For many companies, the biggest threat today is not complacency, but over-reaching. When too much change is happening at once, competing initiatives undermine one another and disconnected priorities put the core business at risk. As one executive recently told me, “Our biggest challenge is helping employees remember the names of all the change initiatives under way.”
Operations managers faced a similar challenge in the late 1970s. At that time, increasingly complex product lines offered consumers more choice, but added to companies’ risk of confusion, excess costs, and delays. What happened next is well known: In the 1980s, methods such as total quality management, the Toyota Production System, and lean manufacturing helped many companies reduce waste and increase quality. But perhaps less well known, these same methods (and related ones, such as just-in-time or kanban) also helped increase speed and throughput, by helping leaders manage interdependencies.
During the last few decades, some of these same ideas have been adapted to professional work and employed in methods such as agile software development and critical chain project management. Here, best practices for managing the flow of work, such as dedicating resources, increasing the visibility of customer expectations to everyone involved in doing the work, and handing off tasks like relay racers, have led to dramatically shorter timelines. It’s now time to consider how we might apply these approaches to change management.
Consider, for example, Eli Goldratt’s “theory of constraints.” Goldratt’s 1984 classic, The Goal, is still one of Amazon’s top sellers in organizational change. His theory is based on the idea that, in the face of interdependencies and variability, maximizing the activity of each part in a system reduces the output of the system. Drawing on the analogy of a scout troop on a hike, Goldratt showed that only one factor determined how fast they would get to their destination: the speed of the slowest scout, a poor soul named “Herbie.” To maximize their speed as a troop, they needed to let Herbie set the pace. They put Herbie at the front of the line, then did everything they could to lighten his load and help him do his best.
Companies that have applied the theory of constraints to their operations have seen impressive results. In fact, one meta-analysis published in 2003 in the International Journal of Operations & Production found that the median reduction in lead time is 75 percent, with revenue increases of 39 percent and due date performance improvements of 50 percent.
When applied to leading change, the theory of constraints reveals that a business can only operationalize real improvement at a certain pace. Yes, your business is more flexible than a factory. But chances are you are wrestling with interdependencies and bottlenecks. And wherever you have interdependencies, your slowest resource governs how fast you will get to your future state. Go faster than this, and you create confusion and waste, undermine your core business, or drift into “fake change” — incurring all of the costs of implementation, with few actual shifts in behavior. The key is to know your business’s limit, and to manage it like a hawk. Here are a few suggested steps, loosely adapted from Goldratt’s Five Focusing Steps:
Your slowest resource governs how fast you will get to your future state.
1. Identify the current constraints on your progress. Imagine you are a new CEO, looking at your company with fresh eyes. Ask yourself: What function or resource most constrains our progress? Where would the smallest improvement yield the biggest impact on our business? In other words, you need to identify your “Herbie-group.” Are you limited by how well field staff in sales, operations, or customer support translate new offerings, new markets, or improved processes into results? Or maybe your field organization is a well-oiled machine, but your problem lies upstream with one of the groups that generate innovations, such as product development, IT, or marketing. Your Herbie-group may even be top management or your best and brightest project leaders, if they are in high demand and stretched too thin.
2. Set a pace that supports your “constraint resource.” Rather than viewing your Herbie-group as a “weak link,” think of it as the player on your team that currently has the ball. How well are you blocking to ensure this player gets to the end zone? Agree on a few key priorities for the members of this group, and get everything else out of their way. Then, set a regular rhythm for change — what Jim Collins calls a “20-mile march.” Grouping changes into batches will lead to faster adoption with less disruption.
3. Sequence priorities over time. Too often, we sequence change haphazardly based on timelines set by the groups initiating change. Instead, try to introduce improvements in a logical order for the groups on the ground, at the fastest pace they can handle. For example, for a sales team, announcing new quotas and territories should come before introducing a new method for lead generation.
4. Elevate the pace. Next, look for ways to increase your Herbie-group’s capacity by investing in systems, processes, tools, and training. Can you simplify the work? Eliminate hassles? Add resources? At the same time, be sure the Herbie-group is clear about the goal and quality standards, has the right inputs, and receives timely and accurate feedback and measures so they can assess progress and course-correct quickly.
5. Pay attention as your constraints shift. Don’t expect to get rid of your constraints! Something always limits your progress; the key is to know where it is. Create a dashboard to help you stay on top of interdependencies and key initiatives across the enterprise. Listen and encourage teams on the ground to speak up if they start to lose confidence in their ability to deliver. If needed, adjust priorities clearly and cleanly.
Growing a business is a bit like taking off in an airplane. You want to maximize the angle of ascent, without going into a stall or a dive. Borrowing the operations world’s practice of managing constraint resources would position leaders to navigate the fine line between too much and too little change. By taking an integrated view, they are able to launch improvements at the maximum rate the business can absorb, managing a pipeline of change while maintaining their core business.