16 February 2010

A logical approach to making more money


IF [100] we sometimes make changes in our business expecting one result, but we get a different (e.g., unexpected or even negative) result…
THEN [110] we sometimes miss or misunderstand the cause-and-effect relationships in how our business is actually working; AND [120] we sometimes have doubts about what we think we know about how our enterprise actually works.
IF [120] we sometimes have doubts about what we think we know about how our enterprise actually works… AND [130] we (as a management team, or the company as a whole) could somehow put our intuitive knowledge about how our business works on paper…
THEN [140] we could read and reread our logic about how our organization really works (and fails to work) in reaching our goals.
IF [120] we sometimes have doubts about what we think we know about how our enterprise actually works; AND [140] we could read and reread our logic about how our organization really works (and fails to work) in reaching our goals…
THEN [150] we might discover flaws in our thinking and reasoning regarding how our organization really works (or fails to work) in reaching our goals.
IF [130] we (as a management team, or the company as a whole) could somehow put our intuitive knowledge about how our business works on paper…
THEN [160] others can also read and review our logic concerning what we believe is really happening in our business and how it all works.
IF [160] others can also read and review our logic concerning what we believe is really happening in our business and how it all works…
THEN [170] others may be able to help us find flaws in our thinking about how our business works (or fails to work) in reaching our goals.
IF [170] others may be able to help us find flaws in our thinking about how our business works (or fails to work) in reaching our goals;
OR IF [140] we could read and reread our logic about how our organization really works (and fails to work) in reaching our goals…
THEN [180] we may realize that we have some flaws in our thinking about what is really happening in our business enterprise.
IF [170] others may be able to help us find flaws in our thinking about how our business works (or fails to work) in reaching our goals;
THEN [190] others may also gain a better understanding of how our organization works (or fails to work) in reaching our goals.
IF  [190] others may also gain a better understanding of how our organization works (or fails to work) in reaching our goals; AND [200] discussions based in documented logic may help convince others (in a way presumption or other discussions may not)…
THEN [210] other stakeholders (e.g., employees, vendors, customers, board members) may be persuaded to help us in taking effective action to change our enterprise in ways that will help us achieve more of our goals.
IF [210] other stakeholders (e.g., employees, vendors, customers, board members) may be persuaded to help us in taking effective action to change our enterprise in ways that will help us achieve more of our goals; AND [220] other stakeholders want to help us in taking effective action to change our enterprise…
THEN [230] other stakeholders will help us in taking effective action to improve our business.
IF [150] we might discover flaws in our thinking and reasoning regarding how our organization really works (or fails to work) in reaching our goals; OR [180] we may realize that we have some flaws in our thinking about what is really happening in our business enterprise…
THEN [240] we will gain a better understanding of how our business really works (or fails to work) in reaching our goals.
IF [240] we will gain a better understanding of how our business really works (or fails to work) in reaching our goals; AND [250] we want to take actions that will really help our enterprise achieve more of its goals…
THEN [260] we will be guided (by what we have learned through this process) to take effective action to help our business reach more of its goals.
IF [260] we will be guided (by what we have learned through this process) to take effective action to help our business reach more of its goals; OR [230] other stakeholders will help us in taking effective action to improve our business…
THEN [270] our business will improve and we will achieve more of our goals.

What you have just experienced is “reading through” a logical “tree” as used in the Thinking Processes. In this case, the end result [270] is a business that is virtually assured of improving and reaching more of its goal (read: making more money, if it is a for-profit institution).
What was their first step: First, to realize that their own history of false-starts and attempts at improvement that produced little or no beneficial results proves to them that they do not really understand their own business enterprise. This is revealed in entities 100, 110, and 120 above.
This management team does not necessarily need a consultant; but what they do need is a framework (a theory) by which to understand how their organization really works – and, indeed, fails to work – in attempts to make more money tomorrow than it is making today.
“Experience teaches you nothing without theory.” – W. Edwards Deming
Second, this management team needed a method by which create a theory or framework as to how their organization really works and fails in its attempts to reach more of its goals. Most organizations have no such framework to guide them and have discovered no method by which to build and document such a framework. As a result, they tend to be guided by numbers (which frequently lie to them) and by “tribal knowledge” (which is all of the important intuitive knowledge contained in your organization that is valuable but entirely undocumented).
That’s it: It took this management team a realization that trial-and-error was no longer a satisfactory way to run a business enterprise – especially in a recession; and the discovery of a tool to help them document and reconsider what they already knew but did not know how to exploit for a breakthrough.
Read more about Goldratt’s Thinking Processes as developed in the context of the Theory of Constraints (ToC) by doing an online search for terms such as:
·         Thinking Processes
·         Theory of Constraints
·         Goldratt
·         Current Reality Tree
If you and your management team would like help in getting started with these tools that can bring rapid and dramatic improvement, contact me at rcushing@geewhiz2roi.com.
©2010 Richard D. Cushing

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