much active marketing. My book, my website and so forth, basically does the marketing for me, primarily because if somebody's not really interested in logical thinking, going out and giving them a sales pitch or spam email or whatever overwhelming sales approach you might try, that's not going to get them interested. Joe: I look at the thinking process tools and I see the evaporating cloud and I see like five blocks up there and it seems really easy. Then the next thing I know is that I feel like my mind is saying, scribbling on a wall here with the whole thing and really breaking down the process. Bill: Yes, it is, it's actually a two way process. There's an inductive and a deductive component to it. But, the deductive component is the part that has to begin first. You have to start from the general and work your way down to the specific, then you can extrapolate back up to the general again. This is one reason why I like to try to start with a statement of the goal and the critical success factors of a system. Whether that system is an individual in his or her own life or whether it's a multinational corporation, start with that and now start deconstructing it down to determine where things are going wrong. Or get down into its component parts, analyze the interactions between the two and then patch it all back together again and go inductively to a solution. It can get to be very complex at times. But, the good part of it is that this methodology, it's not an individual thing. In other words, it doesn't require one person to sit down and do it all themselves.
  • 9. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 You can throw man power at the situation and in point effect, I think this process lends itself very well to coordinated groups, in other words groups of problem solvers. For example one of the... I'm about to start a thinking process course that will include a guy coming from Siemens Energy Division. They build big power generators that go into electric power plants here in the US. They have some major complex problems with their organization. A guy that's coming into this course has been trying to get into this course for the last three or four years. Finally, he's gotten through to somebody there that they've got complex problems that they can't solve basically any other way than with a systems approach to the whole thing. So, they finally said OK, you better go get this training. He's going to come and learn about this and he's already got a team of engineers there that are frothing at the mouth to get busy and start building. They built a wonderful IO map on their own just from reading the book. It's in some respects maybe a little more complex than it needs to be but you know that's what they put together. They like it. They're happy with it. They say this reflects the situation. Now they've kind of got the fever. You sort of have to get involved in it in order to do that. He's going to be going back with this knowledge and he'll be basically the internal facilitator for this because he'll know how to do the system and how to facilitate it. Joe: When I look at Logical Thinking Process, it seems like that it’s a step above the Five Why process. I'm a lean guy so I'm very familiar with the Five Why. How can you sit there and tell senior management we're going to solve the company's problems with Five Whys?
  • 10. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Bill: Yeah, you really can't. And senior management is really a special case. The people who are in the middle of the organizations are the ones who really appreciate these tools more than the folks at the senior level. Folks at the senior level are usually too involved with the big picture to get involved with the details. There are exceptions in this, but in most cases that's the case. Their attention spans, I like to say that a CEO has an attention span of a five year old child. If you can't get the message across in 15 minutes, forget it. He's on his way to the next meeting or the next issue on his plate. I've actually been in meetings where after the 15 minute point, I've seen the CEO sitting there jotting notes down, and it's not jotting notes about what's being said, it's notes about what's going on in the next problem that he's trying to solve. In other words, they've lost him already. The short answer is you cannot get them involved in the details of the process. All you can do is get them involved with the recognition that there is a problem, there is a process, and there are results that can come out of this process. One of the things that I discovered in the course of the seven or eight years after I wrote my first book is that CEOs will not sit still while you go through a 70 or 80 element current reality tree to identify the problem. They just will not. You have to have a way of getting your message across quickly. I basically figured out a way to distill the most complex trees, which are current reality and future reality, into what I refer to as executive summary trees. It's the same general content, the same conclusions, same general root causes or injections without all the detail. It looks more like a flow chart than it does a true logic tree.
  • 11. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 It is suitable for presentation to an executive audience and you can get the same essential message across in much less time. Then if they have detailed questions on well how did you make this leap from here to here, then you're prepared to show them detail, but only if they ask for it. That was not something that had ever been given to me in my original training. I don't think anybody even kind of realized that that was necessary at the time. In many cases they still don't. Executives just won't sit still for this set of stuff. So, you've got to be able to get in, get the message across, and get out. In the literary world, its common knowledge that it takes a lot more energy and effort to write a short story than it does to write a novel. The reason is because in the novel there's not limit to the size. You can basically write as much as you want in as much detail as you want. But in a short story, you've got to get it all compressed and without losing any of the essence, much more difficult to do. That is essentially the same, the big challenge, using the thinking process. On the one hand, you can't get away from doing the detailed analysis. If you fail to do that, you may end up solving the wrong problem or coming up with the wrong solution. But, when it comes to the presentation or the coordination of the results, you better be able to distill it down to something that can be dealt with in a short period of time because if you can't, you're going to lose them, you'll lose your credibility, the solution will be ignored. Churchill once said man occasionally stumbles over the truth but usually he just picks himself up and continues on. That's the risk that you run if you don't know how to present what you've done in a detailed analysis.
  • 12. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Joe: So really, it's an executive summary of the logical thinking process that you go through in the trees. Bill: Precisely. And the other thing that I've learned that you don't do is you don't give it to him all in one bite. I remember when I was in the Air Force, commanders always would say, "Don't bring me problems, bring me solutions." So, what we would have to do is we would have to come to the presentation with a complete soup to nuts summary of well, this is the problem we're up against and this is what we've decided to do, step by step, and this is why we think it's going to work and now we need your approval to implement it. And, the boss would say, "Right, go and get it, go do it, or no, don't do it that way, do it this way, but go get." Well, the problem is in most businesses, they don't want to deal, especially with the big important issues, in one 15 minute session. They recognize that there's a risk associated with making changes. They want to contemplate it a little. So generally, when I teach my students to use the thinking process in the organization, I will have them go through each of the tools individually in a separate session. It may take a month before they ever get to the future reality tree. It may take two months. But, they'll start with getting agreement that this is what the organization's goal and critical success factors are. Once everybody's kind of in agreement on that, then they go on and analyze the problem, come back a little later with a current reality tree that says well remember, we all agreed this is what the goal and the critical success factors are. OK, here are the areas that we're not meeting those, A, B and C, D, E and F are just fine, but A, B and C we've got problems. And here are the reasons why. The current reality tree gives those reasons why. Then you have the discussion as to do you agree with our
  • 13. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 analysis? Well, when you get the agreement with the analysis, now you have the charter to go ahead and say all right, solve those problems. Then you go away and you start working on the solution to the problems. You come back and you present the problems and say, remember, this is what we said the problems were. Well, here's what we've come up with in the way of solutions. You don't tell them anything that they don't need to know to make a decision. Make it slender and let them ask the questions on things that they want and then provide the information. That's the biggest problem that I had as a consultant was trying to tell them too much and losing the audience that way. I think many consultants are that way. You want, we want to impress people with our knowledge rather than solve their problems. Joe: We take all these “consultanize” things and all the different methods, it seems we still go back to Socratic questioning. It's really one of the better ways to learn. Bill: Yes, that's true. It really is. You just mentioned something that I think is critical to understand here and that is that neither the thinking process nor TOC in general are the be all and end all in the world of business or organizations. The big value, I believe, of both TOC in general and the thinking process in particular are that they absolutely excel as targeting mechanisms. I used to use the analogy of a gun laying radar in the military environment. TOC is a really good gun laying radar. It identifies the target. It zeros in and tracks it. And at that point, then the executive can decide what kind of weapon to put on that target. Is it going to be a missile? Is it going to be artillery? Is it going to be air to air? Well, the same type of thing. TOC and the thinking process can identify the problem and then the system manager or the
  • 14. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 consultant can decide well, the appropriate thing to use for this particular problem is going to be Lean or Six Sigma, or something along those lines. Let's say, design of experiments. We need to do some experiments on this particular situation to determine. In other words, you will pick out, it will identify problems in such a way that it's almost intuitive that well, this is the perfect tool. It comes from a completely different discipline but this is the tool that we need for this particular problem. Yet, TOC allows you to maintain that systems approach to make sure that you're not fiddling while Rome burns. Joe: You talk about your military experience and things and I really see the influence in your discussion of bringing Boyd's OODA loop into the process. Boyd was brilliant and never got really full credit, I think for... Bill: Yeah, you're absolutely right about that. Joe: I see Boyd's OODA loop being used more and more people in referencing of it, but I didn't realize you referenced it as much as you did and as early as you did in your processes. Bill: Yeah, that's true. I came by that in kind of a back door way. I have a friend dating back to the '70s who retired as an Air Force major general back in the early part of this last decade. And he went to work for a consultant, a defense consultant in the Washington D.C. area. We exchange emails on a weekly basis. He sent me an email one day and said hey, you ought to check this book out. This is really cool. It was a book by Robert Coram called Boyd: The Fighter Pilot Who Changed the Art of War. I said, OK, it looks kind of interesting. So, I picked it up. That was the first I'd ever heard of Boyd. It was really a biography. It wasn't a technical book. It was a
  • 15. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 biography. But, I became fascinated by it because they had to explain some of what he was talking about in his concepts in order to really give depth to biography. And I said, dang, this OODA loop is not only is it great, but it fits in beautifully to the kind of system thinking that I tend to groove on. So, I started learning more and more about it. I got in touch with Chet Richards, which was one of Boyd's accolades back in the days when they were both working at the Pentagon, and read Chet's book on it. I immersed myself in it and I said, "Man, this is great, this fits in so nicely with systems thinking and gee, I can just see how this folds seamlessly in with the thinking process because the thinking process is not a one time shot thing, it's an iterative process just like OODA loop is: you observe, you orient, you decide, and you act." Well, that's exactly what happens with thinking process. You're observing what goes on around you. In the orientation process you're building your trees and part of that is also the decision on what to do and then you go act. Well, but it doesn't stop there. It feeds you back to the beginning again. Once you've made a change to the system, you go back and you look at the results of the system and how is the system performing now. Wow, we need to do another reality tree because though most of it is the same, there are some changes. It's not performing in quite the way it was before. Hopefully, it's better, sometimes it's not. If not, why not. Well, that's the second issue, iteration of orientation. So, I really became very much interested in that. And, I have to say that the definitive volume on Boyd's philosophy and the OODA loop is a book called "Science, Strategy and War" by Frans Osinga. And it's a little deep reading, but if you'd read some of
  • 16. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 the like Chet Richard's book "Certain to Win," it's a natural follow on. It really is. And it dovetails, as I said, with TOC. It's almost like they were separated at birth. Joe: In reading the chapter that you put in the TOC handbook. I noted that even though we talk about iterative reaction and we talk about feedback, it's really proactive rather than reacting because we're doing it so quickly. Is that a fair take on it? Bill: It really is a fair take. And, this is the thing that I think is so wonderful about the OODA loop. And as an organization or a person goes through the UDE process, it can take varying lengths of time. Boyd would do it in a 40 second aerial engagement and go through it multiple times in that 40 second period. Organization takes a little bit longer but it need not take that much longer. They do it whether they're conscious of it or not. But, the fact that they are conscious of it makes it easier, shall we say, to direct that effort and force faster cycles of the OODA process. So, what is that except continuous improvement? I mean, you're deep in that area because of your exposure to Lean and Six Sigma, continuous improvement is an iterative process. The OODA loop is comparable to Deming's PDCA cycle. Joe: Well, I like to argue with most of these things. Master one of them because the five focusing steps, the OODA loop, the PDCA cycle, Deming, they're all very much the same. We have a little different tools that we use to get it and you have to master the tool set because if you go back to what I think about the Boyd thing and in a combat aerial thing, is that mastering the thinking process, you do it intuitively and you do it well. If you master Deming or if you master PDCA, you do it intuitively and you do it well and guess what, you run your business well.
  • 17. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Bill: Yes. There's an issue here that relates to the iteration, the repeated iterations or the repetitions, the doing it over and over and over again, the continual refinement. The idea is that when you go through OODA loop, every time you go through that loop, you know a little more about the system than you knew before and it keeps getting tighter and tighter and tighter and the cycles through the loop get faster and faster and faster. Well, one of the books that I really love and I happened on to it only as a result of reading more about Boyd's work, is a book called "The Book of Five Rings," and it's written by Miyamoto Musashi who died in 1645. He was the quintessential; he was the paragon of what a samurai warrior is all about. The guy was the best swordsman that ever lived. He wrote this book to summarize exactly how to be an expert swordsman. One of the things he said in there is that he said "practice is the only way that you will ever get to learn what the way of the warrior is about." Words can only bring you to the foot of the path. You must practice until intention becomes no intention and the sword becomes no sword. What that is basically saying is just what you said about intuition or intuitive application. He's saying "I don't need to see what's happening and consciously think about it. As soon as I observe it, I immediately intuitively do the right thing to act and the sword is not a tool in my hand, it's an extension of my arm." So, that's what no intention and no sword means. Well, what does this do except it allows you to skip over the decide step in OODA loop, and Boyd was very much in favor of it. He said if you are fast enough to observe and orient yourself, you can go directly to acts without having to decide what to do. That shortens your cycle, and it puts you inside your opponent's decision cycle. So, it's a real interesting gestalt. It all fits together here, and I think that the thinking process can be a real key part of that.
  • 18. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Joe: I think it is. But one of the things that - and this is going to be my Six Sigma side coming out. Don't you have to support all this with data? Don't you have to be formulating the data to do that because the data leads you down a path that allows you to... You can't be intuitive about everything because sometimes just the outward appearance of something lies to you if you don't have the supporting data. Bill: Yes, you're absolutely right. Where does the data become most important? The data is most important in the identification of the problem. It's not in the creation of the solution because that's a projection of what should happen in the future. It's not in the establishment of the goal and the necessary conditions because those are value judgments. But, when you start to analyze what the problem is, in other words when you're building the current reality tree, that's where data become really important. One of the key lessons I try to convey in my thinking process courses is the most critical of all of the categories of legitimate reservation is entity existence. Why is that the case? Because you're building a tree that reads, "If this, then that" through multiple layers, maybe 10 or 15, from a root cause all the way up to an undesired effect. You can have absolutely perfect lock-tight logic in every one of those connections. But, if one of the statements in there is erroneous or faulty or just flat wrong, then the entire thing falls apart. I use the example of the buffalo herd. Have you heard that one? It's been around on the Internet a little bit. It's supposed to be a conversation exchange between two guys from "Cheers." The two guys that sat at the end of the bar, Norm and Cliff. The mailman and the salesman, right? Cliff is explaining about the buffalo theory, and he says, "The human brain is like a herd of buffalo. It can only go as fast as the slowest buffalo. When buffalos are hunted, and the ones that are the weakest that fall back in the
  • 19. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 pack are the ones that are killed off first. This natural culling is good for the herd. It allows the herd to move at a faster rate." He says, "In the same way the human brain can only move as fast as the slowest brain cells." So he says, "If we kill off the slower or weaker brain cells, then the brain becomes a faster, more deadly machine." He says, "So, as we know, drinking beer kills off brain cells, so that's why the more beer you drink the smarter you feel." I used that example in the thinking process because I built a little tree out of it, and the logical connections are absolutely dead tight. But, there are two statements in that tree that don't have entity existence. One is that the human brain is like a herd of buffalo. The other one is that alcohol kills only the slowest brain cells. You take those two, and because you render them to be erroneous, the entire beautiful, logical construction is worthless. So, what I tell all the people who go through my course is, "You better be able to look at every block in that current reality tree and either find expert testimony or data to support the accuracy of that statement." So, that's where your data fits in, Joe. Joe: I think you're right on. I think that's a great message, especially for my audience when we talk about customer value and customer identification. I look at the logical thinking process is even a great way for, if you would master it, for a sales person for a marketing organization to take a customer through a buying process. Bill: Yes, it could very well be. Goldratt kind of did that back in 1994 with the beginnings of what he called the Mafia Offer. Basically, the concept was to build a current reality tree that showed that the solution to the customer's problem was the resolution of an undesirable effect that came from a certain point
  • 20. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 in the sales process. If the sales person shows how logically they are, what it is they're selling is the solution to the customer's problem. The place where most people go wrong, though, is... Well, consider the approach of most high tech companies. We sell solutions. Eli Schrangenheim said to this, “I hate that. How can they possibly say we sell solutions when they don't even know what my problem is?” That's a very key point there. How can you say, the only way you can say we sell solutions is if you try to put everybody's problem in the same box and it all looks like this. Well, that's not the case. Even if it is the case, every organization likes to think but we're different. Let me start with the basis that you're different whether you are or not, we'll start with what you perceive to be your situation and we'll work our way down to what your problem is. Then if you have the solution for that problem, then it makes your sales job a lot easier because now you can prove that by reversing the polarity on this unfavorable current reality tree with your solution all good things are going to come to pass. It could be very powerful. But again, you can't overwhelm them with detail. When it comes in the analysis, you've got to have that detail in order to be sure that you're right. But, when it comes to the presentation, there's a whole different, a whole different scheme is needed. That's one reason why my company's slogan is constructing and communicating common sense. There are two completely different animals there. The construction requires the detail and the comprehensive aspect of it, but the communication, you've got to now boil that down to something that resonates quickly. Joe: So, we go back to providing an executive summary? Bill: Yes, basically.
  • 21. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Joe: Then if you dig deeper in the subject or even break it off and go to some of the other decision makers within the organization who wants more detail, then you take them through that process. Bill: Right. And, you know what the toughest thing for a consultant to do using the thinking process is you go through this wonderful logical analysis, you come down to a root cause, and all of a sudden you realize oh, my God, their root cause is an area I've got no solution for them. It is so difficult to say I can help you to identify what your problem is, but I can't help you solve it because I don't have the expertise to do it. That takes a really big man or a woman to say I don't have your solution, but here is your problem, it's well identified. Now, this is another reason why I like to maintain a big network of professional consultants because that improves the chances that I can say I can't solve your problem but I have somebody that can. He is an expert in this area right here. It isn't me, but this is it. What have I done? I have not solved their problem directly but I have solved their problem because I have connected them with the right person. Joe: I think that's a great way to look at it because one of the best books that I have read on the sales process is by Mahan Khalsa with "Let's Get Real or Let's not Play." It is a Stephen Covey book and its really never have been given the credit that I thought it should have. What he does is he goes through a decision process and then he steps out and says 'let's get real about it,' we are either there, we have the solution or we tell them we don't. Move on. Bill: This is one of the things that I think is really valuable about the thinking process. I may even have an intuitive idea of what their situation is. Because if you see enough organizations of similar types, you can pretty well say that there is a high
  • 22. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 probability that they are suffering from the same kinds of problems. But, if you want to be a true neutral arbiter of the situation, you can go in. I could promise them that I may not be able to come up with a solution to your problem. But, I can guarantee you that we will identify what that problem is. Even if I don't have the solution for it, together we can find out who does and put you in touch with them. And boy, as soon as they realize that you are not out to try to sell widgets or software or something, in other words the whole effort is now focused on solving their problem, not selling your product and you are willing to recognize that maybe you don't have the solution, they become much more trusting of what you tell them. Joe: I think everybody tries to do that as a salesperson, to get on that side of the table with them. It is not about sitting across the table; get on the other side with him. We have all been taught that. But, it is pretty hard to let go after you have invested the time, because who is paying for the time. Bill: Yes. That is absolutely true. And unfortunately you have to... I feel that if I am going to be able to live with myself, I have to be able to say I have reached the limits to what I can provide this customer. Ethically I have to tell them they need to go someplace else. I will not try to tell them that I have all the answers. I think that there are a lot of consultants out there that say, we will partition your problem to fit into our little box here. That's what I call the Procrustean solution. Are you familiar with the mythology of Procrustes from Greek mythology? Joe: No. I am not. Bill: Well, in the old days the pilgrims used to make their up to Mount Olympus to worship the gods in Greece. And it was a long trek and they were on foot. They couldn't do it in one day. Invariably at the end of the day they got to the hut of Proclus
  • 23. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 who was sort of like the gatekeeper for Mount Olympus. They would spend the night at Proclus place and Proclus had one bed that would fit all people. If you were too short he would stretch you out like on a rack to fit the bed. If you are too big he'd cut off your feet till you fit the bed. That became the sort of like the catch word for the idea of partitioning the problem to fit a preconceived solution and consultants do that an awful lot. Now, we are going ignore these aspects of your problem here because I really can't deal with them. We are just going to work on this part of it. Or we are going to pretend that this doesn't exist or we are going to redefine it in a way that my tool will work. That's huge. That's a big huge mistake and is a disservice to the customer. And a consultant that gets a bad reputation from that deserves everything he gets. Joe: The other thing I want to touch base on is you use word the 'system thinking' a lot. Much as you use TOC and 'system thinking' sometimes is such a big umbrella, such a big term to people. What does that really mean to you? Bill: OK, that is a really good question. I don't know that we have the time to go into it in great detail. But, let's just say that most thinking is analytical and has been ever since the renaissance; the idea that systems are whole systems and are complex things. We have a hard time holding it in our head, and envisioning all of the interactions and so forth. What has typically happened over the last several centuries is that people tend to partition the system or break it down into its component parts. Something that is a little easier to deal with, in other words they try to bind the problem by this decomposition into parts. This is the process of what they call analysis. It is a breaking down of the system into simpler parts that they can deal with. The
  • 24. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 problem there is that it is based on an erroneous assumption, especially where systems particularly human systems are concerned. That is that "the whole is equal to the sum of its parts." That is apparently not true. And all you have to do is look at let's say the example of the New York Yankees from the last seven or eight years before this last World Series. George Steinbrenner went and put together the greatest collection of people that he could with the money that he had. The top guys Robinson Cano and Rodriguez and Jeter and all of these guys and pitchers. His intent was to try to put together the best team from the best individual parts well ignoring the fact that their success or failure is dependent on how these parts worked together. That's the synergy in a system. And that's what makes 'the sum of the parts' assumption erroneous. But, that's what happens as we break down systems into individual parts and just assume that if we polish all of those parts up and put them back together again they will function as the best possible system. It doesn't work that way. So, the system is not equal to the sum of the parts is actually somewhat less than that. Joe: The connotation I use real quickly since we are on TOC thing is the Herby thing or the Buffalo thing. The role players are so important. Not everybody can be a star. Bill: It is the interconnections, not the components themselves that are places where most systems break down. And when you can discover where those are, then you can tune the systems to capitalize on the interconnections. For anybody that's interested in getting more of a feeling for what systems are all about, or 'systems thinking' is all about, there is a source that I would send them to and it is not the one everybody thinks of, which is Peter Senge.
  • 25. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 It is Gerald Weinberg. Gerald Weinberg wrote a book on 'systems thinking' and it just came out in its 25th anniversary, a silver anniversary. How many books that you know of that had been in print for 25 years and are still selling like hot cakes. Weinberg's book is. And he as a professor at the State University in New York, I believe - want to say Binghamton but I am not sure, it might be Buffalo; it's one of the State Universities in New York. He has been teaching there for years. And he teaches 'systems thinking' and 'systems management.' Truth be told, I came to Constraint Theory and I gravitated to it because of my prior exposure to systems management. I was teaching at the University of Southern California in their systems management program and finding that what they were doing was basically violating their own systemic principles. They were looking to patch together a whole bunch of individual discrete tools to try to cover different parts of the system instead of, there were no real tools out there or concepts that were true system synthesis tools. I happened on Theory of Constraints and I said, “This is great.” This just fits in so nicely with what I am teaching my students in my classes because it really amounts to a systems thinking set of tools. That's really how I got into TOC was because of my prior involvement in systems management and systems thinking and the fact that there was nothing of a synthesis nature in what we were teaching. Joe: That's a great description because I see how that applies. That's really my theory of marketing. It is, not one thing works anymore. It is a collection. And what's important is not the single event, the single ad, the single white paper. It is the strength of the connections between components.
  • 26. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Bill: Exactly right. Here is something you said just triggered this in my mind. There is a saying I have heard that "it's wonderful to find a little bit of logic to support the intuitive emotional decision you want to make." And the fact of the matter is that that is a kind of a microcosm for why the thinking process very frequently fails in organizations. It is because the truly logical message that it comes out with is in such diametric opposition to the emotion of the moment of the decision maker that there is just no way they are going to escape it, or accept it, I should say. And as a result, they do what Churchill says, they stumble over the trees. But usually they pick themselves up and continue on. That's one of the areas I have been working and most heavily over the last say three years. I am trying to come up with a rational explanation and a solution for why it is that even when perfectly good rational logical solutions such as the ones offered by TOC are presented to executives that one of two outcomes most often predominates. First off is it is either rejected out of hand or if it is reluctantly accepted, eventually it dies out and is not continued. My research in that area has been taking me into the areas, believe it or not, of neuroscience, to figure out how the human brain works, and how mental models become embedded in neural networks in the human brain, to the point that if it violates your mental model, it doesn't matter how much logic is there, you are going to do the wrong thing. There is another wonderful book and I have to recommend it very heavily by a guy named Laurence Gonzales. It is called "Deep Survival. Who Lives, Who Dies and Why." It is a very sobering look at people that are into extreme survival situations, shipwrecked at sea, lost in the wilderness. Some people manage to work their way through it very successfully, and other people just curl up and die or work themselves into deeper trouble. It all
  • 27. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 gets down to what they have convinced themselves in their brains and whether they are able to set these things aside. I strongly recommend that book because it gets into some of the same issues and it is what got me into the question of neuroscience. It led me to another author who happens to be a professor at USC that I didn't know about, Antonio Damasio is his name. And he wrote a book a classic landmark book in 1994 called "Descartes' Error." He goes into the detail for why logic is not the basis on which we make decisions but emotion is. Both of those books are really, really important reading I think. Joe: It is some great insight. Is there something that I left out of this conversation that you'd like to add? Bill: I can't think of anything right off hand except to say this. I love the thinking process and I decided to focus on that thinking process primarily because I saw it as being the most broadly applicable and flexible tool that Constraint Theory provides. I like that tool because of its flexibility, and it's scaleable. That's the thing that is so cool. An individual can use the thinking process to decide what they are going to do with the rest of their life. A middle manager can use the tool to decide how to solve the problems with which they are faced. And a senior executive can use the tools to develop the strategy, their long term strategy for the corporation. I've decided obviously since I wrote the book on Strategic Navigation. That's the area that I really like to focus on is helping companies to decide "where am I going and how do I get there." Joe: I just ask one simple question before we leave here. Which is the favorite book you wrote? Bill: I would have to say that "Strategic Navigation" is probably the favorite book that I have written because I takes the reader into the realm that I am most fascinated with, the whole concept of strategy development and deployment. That's the one that I
  • 28. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 like the best. Now, on the other hand, I have a great affection for logical thinking process which is, it started out as a second edition of 'Goldratt's Theory of Constraints' that I wrote in 1996. At least when my publisher contacted me and asked me, you want to do a second edition, I said sure. I realized very quickly that the methodology had evolved so drastically in the ten years since I had written it, that what I was writing was really a completely new book. When I taught the 'thinking process' in the late 1990s as I got further and further away from the publication date of "Goldratt's Theory of Constraints," I was having to supplement it more and more with handouts and additional materials. I ended up teaching the "Thinking Process" course in 2003, 2004 with a supplementary binder that was as thick as the original book that I had written. I said all of the stuff really needs to go into the book. My supplementary handouts are about 15 pages of exercises and things, because it is all in that book. I really like the 'Strategic Navigation' because that's the topic that is nearest and dearest to my heart. But, I probably am more gratified with logical thinking process at this point. Joe: I would like to thank you very much. This podcast will be available in Business901 blog and also the Business901 iTunes store. So again thank you very much. Bill: Well, thank you Joe, I appreciate it very much. You take care. And let's keep in touch.
  • 29. Business901 Podcast Transcription Implementing Lean Marketing Systems Systemizing your Approach to Management Copyright Business901 Joseph T. Dager Lean Six Sigma Black Belt Ph: 260-438-0411 Fax: 260-818-2022 Email: Web/Blog: Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R. Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coach’s role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event. Business901 Podcast Opportunity Expert Status