in managing complexity requires accepting that complexity and uncertainty are natural to social systems and knowledge work. Effective systems must produce both better economic and sociological outcomes. Their development requires a holistic approach that incorporates the human condition. The Society is committed to exploring valuable ideas from all disciplines, and fostering a community that derives solutions from a common set of values and principles, while embracing specific context and avoiding dogma. Excellence in Managing Complexity http://leansystemssociety.org/ http://www.linkedin.com/groups/Lean-Systems-Society-1964378/about
Hyper-Productive Organization How to avoid the greatest obstacles that prevent businesses from fostering unity of purpose and nurturing a community of trust by Steve Tendon Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon
will have different hidden agendas because they are judged by different metrics and are driven by different incentives. Different incentives and Different metrics create internal tension and conflicts! IT IS IMPOSSIBLE TO HAVE UNITY OF PURPOSE AND TO BUILD A COMMUNITY OF TRUST UNDER THESE CONDITIONS. UNFORTUNATELY, THE VAST MAJORITY OF COMPANIES FOSTER THESE CONDITIONS. WHAT ABOUT YOURS?
A SYSTEMS VIEW to AVOID LOCAL OPTIMIZATION (I.E. PARTIAL INTERESTS!) USE METRICS AND INCENTIVES THAT ARE SHARED BY ALL DEPARTMENTS SO THAT YOU GET EVERYBODY TO PULL IN THE SAME DIRECTION!
A SYSTEMS VIEW to AVOID LOCAL OPTIMIZATION (I.E. PARTIAL INTERESTS!) USE METRICS AND INCENTIVES THAT ARE SHARED BY ALL DEPARTMENTS SO THAT YOU GET EVERYBODY TO PULL IN THE SAME DIRECTION! THINK IN TERMS OF FLOW! A SIMPLE BUT FUNDAMENTAL QUESTION: HOW MUCH CAN WE MAKE PER DAY?
$ 52 Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon Production or Delivery Process Resources: - Mr. Brown - Mr. Green Resource Costs: - 8 hours/day - $10 per hour Staffing
$ 52 Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon Production or Delivery Process Resources: - Mr. Brown - Mr. Green Resource Costs: - 8 hours/day - $10 per hour Staffing Job / Skill Assignment
$ 10 $ 10 10 m 10 m 6 m 8 m 5 m 5 m 20 m A: $ 50 B: $ 50 C: $ 55 D: $ 52 36 min 38 min 35 min 35 min Time per Unit Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon Production or Delivery Process Resources: - Mr. Brown - Mr. Green Resource Costs: - 8 hours/day - $10 per hour Staffing Job / Skill Assignment Materials Cost Work Time
$ 10 $ 10 10 m 10 m 6 m 8 m 5 m 5 m 20 m Time per Unit 20 min 16 min 20 min 18 min 30 min 5 min 30 min 5 min Resource Time per Unit 36 min 38 min 35 min 35 min A: $ 50 B: $ 50 C: $ 55 D: $ 52 Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon
$ 52 Constrained Resource Time per Unit 20 min 20 min 30 min 30 min Max Units per Day 24 units 24 units 16 units 16 units (8 hours) * (60 mins) / (20 mins) = 24 UNITS/DAY (8 hours) * (60 mins) / (20 mins) = 24 UNITS/DAY (8 hours) * (60 mins) / (30 mins) = 16 UNITS/DAY (8 hours) * (60 mins) / (30 mins) = 16 UNITS/DAY Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon
$ 52 NP/DAY 352 Accounting - Highest Gross Profit: ($52-$20) * (16 units) - (2 workers) * (8 hours) * ($10/hour) = $352 / DAY 20 25 25 20 160 160 160 160 TVC oE Net Profit / Day Max Units per Day 24 units 24 units 16 units 16 units Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon
$ 52 TIME (MIN) 36 38 35 35 MATERIAL ($) 20 25 25 20 LABOR COST ($) 6.00 6.33 5.83 5.83 GROSS PROFIT 24.00 18.67 24.17 26.17 UNITS/ DAY 24 24 16 16 TVC 20 25 25 20 oE 160 160 160 160 NP/DAY 560 440 320 352 Constraints Accounting Each wants his own... ACCOUNTING SALES PRODUCTION ACCOUNTING SALES PRODUCTION AND ALSO THE BUSINESS! Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon CONSTRAINTS ACCOUNTING REPORTS THE PERFORMANCE OF THE WHOLE SYSTEM AND AVOIDS LOCAL OPTIMIZATIONS ("INTERESTS," "HIDDEN AGENDAS," ETC.). USE THE SINGLE SYSTEM WIDE THROUGHPUT METRIC MEASURE AND REWARD ALL DEPARTMENTS SOLELY ON THROUGHPUT SO THAT THEY ALL PULL IN THE SAME DIRECTION!
$ 52 TIME (MIN) 36 38 35 35 MATERIAL ($) 20 25 25 20 LABOR COST ($) 6.00 6.33 5.83 5.83 GROSS PROFIT 24.00 18.67 24.17 26.17 UNITS/ DAY 24 24 16 16 TVC 20 25 25 20 oE 160 160 160 160 NP/DAY 560 440 320 352 Constraints Accounting Each wants his own... ACCOUNTING SALES PRODUCTION ACCOUNTING SALES PRODUCTION AND ALSO THE BUSINESS! Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon ALIGN SELF-INTERESTS WITH COMPANY DIRECTION CONSTRAINTS ACCOUNTING REPORTS THE PERFORMANCE OF THE WHOLE SYSTEM AND AVOIDS LOCAL OPTIMIZATIONS ("INTERESTS," "HIDDEN AGENDAS," ETC.). USE THE SINGLE SYSTEM WIDE THROUGHPUT METRIC MEASURE AND REWARD ALL DEPARTMENTS SOLELY ON THROUGHPUT SO THAT THEY ALL PULL IN THE SAME DIRECTION!
$ 52 TIME (MIN) 36 38 35 35 MATERIAL ($) 20 25 25 20 LABOR COST ($) 6.00 6.33 5.83 5.83 GROSS PROFIT 24.00 18.67 24.17 26.17 UNITS/ DAY 24 24 16 16 TVC 20 25 25 20 oE 160 160 160 160 NP/DAY 560 440 320 352 Constraints Accounting Each wants his own... ACCOUNTING SALES PRODUCTION ACCOUNTING SALES PRODUCTION AND ALSO THE BUSINESS! Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon CONSTRAINTS ACCOUNTING REPORTS THE PERFORMANCE OF THE WHOLE SYSTEM AND AVOIDS LOCAL OPTIMIZATIONS ("INTERESTS," "HIDDEN AGENDAS," ETC.). USE THE SINGLE SYSTEM WIDE THROUGHPUT METRIC MEASURE AND REWARD ALL DEPARTMENTS SOLELY ON THROUGHPUT SO THAT THEY ALL PULL IN THE SAME DIRECTION! NURTURE A STRONG UNITY OF PURPOSE BUILD A COMMUNITY OF TRUST ALIGN SELF-INTERESTS WITH COMPANY DIRECTION
$ 52 TIME (MIN) 36 38 35 35 MATERIAL ($) 20 25 25 20 LABOR COST ($) 6.00 6.33 5.83 5.83 GROSS PROFIT 24.00 18.67 24.17 26.17 UNITS/ DAY 24 24 16 16 TVC 20 25 25 20 oE 160 160 160 160 NP/DAY 560 440 320 352 Constraints Accounting Each wants his own... ACCOUNTING SALES PRODUCTION ACCOUNTING SALES PRODUCTION AND ALSO THE BUSINESS! Copyright (C) 2013, Steve Tendon - http://tendon.net @tendon CONSTRAINTS ACCOUNTING REPORTS THE PERFORMANCE OF THE WHOLE SYSTEM AND AVOIDS LOCAL OPTIMIZATIONS ("INTERESTS," "HIDDEN AGENDAS," ETC.). USE THE SINGLE SYSTEM WIDE THROUGHPUT METRIC MEASURE AND REWARD ALL DEPARTMENTS SOLELY ON THROUGHPUT SO THAT THEY ALL PULL IN THE SAME DIRECTION! NURTURE A STRONG UNITY OF PURPOSE BUILD A COMMUNITY OF TRUST ALIGN SELF-INTERESTS WITH COMPANY DIRECTION +60% . . . AND ALSO . . . MAKE MORE MONEY FOR YOUR BUSINESS
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!"
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!" 5. Repeat
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!" 5. Repeat THE FIVE FOCUSING STEPS
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!" 5. Repeat THE FIVE FOCUSING STEPS
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!" 5. Repeat
the Constraint "Herbie!" 2. Exploit the Constraint "C'mon Herbie! Speed up!" 3. Subordinate to the Constraint "Everybody stays behind Herbie!" 4. Elevate the Constraint "Everybody carries a piece of Herbie's gear!" 5. Repeat 5FS AS FOUNDATION OF UNITY OF PURPOSE & COMMUNITY OF TRUST
THE ORGANIZATIONAL HYPER-PRODUCTIVITY EXPERT http://tendon.net http://chronologist.com A MODERN-TIME METHODOLOGY ALCHEMIST https://leanpub.com/tame-the-flow TAME THE FLOW
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