Leadership: Working Together Effectively and Efficiently to Achieve a Common Purpose

Abstract

As Heifetz and colleagues put it: “People have long confused the notion of leadership with authority, power and influence. We find it extremely useful to see leadership as a practice, an activity that some people do some of the time”. In their words, true leadership entails that “leaders facilitate the necessary adaptive work that needs to be done by the people connected to the problem”.

The role of leaders and their leadership is to solve the complex problems facing their organisation. Such complex problems are often referred to as wicked; they span disciplines and organisations, and create constant tension amongst stakeholders and their objectives. Rittel characterised complex/wicked problems as exhibiting the following characteristics:

• Many wicked problems are only be fully understood after we have found a solution for the problem

• Wicked problems rarely can be truly solved, one is forced to live with the outcome one has achieved when one’s resources run out

• Solutions to wicked problems are neither right nor wrong, the judgement of a solution depends on a stakeholder’s inherent values and goals

• Every wicked problem is unique and novel, it will never again be experienced in this particular way

• Every solution to a wicked problem is a “one shot operation”, you cannot solve a wicked problem without trying a solution, but every solution has potentially unintended consequences giving rise to new wicked problems

• Wicked problems have no alternative solutions, an applied solution is the one out of many possible ones chosen and implemented based on its stakeholders’ judgement

The nature of today’s problems has created a VUCA world, a world of Volatility, Uncertainty, Complexity, and Ambiguity.

How do we best manage the wicked problems of our VUCA world? The most crucial step in managing these type of problems is to recognise and accept that the prevailing linear approaches to solve wicked problems in a VUCA world are themselves a hindrance to solving wicked problems. Wicked problems cannot be solved by a single person, they require a collaborative approach. VUCA problems require VUCA approaches, approaches of Vision, Understanding, Clarity, and Agility.

Learning, the creation and transfer of knowledge, is the only way to manage wicked problems. As Alvin Toffler put it: “The illiterate of the 21 ^st century will not be those who cannot read & write, but those who cannot learn, unlearn and relearn”. We are all leaders some of time, hence, we all have to learn that:

• We cannot command but have to seek the knowledge of our collaborators

• We always know more than we can say, and we always can say more than we can write. Written knowledge is reflective knowledge, valuable but not pragmatic in circumstances where decisions have to be made

• Knowledge is deeply contextual; we only readily retrieve our most important knowledge when demanded by circumstances

Leaders thus have to learn to lead and unlearn to prescribe solutions. Ron Heifetz described leadership as: leaders facilitate the necessary adaptive work that needs to be done by the people connected to the problem. Adaptive leaders allow others to grow, they:

• Give permission to experiment

• View failure as an opportunity for individuals and the organisation to learn

• Learn about the multiple realities that people experience in various parts of the organisation

Leading an organisation and facilitating its members’ adaptive work requires an understanding of the “organisation as a whole”, in particular that:

• An organisation is composed of many interdependent parts that all work towards a common goal

• The 80/20 rule applies, not all system/organisational components are equally capable or equally crucial to achieve its common goals

• An organisation’s constraints limit its ability to achieve its common goals. Leaders need to focus their organisation’s resources on those constraints as the most affective means towards achieving its common goals

Organisations with adaptive leadership:

• Create trust amongst all members

• Facilitate personal and organisational sense-making

• Maintain a focus on the organisation’s purpose, goals, and values

• Have a deeper understanding of the organisation as a whole, have a focus on understanding problems within their context, and appreciate the importance of the organisation’s culture

Appendices

Addendum 1

Medical Reductionism: Lessons from the Great Philosophers - Mark Beresford [ 32 ]

Recent years have seen significant improvements in the treatment of disease, many of which are the result of a better understanding of the intricate components and processes involved in cell biology. For example, our knowledge of cell proliferation pathways is becoming ever more detailed leading to the development of an increasing number of novel targeted therapies. Medicine is following a philosophy of “reductionism”: deconstructing a complex process into its component parts to enable better comprehension. Although this approach has obvious advantages in that identifying specific component malfunctions might lead to more effective and less toxic treatments, there are potential dangers in becoming too reductionist in our philosophy. The advantages and disadvantages of reductionism have long been debated by philosophers and thinkers and there is much to learn by revisiting some of their arguments with reference to the field of medicine.

The History of Reductionism

The earliest reductionist philosopher was Thales, born around 636 BC at Miletus in Asia Minor. He hypothesised that the universe was made out of water-water being the fundamental substance of which all others were composed. Reductionism was later re-introduced by Descartes in Part V of his Discourses.¹ He suggested that the world was like a clockwork machine, which could be understood by taking it to pieces and studying the individual components. Reductionism has since developed to encompass at least three related but distinguishable themes: ontological, methodological, and epistemic. In biological science, ontological reductionism is the idea that each system is constituted by nothing but molecules and their interactions and also establishes a hierarchy of chemical, biological, and physical properties. Methodological reductionism is the idea that biological systems are most fruitfully investigated at the lowest possible level and epistemic reductionism suggests that knowledge of a higher domain can be always reduced down to a lower more fundamental level. In modern cancer research, it is often methodological reductionism that predominates.

There are, however, potential problems with a reductionist approach:

• (i) Reductionism often arouses distrust: although reductionism aims to make things more intelligible, in reality the common understanding of the many tends to be replaced by the better understanding of the few. When a disease is explained in molecular and submolecular levels, it becomes difficult for the layperson to conceptualise. We see this in medical science, where even dedicated researchers are unable to have a full understanding of the cellular pathways outside of their immediate field of interest.

• (ii) Reductionism risks oversimplification of a process: in reducing something down do we merely eliminate certain aspects from our description of it? There becomes a point where the reduction becomes disassociated from the phenomenon it is trying to explain and exclusively reductionist research strategies can be systematically biased and overlook salient biological features. Again this is evident in medicine—although many “targeted” agents are now used in the clinic, it is fair to say that in most cases the benefits to patients have been relatively modest, despite sound theoretical principles and laboratory data.

• (iii) Reductionist explanations can sometimes lead to confusion over cause and effect: this is the classic “chicken and egg” problem. For example, is a disordered proliferation pathway the cause or result of a malignancy—which came first? We may not be targeting the root cause of the problem.

1. Descartes R. The Philosophical Writings of Descartes in 3 vols. Translated by Cottingham J, Stoothoff R, Kenny A, Murdoch D. Cambridge, UK, Cambridge University Press, 1988.

Addendum 2

Frames and Habits of Mind for Complexity Thinkers - Kevin Rogers et al. [ 14 ]

We find that the most important competencies that enable effective use of this integrative learning framework are psychological. They are ways of thinking that allow one to unlearn reductionist habits while adopting and embedding those more conducive to working in complex systems. We have adapted the educational learning concept of “Habits of Mind” developed by Arthur Costa and colleagues (Costa 1991, Costa and Kallick 2008) to foster intelligent thinking in school children.

A habit of mind is a pattern of intellectual behaviour that leads to productive actions. Habits of mind are seldom used in isolation but rather in clusters that collectively present a pattern of behaviours. When people are confused by dilemmas, or come face-to-face with uncertainties, their response is determined by the patterns of intellectual behaviour upon which they can draw. This implies that people should maintain an awareness of, and make conscious choices about, which patterns of intellectual behaviour (habits of mind) are most appropriate to use under which circumstances. A certain level of competency is then required to use, carry out, and sustain the behaviours effectively, and also to reflect upon, evaluate, and modify them for future use under different conditions.

Moving one’s self, or a group of stakeholders, from one position of competency to another is unlikely to happen unless thinking and doing are bounded by particular intellectual patterns. We recognise three broad frames of mind, each of which encompasses a set of habits of mind that are critical to leading participative planning and decision-making in complex social-ecological systems. These frames of mind are openness, situational awareness, and a healthy respect for, what we term, the restraint/action paradox.

Openness (See Text Box 1)

To embrace and effectively engage with complexity requires a certain psychological openness from individuals and institutions, especially when in transition from a predominantly reductionist paradigm. This openness can be described as a willingness to accept, engage with, and internalise the different perspectives, even paradigms, to be encountered when dealing with diverse participants in an interdisciplinary situation. An open frame of mind requires conscious acceptance that notions such as ambiguity, unpredictability, serendipity, and paradox will compete strongly, and legitimately, with knowledge, science, and fact. In essence, it means that while navigating challenges of a complex social-ecological system, one holds one’s own strong opinions lightly (Pfeffer and Sutton 2006) and engages as both facilitator and learner.

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Box 1: Habits of mind that promote patterns of openness in behaviour

• Hold your strong opinions lightly and encourage others to do the same

• Be prepared to identify and accept the intervention of surprise, serendipity, and epiphany

• Encounter every person with equal respect, listen for their specific needs, knowledge, and ways of knowing

• Be open to both/and options

• Do not reject ambiguity or paradox. They are to be expected and their acceptance as legitimate can often avoid dispute

• Cultivate, honor, and affirm the legitimacy of multiple perspectives and outcomes. Be ready to chart your way through them to learn about multiple legitimate outcomes: there are many ways of skinning the cat

• Accept everyone as colearners, not experts or competitors

• Encourage cooperation and consensus: the best way to get what you need is to help others get what they need

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Situational Awareness (See Text Box 2)

One of the critical differences between complexity-based and reduction-based thinking is the importance of context and scale in complex systems. Each issue or system attribute can appear quite different, and interactions have quite different outcomes, under different contexts and at different scales (Levin 1998, Dollar et al. 2007). Spatial and historical context are very important, but so too are the different participants’ value systems and how they lead to different outcomes. We use the acronym V-STEEP (Values—Social, Technical, Economic, Environmental, and Political) (Rogers and Luton 2011) to guide us when scoping context. An awareness of the complex context in which an adaptive challenge exists, and of how it changes in time and space, is critical to effectively navigating through it. In essence, one must cultivate a state of anticipatory awareness and constant mindfulness of the VSTEEP environment when navigating complex systems.

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Box 2: Habits of mind that promote patterns of situational awareness in behaviour

• Discern when a change is sufficient to require renegotiation or review

• Consider the importance of relationships and interactions between entities and not just the entities themselves

• Become conscious of and accept change agents and processes

• Be time and place specific: without it you cannot properly identify the appropriate context or define problems and solutions

• Be aware of contingencies, scale, and history: they all play a role in mapping the present and the future

• Surface the collective principles and values that will bound decision situations and help keep decision-making consistent from one context to the next

• Use these principles to guide decision-making, rather than relying on facts and numbers, which will change with context

• Reflect often: formally, informally, individually, and collectively

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A Healthy Respect for the Restraint/Action Paradox (See Text Box 3)

Leadership and decision-making in a complex system constitute a balance between the risks associated with practicing restraint and taking action. On the one hand, if the context requires it, one needs to consciously practice restraint and create space that allows the emergence of ideas, trust, opportunity, and even epiphany to loosen the tangled problem knot. There is a strong need for a certain slowness (Cilliers 2006) in taking time to allow emergence to unfold. On the other hand, one needs the courage to take action in a mist of uncertainty because, in a complex system, the consequences of our actions are never entirely predictable, and no matter how good our knowledge, there is never an objective “right” decision. Being conscious of, and comfortable with, this paradox is critical to successfully fostering and practicing adaptive leadership in social-ecological systems.

These three frames of mind are interdependent, with openness as the foundation or most critical one of the three as it can enable or constrain the other frames. To some extent, adequate situational awareness is not possible without openness to a diversity of perspectives. In a complex system, one simply cannot afford a one-sided perspective. Knowing when to act and when to practice restraint depends on one’s awareness of changing dynamics in the system, but it also requires openness to the unexpected. The more specific habits of mind are more easily contextualised, remembered, and taught when grouped under these frames, but they are not confined to use under one frame. As one becomes more competent in their use, they are easily moved or modified from one context to the next. This list of habits is a living list that is continually honed as we learn more from explicitly applying complexity thinking to social-ecological problem situations.

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Box 3: Habits of mind that promote patterns of a healthy respect for the restraint/action paradox Decisiveness/willingness to act under tension

• Encourage courage. Do not be afraid of intelligent mistakes

• Avoid paralysis from the paranoia of omission, and/or fear of simplicity

• Have the courage to seize the just-do-it moment

• Accept that there is no one right place to start or end. Do so when it is sensible and useful

• Have courage to take action from which you can learn. Even mistakes lead to learning

• Cultivate an awareness of the natural inclination to avoid discomfort and have the courage to push beyond it

Restraint under tension

• Discern when to trust the facilitation process and stand back quietly, giving the group dynamic space and allowing emergence

• Avoid premature convergence—avoid being too quick to make judgments and choices. Keep options on the table long past their apparent usefulness. Many will find context later in the process

• Avoid overconfidence about being ready to take action in a data-driven “predict and act” mode

• Know when to rest. Open and participatory engagement exposes vulnerabilities, requires humility, and takes energy

• Getting ahead of the game leaves participants unsettled and opens opportunities for dissent. Provide participants ample time for healing and replenishment

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Cilliers, F. P. 2006. On the importance of a certain slowness. Emergence: Complexity and Understanding 8:106–113.Costa 1991

Costa, L., and B. Kallick. editors. 2008. Learning and leading with habits of mind. Product # 108008, Association for supervision and curriculum development, Alexandria, Virginia, USA.

Dollar, E. S. J., C. S. James, K. H. Rogers, and M. C. Thoms. 2007. A framework for interdisciplinary understanding of rivers as ecosystems. Geomorphology 89:147–162. http://dx.doi.org/10.1016/j.geomorph.2006.07.022

Levin, S. A. 1998. Ecosystems and the biosphere as complex adaptive systems. Ecosystems 1:431–436. http://dx.doi.org/10.1007/s100219900037

Pfeffer, J., and R. I. Sutton. 2006. Evidenced-based management. Harvard Business Review 84:62–74.

Rogers, K. H., and R. Luton. 2011. Strategic adaptive management as a framework for implementing integrated water resources management in South Africa. Report No. KV 245/10. Water Research Commission, Pretoria, South Africa.

Addendum 3

Leadership Without Easy Answers - Ronald Heifetz [ 1 ]

Distinguishing Adaptive from Technical Work (pp. 73–88)

The practice of medicine illustrates the distinction between technical and adaptive problems, and the dynamics these problems generate. Patients come to physicians with symptoms and signs of illness. They hope that their doctor will be able to “fix” the problem, but they do not know if their hopes are well-founded. Often, the physician can indeed cure the illness. If a person has an infection, there are many times when the physician can say, “I have an antibiotic medication that will almost definitely cure you without any effort or life adjustment needed on your part. The medication is virtually harmless. I can give you one shot, or a week of pills, whichever you prefer”. For the purposes of our discussion, we can call these technical situations Type I-situations in which the patient’s expectations are realistic: the doctor can provide a solution and the problem can be defined, treated, and cured on the basis of (1) using the doctor’s expertise, and (2) shifting the patient’s burden primarily onto the doctor’s shoulders. The patient appropriately depends on the doctor’s know-how, and the doctor depends on the patient’s trust, satisfaction, and willingness to arrange payment.

These Type I situations are somewhat mechanical: one can actually go to somebody and “get it fixed”. Many medical and surgical problems are of this sort, and many of them are life-saving. From the doctor’s point of view, these provide gratifying moments when she can say, “Finally somebody has brought me a problem that I can solve!” Although the patient’s cooperation is crucial in these situations, the weight of problem-defining and problem-solving rests with the physician. The patient looks to her to provide a prescription that at once will offer direction (take this medicine), protection (the medicine will overcome the infection), and order (you should be able to resume normal activity within the week).

Of course, many situations that bring people to doctors are not so technical. We can separate these adaptive situations into Types II and III. In Type II situations, the problem is definable but no clear-cut solution is available. The doctor may have a solution in mind, but she cannot implement it. And a solution that cannot be implemented is not really a solution; it is simply an idea, a proposal. The patient must create the solution in Type II situations, though the doctor may play a central role. Heart disease sometimes presents a Type II problem. The patient can be restored to more or less full operating capacity, but only if he takes responsibility for his health by making appropriate life adjustments. In particular, he will have to consider the doctor’s prescriptions for long-term medication, exercise, diet program, and stress reduction. He will have to choose among these. Type II situations can be managed in a mechanical way only partially by the physician. She diagnoses and prescribes, but her recommendations will have side effects requiring the patient’s evaluation of the tradeoffs. What new balance should he reach between cutting down the intensity of his job, getting exercise, or eating better? The patient has to recognise his own problem enough to provoke adaptive change. The responsibility for meeting the problem has to be shared.

In these situations, the doctor’s technical expertise allows her to define the problem and suggest solutions that may work. But merely giving the patient a technical answer does not help the patient. Her prescribing must actively involve the patient if she is to be effective. The patient needs to confront the choices and changes that face him. The doctor’s technical answers mean nothing if the patient does not implement them. Only he can reset the priorities of his life. He has to learn new ways. And the doctor has to manage the learning process in order to help the patient help himself. The dependency on authority appropriate to technical situations becomes inappropriate in adaptive ones. The doctor’s authority still provides a resource to help the patient respond, but beyond her substantive knowledge, she needs a different kind of expertise—the ability to help the patient do the work that only he can do.

Type III situations are even more difficult. The problem definition is not clear-cut, and technical fixes are not available. The situation calls for leadership that induces learning when even the doctor does not have a solution in mind. Learning is required both to define problems and implement solutions. Chronic illness and impending death from any cause often fit this category. In these situations, the doctor can continue to operate in a mechanical mode by diagnosing and prescribing remedies (and a “remedy” of some sort can usually be found). Yet doing so avoids the problem-defining and problem-solving work of both doctor and patient.

In Type II and III situations, treating the illness is too narrow a way for the patient and the physician to define the task. It applies a technical formulation to a nontechnical problem. When critical aspects of the situation are probably unchangeable, the problem becomes more than the medical condition. For example, if the patient’s diagnosis is an advanced stage of cancer in which the likelihood of cure is remote, it may be useless-indeed, a denial of reality-to define the primary problem as cancer. Cancer, in this case, is a condition. To the limited extent it can be treated at all, it is only part of the problem. To define cancer as the primary problem leads everyone involved to concentrate on finding solutions to the cancer, thus diverting their attention from the real work at hand. The patient’s real work consists of facing and making adjustments to harsh realities that go beyond his health condition and that include several possible problems: making the most out of his life; considering what his children may need after he is gone; preparing his wife, parents, loved ones, and friends; and completing valued professional tasks. Table 1 summarises the characteristics of the three types of situations.

Table 1 Situational types

Unfortunately, neither doctors nor patients are inclined to differentiate between technical and adaptive work. Indeed, the harsher the reality, the harder we look to authority for a remedy that saves us from adjustment. By and large, we want answers, not questions. Even the toughest individual tends to avoid realities that require adaptive work, searching instead for an authority, a physician, to provide the way out. And doctors, wanting deeply to fulfill the yearning for remedy, too often respond willingly to the pressures we place on them to focus narrowly on technical answers.

…

Implications

Although Plato set the precedent, analysing leadership with a medical metaphor presents some difficulties. Doctor-patient relationships differ fundamentally from the relations of business executives, politicians, and public managers to their respective constituencies. Large social systems like organisations or polities present the manager with substantially more complex patterns than does the doctor-patient dyad. In a medical setting, a problem will lack clarity because the patient has not yet reasoned and separated the problem into Type I and II components. In a complex social system, a problem will lack clarity because a multitude of factions will have divergent opinions about both the nature of the problem and its possible solutions. One faction’s fix is another faction’s adaptive challenge. Competing values are often at stake. Furthermore, in a large social system the scientific experts often disagree even on the fundamental outlines of a problem, particularly at the early stages of problem definition.⁷ Each faction will have its own expert. For example, witness the public debate about so scientific a question as global warming. Does global warming present a problem needing attention? Which scientist should we trust?⁸

Moreover, in medical illness, the patient has the problem. But in organisational and public life, there will be many relevant parties to a problem, diffusing responsibility for it. The critical strategic question becomes: ‘Whose problem is it? And the answer is not so obvious. For example, who should take responsibility for drug abuse: police, parents, schools, clergy, taxpayers’ the army’ or some combination of these?

Still, medicine and politics present similar dilemmas. …First, an authority figure exercising leadership has to tell the difference between technical and adaptive situations because they require different responses. She must ask the key differentiating question: Does making progress on this problem require changes in people’s values, attitudes, or habits of behaviour? If people recognise the problem and can repeat a well-worked solution, then she can engage an authoritative response with practical efficiency and effect. …In situations that call for adaptive work, however, social systems must learn their way forward. Even when an authority has some clear ideas about what needs to be done, implementing change often requires adjustments in people’s lives.

Hence, with adaptive problems, authority must look beyond authoritative solutions. Authoritative action may usefully provoke debate, rethinking, and other processes of social learning, but then it becomes a tool in a strategy to mobilise adaptive work towards a solution, rather than a direct means to institute one. …

As suggested, this requires a shift in mindset. When using authoritative provocation as part of a strategy, one must be prepared for an eruption of distress in response to the provocation and to consider early on the next step. One has to take the heat in stride, seeing it as part of the process of engaging people in the issue. In contrast, the mindset which views authoritative action as a solution to an adaptive problem would logically view an aggravated community as an extraneous complication to making headway, rather than an inherent part of making progress. Operating with that mindset, an authority figure would likely respond defensively and inappropriately when the community retaliates.

Second, …having an authority relationship with people is both a resource for leadership and a constraint. Authority is a resource because it can provide the instruments and power to hold together and harness the distressing process of doing adaptive work. Authority is a constraint because it is contingent on meeting the expectations of constituents. Deviating from those expectations is perilous. …

Third, as learning takes place, Type III situations may be broken down partially if not completely into Type II and Type I components. This involves both process and technical expertise. When an authority distinguishes conditions from problems, she can bring tractable issues to people’s attention. By managing attention to issues instead of dictating authoritative solutions, she allows invention. People create and sort through alternative problem definitions, clarify value trade-offs, and test potential avenues of action. Creativity and courage can sometimes transform adaptive challenges into technical problems by expanding people’s technical capabilities.

Thus, we should also require that a manager acquire the ability to construct simple, practical solutions. In today’s world, where

Addendum 4

The Five Steps of Focusing - Eliyahu Goldratt [ 25 ] followed by a red fragment

The message of this book is not bottlenecks or cutting batches. It’s not even how to arrange the activities of the factory floor. As a matter of fact, the message is the same for any aspect of any company from product design and marketing to manufacturing and distribution. Everyone knows that the actions of marketing are guided by the concept of cost and margins, even more than the actions of production. And everyone knows that the best salesman in his/her company is the one who violates all the rules—which immediately implies that the rules in marketing are as wrong as those in manufacturing.

We grossly underestimate our intuition. Intuitively we do know the real problems, we even know the solutions. What is unfortunately not emphasised enough, is the vast importance of verbalising our own intuition. As long as we will not verbalise our intuition, as long as we do not learn to cast it clearly into words, not only will we be unable to convince others, we will not even be able to convince ourselves of what we already know to be right. If we don’t bother to verbalise our intuition, we ourselves will do the opposite of what we believe in. We will “just play a lot of games with numbers and words.” If we don’t bother to verbalise our intuition, we ourselves will do the opposite of what we believe in. We will “just play a lot of games with numbers and words.”

How do we listen to what we intuitively know to be right? How do we go about verbalising it?

The first step is to recognise that every system was built for a purpose. We didn’t create our organisations just for the sake of their existence. Thus, every action taken by any organ—any part of the organisation—should be judged by its impact on the over-all purpose. This immediately implies that, before we can deal with the improvement of any section of a system, we must first define the system’s global goal; and the measurements that will enable us to judge the impact of any subsystem and any local decision, on this global goal.

Once these are defined, we can describe the next steps in two different ways. One, in which we are using the terminology of the system that we are trying to improve. The other, using the terminology of the improvement process itself. We find that both descriptions are very helpful and only when both are considered together, does a non-distorted picture emerge.

How to sort out the important few from the trivial many? The key lies in the recognition of the important role of the system’s constraints. A system’s constraint is nothing more than what we all feel to be expressed by these words: anything that limits a system from achieving higher performance versus its goal. To turn this into a workable procedure, we just have to come to terms with the way in which our reality is constructed. In our reality any system has very few constraints (this is what is proven in The Goal, by the Boy-Scout analogy) and at the same time any system in reality must have at least one constraint. Now the first step is intuitively obvious:

1. Identify the System’s Constraints.

Once this is accomplished—remember that to identify the constraints also means to prioritise them according to their impact on the goal, otherwise many trivialities will sneak in—the next step becomes self-evident. We have just put our fingers on the few things which are in short supply, short to the extent that they limit the entire system. So let’s make sure that we don’t waste the little that we have. In other words, step number two is:

2. Decide How to Exploit the System’s Constraints.

Now that we decided how we are going to manage the constraints, how should we manage the vast majority of the system’s resources, which are not constraints? Intuitively it’s obvious. We should manage them so that everything that the constraints are going to consume will be supplied by the non-constraints. Is there any point in managing the non-constraints to supply more than that? This of course will not help, since the overall system’s performance is sealed—dictated by the constraints. Thus the third step is:

3. Subordinate Everything Else to the Above Decision.

But let’s not stop here. It’s obvious we still have room for much more improvement. Constraints are not acts of God; there is much that we can do about them. Whatever the constraints are, there must be a way to reduce their limiting impact and thus the next step to concentrate on is quite evident.

4. Elevate the System’s Constraints.

Can we stop here? Yes, your intuition is right. There will be another constraint, but let’s verbalise it a little bit better. If we elevate and continue to elevate a constraint, then there must come a time when we break it. This thing that we have elevated will no longer be limiting the system. Will the system’s performance now go to infinity? Certainly not. Another constraint will limit its performance and thus the fifth step must be:

5. If in the Previous Steps a Constraint Has Been Broken, Go Back to Step 1.

Unfortunately, we cannot state these five steps without adding a warning to the last one: “But Do Not Allow Inertia to Cause a System Constraint.”

We cannot overemphasise this warning. What usually happens is that within our organisation, we derive from the existence of the current constraints, many rules. Sometimes formally, many times just intuitively. When a constraint is broken, it appears that we don’t bother to go back and review those rules. As a result, our systems today are limited mainly by policy constraints.

We very rarely find a company with a real market constraint, but rather, with devastating marketing policy constraints. We very rarely find a true bottleneck on the shop floor, we usually find production policy constraints. We almost never find a vendor constraint, but we do find purchasing policy constraints. And in all cases the policies were very logical at the time they were instituted. Their original reasons have since long gone, but the old policies still remain with us.

The general process thus can be summarised (using the terminology of the system we seek to improve) as:

• 1. Identify the system’s constraints.

• 2. Decide how to exploit the system’s constraints.

• 3. Subordinate everything else to the above decision.

• 4. Elevate the system’s constraints.

• 5. If in the previous steps a constraint has been broken, go back to step one, but do not allow inertia to cause a system constraint.

As we said before, the only way not to cause severe distortions, is to describe the same process, but this time using the terminology of the improvement process itself. Every manager is overwhelmed with problems, or as some would call it opportunities. We all tend to concentrate on taking corrective actions that we know how to take, not necessarily concentrating on the problems we should correct and the actions needed to correct those problems. Thus, if a process of ongoing improvement is to be effective, we must first of all find—WHAT TO CHANGE.

In other words, the first ability that we must require from a manager is the ability to pinpoint the core problems, those problems that, once corrected, will have a major impact, rather than drifting from one small problem to another, fooling ourselves into thinking that we are doing our job. But once a core problem has been identified, we should be careful not to fall into the trap of immediately struggling with the question of How To Cause The Change. We must first clarify to ourselves—TO WHAT TO CHANGE TO—otherwise the identification of core problems will only lead to panic and chaos.

Thus, we should also require that a manager acquire the ability to construct simple, practical solutions. In today’s world, where almost everybody is fascinated by the notion of sophistication, this ability to generate simple solutions is relatively rare. Nevertheless, we must insist on it. It’s enough to remind ourselves of what we have so harshly learned from reality, over and over again. Complicated solutions don’t work, simple one’s might. Once the solution is known, and only then, are we facing the most difficult question of—HOW TO CAUSE THE CHANGE.

followed by a red fragment