16 November 2009

The New ERP - Part 7

Creating a Current Reality Tree (CRT)

Beginning with an initial pair of related UDEs (as described in the preceding post), continue building your logic by working out and agreeing upon cause-and-effect connections between the other UDEs as you add them to the whiteboard.

In our example, someone from purchasing has identified an unwritten policy of always buying from the lowest-priced supplier as being one of the things that is keeping the organization from making more money. This is, most likely, an astute observation, especially since it is counter-intuitive. The same party also said that "not including quality criteria" in the organization's purchase agreements with vendors leads to more problems. We've added these as entities 30 and 40 in the figure below.

As you build your logical tree, the arguments regarding the logic should be restricted to the following categories of legitimate reservations:
  1. Clarity - Every statement (entity) should be clearly understood as to its meaning and intent.

  2. Entity Existence - Be sure that the entity (UDE) actually exists.

  3. Causality Existence - Does the proposed cause-and-effect (arrow) represent reality? It must be the actual cause and effect in a CRT. In other logical tree forms it may be a planned or desired effect.

  4. Cause Insufficiency - Ask the team, "Does Entity A actually lead to Entity B all by itself?" If not, then you may need to add clarifying entities (as we did in our example in the preceding post).

  5. Additional Cause - It may be true that Entity A causes Entity B, but there may be a additional cause that also leads to B. It is possible that both "If A, then B" and "If C, then B" both exist simultaneously.

  6. Predicted Effect Existence - This technique may validate or invalidate logic by demonstrating how the existing of one thing logically proves or disproves some other proposed reasoning. For example, if someone were to say, "Joe Smith is struggling financially," someone else might say, "If Joe Smith were struggling financially, one could predict that he would NOT be in the process of purchasing a new yacht for $1.5 million."

  7. Tautology - A tautology is a statement that must be true by definition, but does not necessarily indicate a cause-and-effect relationship. For example, if we say, "There are ambulances on the freeway, so there must be an accident," we are not necessarily implying that the ambulances caused the accident. In fact, the presence of ambulances on the freeway does not necessarily imply that there is an accident at all. They could be going about other business, such as transporting a patient not related to any car accident.
It is important to restrict your team to using these kinds of logical arguments relative to the logic in your tree. This prohibits (or, at least, exposes) the introduction of "company politics" into the logic so that you and your team can see "reality" and not some slanted view of what is working and not working in your organization.

Continue building your CRT until you have incorporated all of your UDEs. (On rare occasions we will exclude some UDEs in the construction of a CRT. Generally, the cause for such exclusions is that one or more of the UDEs is really outside the scope of the "system" being considered. For example, if the "system" being addressed is limited to the "sales process," we may omit UDEs related to post-sales actions.)

When topping off your CRT, be sure to get to your statements about not reaching your goal. For example, if your team's goal were (as we suggested) "to make more money both now and in the future," then some of evidences of not reaching your goal might be entities at the top of your tree like: "We do not generate enough Throughput" and "Our Operating Expenses are too high."

NOTE: If you'd like to receive a sample of a full CRT, please contact me at this email address: rcushing(at)ceoexpress(dot)com.

[To be continued]

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