Logical Thinking Process : A Systems Approach to Complex Problem Solving book/process from William Dettmer ISBN:0873897234 (2007), updating/refining Eli Goldratt's Theory of Constraints process (see ToC Thinking Processes).

Excerpts (partial)

Preface

Books are snapshots in time. The previous edition of this book, Goldratt’s Theory of Constraints (GTOC), was a snapshot of “the state of the art” of the Thinking Process in 1996. But time passes, and people and things evolve. The Thinking Process is no exception

while the Thinking Process has its roots in the Theory of Constraints, it has since realized a much broader applicability in system analysis and systems thinking

Introduction

Whereas Current Reality Trees (CRT) once took several days to complete, a better-quality tree is now possible in a matter of several hours. When used as part of an integrated Thinking Process, all of the trees are now more precisely and seamlessly aligned with one another.

This better integration is possible because of a new application of an old (and little used) tree: the Intermediate Objectives Map. An hour or less spent perfecting an IO Map at the beginning shaves days off completion of the rest of the process, and the results are much more robust. So, with this book, the IO Map takes its place as the first step in the Thinking Process.

Chapter 5 explains an easier, more logically sound way to integrate the Current Reality Tree with the Evaporating Cloud

dispense with the Transition Tree altogether and instead incorporate more detail into their Prerequisite Trees. Not only did implementations become faster and easier, but there was no deterioration in their quality. And everyone preferred this approach because of its speed. Because almost without exception the people I work with are competent professionals, it’s no problem for them to execute change from comprehensive Prerequisite Trees alone. The Transition Tree became superfluous

There’s another “elephant in the parlor” that attends any system improvement methodology, including (but not limited to) the Thinking Process: change management

I’ve tried to start that process in Chapter 8, “Changing the Status Quo.”

There are two components to this push. The first is the concept of the executive summary tree, a tool for reducing complete, complex Thinking Process analysis to a streamlined version

The second is a six-stage model for handling the psychology of change. Executive summary trees are described in detail in Appendix B. The behavioral change model is introduced in Chapter 8.

Part I The Destination

1 Introduction to the Theory of Constraints

SYSTEMS AND “PROFOUND KNOWLEDGE”

W. Edwards Deming maintained that real quality improvement isn’t possible without profound knowledge

According to Deming, profound knowledge comes from: • An understanding of the theory of knowledge • Knowledge of variation • An understanding of psychology • Appreciation for systems

THE SYSTEM’S GOAL

in human organizational systems, which are the primary focus of this book, the goal setter ought to be the system’s owner—or owners.

THE MANAGER’S ROLE

In a general sense, the Theory of Constraints (TOC) is about management

we’re all managers

No manager can hope to succeed without knowing four things: • What the ultimate goal is • What the critical success factors are in reaching that goal • Where he or she currently stands in relation to that goal • The magnitude and direction of the change needed to move from the status quo to where he or she wants to be (the goal)

Goal, Critical Success Factor, or Necessary Condition?

For the purposes of this book, a goal is defined as the result or achievement toward which effort is directed.19 But in complex systems we normally can’t jump directly to desired outcomes without satisfying some necessary conditions. A necessary condition is a circumstance indispensable to some result, or that upon which everything is contingent.18 Inherent in these definitions is a prerequisite relationship: you must satisfy the necessary conditions in order to attain the goal.

there are clearly some intermediate progress milestones along the way—some “show-stoppers” without which we won’t be able to reach the goal. Normally there aren’t too many of these. I submit that there are no more than three to five, and perhaps fewer than three.

We could call these critical success factors (CSF).

Most of what people might consider necessary conditions actually support (are required to satisfy) these critical success factors. As we’ll see in Chapter 3, “The Intermediate Objectives Map,” the goal, critical success factors, and subordinate necessary conditions can be configured as a hierarchy

THE CONCEPT OF SYSTEM CONSTRAINTS

What keeps your system from doing better? Would it be fair to say that something is constraining your system—keeping it from realizing its maximum potential?

Goldratt likens systems to chains, or to networks of chains

the chain will fail at its weakest link

Constraints and Non-constraints

Goldratt contended that there is usually only one constraint in a system at any given time...Everything else in the system, at that exact time, is a non-constraint.

Now let’s assume we’re smart enough to figure out which link is the weakest, and let’s say we double its strength. It’s not the weakest link anymore

RELATION OF CONSTRAINTS TO QUALITY IMPROVEMENT

Most organizations having formal improvement efforts include employees, in the process usually in teams. Let’s assume that these improvement teams are working on things that “everybody knows” need improving. If we accept Goldratt’s contentions about constraints and non- constraints, how many of these team efforts are likely to be working on non-constraints? Answer: probably all but one

interest, motivation, and eventually commitment to continuous improvement die from a lack of intrinsic reinforcement.

CHANGE AND THE THEORY OF CONSTRAINTS

Goldratt’s Theory of Constraints is essentially about change. Applying its principles and tools answers the four basic questions about change that every manager needs to know: • What’s the desired standard of performance? • What must be changed? (Where is the constraint?) • What is the appropriate change? (What should we do with the constraint?) • How is the change best accomplished? (How do we implement the change?) Remember that these are system-level questions, not process-level

one of the fundamental assumptions of systems theory: the whole is not equal to the sum of its parts

TOC PRINCIPLES

TOC is a prescriptive theory, but we’ll look at the descriptive part first

Systems as Chains

Local vs. System Optima

Cause and Effect

Undesirable Effects and Critical Root Causes

Treating an undesirable effect alone is like putting a bandage on an infected wound: It does nothing about the underlying infection, so its remedial benefit is only temporary

Figure 1.7 Partial list of TOC principles

Solution Deterioration

A process of ongoing improvement is essential for updating and maintaining the efficiency (and effectiveness) of a solution

Physical vs. Policy Constraints

Physical constraints are relatively easy to identify and break. Policy constraints are much more difficult, but they normally result in a much larger degree of system improvement than does the elimination of a physical constraint

Ideas Are Not Solutions

The best ideas in the world never realize their potential unless they’re implemented. And most great ideas fail in the implementation stage.

THE FIVE FOCUSING STEPS OF TOC

1. Identify the System Constraint

2. Decide How to Exploit the Constraint

wring every bit of capability out of the constraining component as it currently exists

3. Subordinate Everything Else

adjust the rest of the system to a “setting” that will enable the constraint to operate at maximum effectiveness. We may have to “de-tune” some parts of the system

4. Elevate the Constraint

If we’re doing Step 4, it means that Steps 2 and 3 weren’t sufficient to eliminate the constraint

This step can involve considerable investment in time, energy, money, or other resources, so we must be sure we aren’t able to break the constraint in the first three steps.

5. Go Back to Step 1, But Beware of “Inertia”

go back to Step 1 and begin the cycle again, looking for the next thing constraining our performance

The Five Focusing Steps have a direct relationship with the four management questions pertaining to change: What’s the standard, what to change, what to change to, and how to cause change? They tell us how to answer those questions

THROUGHPUT, INVENTORY, AND OPERATING EXPENSE

A burning question we must address is, “How do we know whether our constraint- breaking has had a positive effect on our overall system?”

Goldratt conceived a simple relationship for determining the effect that any local action has on progress toward the system’s goal. Every action is assessed by its effect on three system-level dimensions: Throughput, Inventory, and Operating Expense.11:58-62 Goldratt provides precise definitions of these terms (see Figure 1.8).

a detailed examination of this approach is beyond the scope of this book. Readers are strongly encouraged to educate themselves about this crucial topic. The two best of several sources for doing so are Management Dynamics by John A. Caspari and Pamela Caspari and Throughput Accounting by Steven M. Bragg

Throughput (T): rate at which the entire system generates money through sales... marginal contribution to profit (contribution margin)

Inventory/Investment (I): money tied up within the system

Operating Expense (OE)

Goldratt contended that these dimensions are interdependent. That is, a change in one will usually automatically result in a change in one or both of the other two

Which Is Most Important: T, I, or OE?

the theoretical limit in reducing OE and I is zero.

Theoretically, there’s no upper limit to how high you can increase T, but from a practical standpoint there is a limit to the size of your market. But still, it’s highly probable that the potential for increasing T will always be much higher than the potential for decreasing I and OE.

T, I, and OE: An Example

aerospace defense industry

T, I, and OE in Not-for-Profit Organizations

Goldratt himself has offered what may be the best solution to the problem of assessing the progress of not-for-profits toward their goals

Universal Measures of Value

Inventory, he proposed, should be differentiated as either “passive” or “active.”

Passive inventory, as the name implies, is acted upon

passive inventory isn’t measurable in monetary terms because the “raw materials” are often people. Figure 1.11 shows customers (patients) going through the non-monetary side of the system and becoming “Throughput”: well people.

Active inventory might actually be better defined as investment

Managing T Through Undesirable Effects

Without a universal non-monetary measure of value, Goldratt maintained that measuring T and passive I in not-for-profits isn’t ever likely to be practical. So, he says, don’t bother trying to do it. Instead, work on eliminating the undesirable effects (UDE) associated with

Throughput

THE TOC PARADIGM

Applications and Tools

Drum-Buffer-Rope

Critical Chain Project Management

Replenishment and Distribution

Throughput Accounting

Throughput accounting basically refutes the commonly used concept of allocating fixed costs to units of a product or service

The Logical Thinking Process

The Thinking Process comprises six distinct logic trees and the “rules of logic” that govern their construction. The trees include the Intermediate Objectives Map, the Current Reality Tree, the Evaporating Cloud, the Future Reality Tree, the Prerequisite Tree, and the Transition Tree. The rules are called the Categories of Legitimate Reservation. These trees, the Categories of Legitimate Reservation, and how to use them, are the subject of this book.

THE INTERMEDIATE OBJECTIVES MAP

The Intermediate Objectives (IO) Map is a “destination finder. ” Stephen Covey contends that one should always begin any endeavor with the end in mind

It begins with a clear, unequivocal goal statement and the few critical success factors that are required to realize it. It then provides a level or two of detailed necessary conditions for achieving those critical success factors.

Chapter 3 describes the IO Map in detail

THE CURRENT REALITY TREE

The Current Reality Tree (CRT) is a gap-analysis tool (see Figure 1.13). It helps us examine the cause-and-effect logic behind our current situation and determines why that situation is different from the state we’d prefer to be in, as expressed in the IO Map.

The CRT begins with the undesirable effects we see around us—direct comparisons between existing reality and the terminal outcomes expressed in the IO Map. It helps us work back to identify a few critical root causes that originate all the undesirable effects we’re experiencing

The CRT tells us what to change

Chapter 4 describes the Current Reality Tree in detail

THE EVAPORATING CLOUD: A CONFLICT RESOLUTION DIAGRAM

a conflict resolution diagram, to resolve hidden conflicts that usually perpetuate chronic problems

Chapter 5 describes the Evaporating Cloud in detail

THE FUTURE REALITY TREE

First, it allows us to verify that an action we’d like to take will, in fact, produce the ultimate results we desire. Second, it enables us to identify any unfavorable new consequences our contemplated action might have, and to nip them in the bud.

Chapter 6 describes the Future Reality Tree in detail

THE PREREQUISITE TREE

Once we’ve decided on a course of action, the Prerequisite Tree (PRT) helps implement that decision

THE TRANSITION TREE

The TT was designed to provide detailed step-by-step instructions for implementing a course of action. It provides both the steps to take (in sequence) and the rationale for each step. The TT could be considered a detailed road map to our objective.

Chapter 7 also describes the Transition Tree

NOTE: With this edition, a comprehensive examination of the Transition Tree and instructions for constructing it are omitted. A historical perspective for doing so is provided in Chapter 7. Instead of a Transition Tree, a three-phase project management approach to implementing policy changes is introduced.

THE CATEGORIES OF LEGITIMATE RESERVATION

The Categories of Legitimate Reservation (CLR) are the “logical glue” that holds the trees together. Essentially, they are eight rules, or tests, of logic that govern the construction and review of the trees. To be logically sound, a tree must be able to pass the first seven of these tests

THE LOGICAL TOOLS AS A COMPLETE “THINKING PROCESS”

Figure 1.18 shows the relationship of the logical tools to the four management questions about change.

Figure 1.19 The six logical tools as an integrated thinking process.

2 Categories of Legitimate Reservation

A lot of problem-analysis tools use graphical representations. Flowcharts, “fishbone” diagrams, and tree and affinity diagrams are typical examples. But none of these diagrams are, strictly speaking, logic tools, because they don’t incorporate any rigorous criteria for validating the connections between one element and another

PURPOSE

The Categories of Legitimate Reservation are the foundation upon which logic in general, and the Logical Thinking Process in particular, are built

ASSUMPTIONS

Tree builders/presenters often express cause-and-effect connections that are intuitive to themselves but not to others (that is, intermediate steps appear to be missing)

DESCRIPTION OF THE CATEGORIES OF LEGITIMATE RESERVATION

1. Clarity

Clarity is not, strictly speaking, a logic-based reservation. Its roots are in communication.

Seek to understand before seeking to be understood

A clarity reservation means that a listener doesn’t comprehend the speaker

Validity of logic is not addressed until mutual understanding is achieved

Up to this point, we’ve spoken of clarity as though we were referring to conversation among two or more people. Like the other categories, clarity is certainly useful in this respect. However, the primary focus of this chapter is on using the Categories of Legitimate Reservation in constructing, validating, and streamlining logic trees. As we proceed into more details on logic trees, what we’ve called “statements” by speakers (or writers, for that matter) will be referred to as entities in logic trees. “Entities,” as used this way, are defined in the next section. Figure 2.1 presents an abbreviated test and example of the clarity reservation.

a. Is any additional explanation required for the cause or effect, as written? b. Is the connection between cause and effect convincing “at face value”? c. Is this a “long arrow” (that is, are intermediate effects missing)? TES

2. Entity Existence

an entity is a complete idea expressed as a statement

the statement is not expressed in a grammatically correct sentence.

The statement is not structurally sound; that is, it expresses multiple ideas in a single entity, or it contains an embedded “if–then” statement within it.

Completeness

For example, the phrase “economic recession” can’t stand alone as an idea. It raises the inevitable question, “What about economic recession?” To be effective in a logic tree, the entity must make sense when read with “if” or “then” preceding it. “Economic recession occurs” would be an acceptable entity from the standpoint of completeness.

Structure

No compound entities

No embedded “if–then” statements

Validity

The validity test normally applies only to conditions of reality, not actions

3. Causality Existence

Does the cause really result in the effect?

Verbalizing the arrow often helps

must have

Is the cause intangible? To be “tangible,” a cause must be measurable or observable

“My boss is dissatisfied with me” is not really observable in and of itself (unless the boss happens to tell you so). But “I stop watering the lawn” is observable. In both cases, the effects are measurable or observable, but in the first case, the cause is not.

4. Cause Insufficiency

Because the world is a network of intricate, complex systems, cause insufficiency is the most common deficiency found in logic trees or human dialogue. In complex interactions, relatively few effects are likely to have a single, unequivocal cause

In this section, we see how several dependent factors combine to produce cause sufficiency, and how to know when there is a cause insufficiency.

The cause insufficiency reservation is raised when a listener believes that a presenter’s stated cause is not enough, by itself, to produce the stated effect

The Ellipse

How are multiple dependent causes expressed in a logic tree? In portraying such a relationship, contributing entities are linked to their resulting effect with arrows passing through an ellipse

enclose the major contributing causes that are sufficient in concert but not alone to produce the effect

Relative Magnitude of Dependent Causes

The idea of relative magnitude in a true dependency has no real meaning. Both (or all) causes are needed to produce the effect, and removing any one eliminates the effect

Theoretically, there is no limit to how many arrows can pass through an ellipse. But there is a practical limit. At some point it becomes extremely difficult to depict and keep track of an expanding number of component causes

As a rule of thumb, however, try to limit the number of contributing causes to three if possible, or four at most

One of the most common points of contention concerning cause insufficiency is the exclusion of some cause factor that is so basic to the situation that it is “transparent” to the presenter—but maybe not to the listener or scrutinizer.

But a presenter might respond, “True, but since oxygen is always present in the situation where my fire might occur, I consider it a constant that doesn’t have to be shown.” So the concept of “oxygen” connotes a factor that is accepted as present-but- transparent by anyone with intuitive knowledge of the system under examination.

5. Additional Cause

The key words are “either” and “or.”

Magnitude

In order for the additional cause reservation to be valid, the suggested additional cause must produce the stated effect in at least as much magnitude as the presenter’s originally stated cause

A magnitudinal causality implies addition. In the preceding example about decreasing sales, more than one independent cause produced an effect that increased in magnitude as each was added to the causality.

Because a magnitudinal cause is a unique variation of a basic additional cause, it requires a distinctive depiction. For this, we’ll use a “bowtie” symbol with the letters “MAG” inside it

A Unique Variation of Additional Cause

COMPLEX CAUSALITY

complex causality is a situation in which a given effect might have more than one cause

realize that complex causality is more likely to be the rule than the exception

SIDEBAR

Figure 2.20 Magnitudinal “AND.”

Figure 2.21 Exclusive “OR

6. Cause-Effect Reversal

7. Predicted Effect Existence

Conflict or Differences in Magnitude?

Most causes in the “real world” result in more than one effect

Tangible or Intangible?

A scrutinizer taking issue with the existence of an intangible cause would use predicted effect existence to show that another expected effect of the same cause is absent

If either of these predicted effects doesn’t exist, then the originally stated cause is invalid, and the scrutinizer’s reservation is valid

What if the cause is tangible? Predicted effect existence can also be used to support or refute the logical connection, or arrow, between cause and effect. For example, “Quality has deteriorated” may be a quantitatively verifiable fact (see Figure 2.27). “Sales are going down” may also be substantiated by numbers. But has deteriorated quality necessarily caused decreased sales? One additional predicted effect of poor quality might be “Customers’ complaints increase.” Does this quantitatively verifiable effect exist? If so, the causality relationship between poor quality and decreased sales is likely to be valid. If not, decreased sales may have another cause

To avoid confusion, verbalize a predicted effect existence reservation this way: “If we accept that [CAUSE] is the reason for [ORIGINAL EFFECT], then it must also lead to [PREDICTED EFFECT(S)], which [do/do not] exist.”

8. Tautology (Circular Logic)

Tautology is most likely to surface when causality existence is questioned and the cause is intangible

USING THE CLR IN A GROUP

review of first or second drafts.

one of two situations applies

CLR Known by All

A scrutinizer can merely say, “I have a causality existence reservation about the connection between entities 104 and 105.”

On the other hand, if you want to see the scrutiny process grind to a near-halt, invite four or more scrutinizers conversant in the CLR to participate

people knowledgeable in the CLR tend to “nit-pick” every little deficiency they find.

CLR Known Only by the Tree Builder

This need not be a problem. In fact, it could be a definite advantage

can be extremely helpful, for two reasons. First, they’ll be inclined to explain their concerns about the logic in the same terms as the eventual intended audience. Second, they’ll be better focused on the content of the subject matter and their intuition about what causes what.

puts a larger burden on the tree builder.

SUFFICIENCY-BASED VS. NECESSITY-BASED LOGIC TREES

The Current Reality Tree, Future Reality Tree, and Transition Tree are considered sufficiency trees. They’re read in an “if–then” form.

The Intermediate Objectives Map, the Evaporating Cloud, and the Prerequisite Tree are considered necessity trees. They’re read in an “In order to . . . we must . . . because . . .” format. The validity of their cause-effect relationships depends on meeting minimum necessary requirements

SYMBOLS AND LOGIC TREE CONVENTIONS

Logic trees are not flowcharts

Figure 2.32a Thinking Process as an engineering flowchart

Figure 2.32b Thinking Process as a logic tree

A Standard Convention for Logical Connections

Figure 2.36 Categories of legitimate reservation: self-scrutiny checklist.

3 Intermediate Objectives Map

(Note: Dettmer later switched to calling this the Goal Tree.)

INTRODUCTION

The most insidious contributor to the failure of continuous improvement effort is what might be called the “Nero syndrome”—fiddling while Rome burns, or rearranging deck chairs on the Titanic. In other words, focusing on the inconsequential instead of the critical. In Theory of Constraints terms, this is known as working on a non-constraint.

DEFINITION

An Intermediate Objectives (IO) Map is a graphical representation of a system’s goal, critical success factors (CSFs), and the necessary conditions (NC) for achieving them.

things you must do if the goal is to be achieved

SYSTEM BOUNDARIES, SPAN OF CONTROL, AND SPHERE OF INFLUENCE

We must be able to define precisely what system (and level) we’re addressing. In other words, we need to be able to define a boundary for the system we’re trying to improve, or we risk “wandering in the wilderness for forty years.”

Span of Control

Sphere of Influence

The External Environment

Control vs. Influence

In the systems in which we operate, we can influence far more than we can control, and we can influence far more that most of us realize that we can

DOING THE RIGHT THINGS vs. DOING THINGS RIGHT

Who Sets the Goal?

the system's owner

DESCRIPTION OF THE INTERMEDIATE OBJECTIVES (IO) MAP

Figure 3.6 Production process IO Map.

2. Determine the System Goal

the underlying purpose of the IO Map is to identify a destination that we’re trying to reach—a benchmark against which we can assess what’s actually happening within the system. This means that the goal statement should reflect outcomes

The logic trees that use sufficiency statements are Current Reality, Future Reality, and Transition. The IO Map, the Evaporating Cloud, and the Prerequisite Tree are necessary condition trees—they indicate minimum essential requirements, not all elements sufficient to produce the result. These trees may be expressed as short phrases rather than as complete sentences.

3. Determine the Critical Success Factors

without which the goal can’t be achieved. Normally, there aren’t more than three to five of these, and there may be fewer

critical success factors, by definition, are high-level “show- stoppers.” If they don’t happen, we don’t reach our goal

4. Determine Key Necessary Conditions

the CSFs are functional subsets of the goal they’re supporting, but they’re not “actionable” in and of themselves. In other words, the discrete activities needed to make the CSFs happen lie below the level of the CSFs themselves. These activities are necessary conditions for the satisfaction of the CSFs. We might call them “building blocks.”

It’s not likely that any CSFs will need more than three to five NCs. Because these NCs themselves are hierarchical, there could be more than one layer of them below the CSFs, but as an arbitrary rule of thumb, we’ll try to limit the NC to no more than two layers, if possible

5. Arrange the IO Map Components

6. Connect the Goal, Critical Success Factors, and Necessary Conditions

The details will emerge in Future Reality Trees and Prerequisite Trees.

Almost all your connections will be oriented vertically—that is, from a lower layer to the one above it. But some connections may be lateral as well. In other words, look carefully to identify any NC that is required for more than one CSFs, and add connections as required.

7. Verify the Connections

Even though this is a necessity-logic tree, you can check for some of the same logical elements that you find in the CLR.

Figure 3.13 Strategic-level IO Maps (examples).

Consider the CSFs, for example. Are they really indispensable to realizing the goal?

Is the proposed CSF the last thing that must happen (that is, a terminal outcome) before you can safely say the goal will be achieved? Or does it actually produce some intermediate outcome, which would likely be the real CSF?

The “10,000-Foot Test”

Do the NCs that support a particular CSF all seem to be part of an integrated pattern, and does that pattern reflect your intuition about how life is, or must be?

8. Enlist Outside Scrutiny of the Entire IO Map

Figure 3.14 provides an illustrated, abbreviated checklist for constructing an IO Map.

SUMMARY AND CONCLUSION

Take a look at Figure 3.15 on the next page. This is the kind of outcome you should be striving for: not too detailed, not too high-level, two or three layers of necessary conditions at most. Clearly the critical success factors are high-level terminal outcomes without which the company goal can’t be reached. This example is for a commercial manufacturing company.

Part II: Gap Analysis and Correction

4 Current Reality Tree

"It’s not that simple." How many times have we heard someone say that, usually after a simple solution to a complex problem has been suggested? Does this mean that complex problems can only be solved using complex solutions? No, but it does imply that the complexities of the situation were not fully visible or taken into consideration before a solution was proposed.

What happens if the problem we’ve identified—excessive costs—is the wrong one?

One option is to construct a Current Reality Tree—a logic tree Goldratt designed specifically to find hidden system-level problems in complex situations. In this chapter, we’ll see what a Current Reality Tree is, what it tells us, and why we can be confident that it has pointed us at the right problem, even though that problem may be hidden beneath many layers of cause and effect.

DEFINITION

The CRT seeks cause-and-effect connections between visible indications of a system’s condition and the originating causes that produce them

a Current Reality Tree is not a complete picture of reality. It reflects only the part perceived to be unfavorable

it could be considered a kind of system-level failure mode effects analysis (FMEA).

PURPOSE

Articulate undesirable effects (UDEs) exhibited by a system

Relate UDEs through a logical chain of cause and effect to root causes

Determine which of the root causes lie beyond one’s span of control or sphere of influence

Isolate those few causal factors—system constraints—that must be addressed in order to realize the maximum improvement of the system

ASSUMPTIONS

All effects within a system (desirable or undesirable) are the products of root causes that may be several steps removed from these effects

Cause and effect is governed by the Categories of Legitimate Reservation (CLR) and is verifiable through the CLR.

DESCRIPTION OF THE CURRENT REALITY TREE

Because most situations are complex, often with inconspicuous causes driving the results, it can be difficult to decide what to change in order to make the situation right. Combined with effective application of the Categories of Legitimate Reservation, a CRT can help reveal complex relationships.

Span of Control and Sphere of Influence

If the most significant root causes lie outside our span of control, we must depend on others for help. This means persuading others to do things they might not be obligated to do. If the root causes lie outside our sphere of influence, we may not be able to do anything about them at all.

Follow the cause-and-effect chain wherever it may lead. But after the tree is done, and before you select which root causes to attack, revisit the issue of sphere of influence

Correlation vs. Cause and Effect

An unidentified embedded correlation will eventually collapse the grandest CRT

The difference between correlation and cause and effect is essentially the difference between how and why. You have a correlation when you can observe patterns and trends and conclude how one phenomenon behaves in relation to another. But the key element that correlation lacks is the answer to the question “Why?” Without knowing why, you’ll never know what makes the correlation exist. This means you’ll never be sure whether the correlation depends on other variables you haven’t identified. In a problem analysis situation, this could cause you to focus on the wrong problem.

Fibromyalgia and Myofascial Pain: A Complex Real-World Example

a majority of physicians lump them together. But FMS and CMP can occur completely independently, too. The symptoms are difficult to sort out and the treatments are quite different.

how do we ensure that we don’t fall victim to correlation in our Current Reality Trees? The answer is the Categories of Legitimate Reservation (CLR).

Undesirable Effects

UDE is something that really exists; something that is negative compared with the system’s goal, critical success factors, or necessary conditions (see Figure 4.6). You might be aware of several UDEs

Undesirable by What Standard?

The IO Map we discussed earlier in Chapter 3, if properly validated by consensus of decision makers, represents an objective benchmark against which to determine undesirability

To determine whether you’ve really got an UDE or just a “fact of life,” phrase the effect in a complete sentence.

Does it adversely affect the Throughput in your system

as a last check, give it the “So what?” test. Read the statement as if someone else were saying it to you, and respond, “So what?” Your first reaction will probably be to come up with a “Because…”. If you have a valid “because…”, that may actually be your UDE. If the statement doesn’t cry out for justification, it can probably stand alone as an undesirable effect.

Existence in Reality

Does it really exist, or is it someone’s negative fantasy?

Why is effective UDE identification so important to building an effective Current Reality Tree? We focus on UDEs for the same reason the media focuses on negative stories—they’re higher in visibility—and we want to get rid of them

speeds our analysis of what’s wrong with our system and generally leads to faster improvement

UDEs are only the most visible results of much more complex interactions and processes, but like a gopher hole in a perfectly manicured lawn, they’re the “gateway” to finding the real underlying problem. If you choose the wrong gateway, you won’t find the right problem. So some degree of care is warranted in selecting your UDEs.

Root Causes

In building a Current Reality Tree, we work our way from UDEs back through the chain of cause and effect to root causes. The root cause is the beginning of the cause-effect relationship.

the root cause can be: • The lowest cause in the chain before passing outside your sphere of influence—the most basic thing you can do something about • The first cause beyond your sphere of influence—something you personally can’t do anything about

One you may have to live with, the other you don’t. And being able to identify which is which provides your problem-solving flexibility

Every Current Reality Tree will have several root causes—maybe even a lot of them.

One root cause in any Current Reality Tree is likely to be the origin of a substantial number of UDEs. The primary objective of the CRT is to work backward from UDEs through a chain of cause and effect to identify the few root causes that account for as many of the system’s UDEs as possible. Your purpose in building a Current Reality Tree is to try to find the very few root causes that, if corrected, will have the greatest positive impact on system improvement—the most “bang for your buck.”

Every cause statement that has arrows coming out of it but no arrows going in is technically considered a root cause

Core Problems and Root Causes

From its inception in the early 1990s, the Thinking Process was intended to find what Goldratt referred to as a core problem—the one policy or practice that accounted for most of the undesirable effects experienced by a system. Goldratt even went so far as to offer a criterion: a true core problem would account for 70 percent of the UDEs in a system.

However, there are two fundamental weaknesses with the idea of a core problem, as Goldratt originally defined it.

The “70 Percent” Criterion

Without any kind of objective benchmark, Thinking Process users are left to decide on their own what’s negative enough to be called an UDE and what isn’t. Naturally, since values differ from one person to another, so too did determination of UDEs

For example, in a single Current Reality Tree I’ve seen one UDE that reads “The company loses money” and another that reads “I’m overloaded with work.” Think about this question: Are these two UDEs equally “bad”?

Moreover, if different people see UDEs differing in value, then all UDEs are not created equal. If they’re not all equal, what happens if the most important UDEs are in the excluded 30 percent?

Inability to Act on a Core Problem

Goldratt’s original procedure for building a CRT actually called for a concerted effort to connect disparate branches of a CRT to a single core problem by searching out V-shaped connections (see Figure 4.10). This kind of effort leads to the second weakness in the idea of a core problem, which is purely practical. The wider the variety of UDEs, the broader the statement of a core problem is required to connect them

A Solution to the Core Problem Conundrum

The solution is two-fold

First, we must have clear consensus on what is or isn’t an UDE. The Intermediate Objectives (IO) Map (Chapter 2) provides the means to achieve this consensus

Second, in constructing a CRT, we’ll cease to strive for a single unifying (but vague and over-broad) core problem. Instead, we’ll dig down to a few critical root causes that are both actionable and within the sphere of influence of an accessible decision maker. (We’ll define “critical root cause” in a moment.)

Critical Root Cause: A Definition

A critical root cause is a policy, practice, or prevalent behavior that constitutes the lowest level of causality in existing reality lying within someone’s sphere of influence to change

Lying between the UDEs at the top of the CRT and the critical root causes at the bottom is the main body of the tree—all the detailed intermediate causes and effects that connect the two

The details of all this cause and effect will be different for each system we might analyze.

Archetypical CRTs

we must also be aware that within types of systems cause-and-effect structure is likely to be similar

To the extent that the internal challenges they experience are similar, they might have equivalent UDEs

The same is true of the solutions to the critical root causes identified in the CRT (that is, the FRT).

This carries simultaneously potential benefits and risks

The primary risk is that for companies or groups that compete with one another, access to one’s CRT (or worse, the FRT) can provide a tactical, perhaps even a strategic advantage

Depicting a Current Reality Tree

As you will notice from reading other chapters of this book, all of the Thinking Process logic trees contain statements bordered by some kind of geometric figure. In the Current Reality Tree you should see only round-cornered rectangles.

statements in Current Reality, Future Reality, and Transition Trees must be expressed in complete sentences that convey an idea that can stand alone.

With a Current Reality Tree, the issue is simple: An entity is either a cause or an effect

Arrows appear in every Logical Thinking Process tool, but they signify different relationships. In the Current Reality, Future Reality, and Transition Trees, they signify sufficiency in a cause-and-effect relationship. Remember, sufficiency implies that the presence of all the contributing causes will deliver the stated effect.

Every arrow in any Logical Thinking Process tree is based on unstated but underlying assumptions about the situation, environment, or laws of nature

when the underlying assumptions change, the same cause can result in a different effect

Ellipses, Magnitudinal ANDs, and Exclusive ORs

Ellipses. The ellipse is unique to sufficiency-based logic trees (Current Reality, Future Reality, and Transition Trees). Its function is to encompass multiple causes that depend upon one another to produce the effect in question

NOTE: It isn’t necessary to include every underlying assumption or potential contributing cause in your Current Reality Tree

Magnitudinal AND.

conditions in which two or more causes can produce an effect independently of one another (that is, no ellipse required to enclose them).

The preferred symbol for a magnitudinal-AND situation is a “bowtie” with the letters “MAG” inside it.

Exclusive ORs.

Numbering Entities in a Tree

Numbers should increase in the direction of the arrows

Don’t number your entities until you’re sure the tree is as logically sound as you can make it (that is, you think all the entities you’ll need are present).

Later, if you decide you need to add entities, don’t re-number the entire tree. Instead, use decimal numbers for the new additions (for example, 217.1, 224.5, 234.7, and so forth).

THE MOST COMMON LOGICAL ERRORS IN A SUFFICIENCY TREE

there are eight Categories of Legitimate Reservation. Only seven of these categories can actually be depicted in a Thinking Process logic tree. Of those seven, there are three that you’re likely to find most often in either a CRT or an FRT, whether your own or someone else’s.

Clarity in the Arrow

missing intermediate steps

We refer to this as a “long arrow,” meaning that it’s a long leap of logic between the cause and the effect

There are two major risks associated with long arrows

The most obvious is in commu - nicating your logic to a decision maker

risk the credibility of your argument

The second risk with long arrows is overlooking possible options to solve the problem

Try to make your logic as lock-step as possible—no “missing links.” If the tree must be streamlined for executive presentation, that can be done later (see Chapter 8 for details). Just remember: It’s always easier to leave out logic that you’ve developed and retrieve it later

Cause Insufficiency

A typical b eginner mistake is failure to acknowledge, and include in a CRT or FRT, all the contributing causes to an effect. The most common indicator of this mistake is a tree that has a lot of single arrows connecting different levels of causality and few, if any, contributing causes with ellipses

there should be very few single arrows in either a CRT or an FRT.

25 percent

The Concept of “Oxygen” Revisited

In Chapter 2, “Categories of Legitimate Reservation,” we explored the concept of “oxygen” in logic trees.

The concept of “oxygen” in logic trees is often used as a rationale for leaving out entities—contributing causes—in a CRT or FRT. The argument usually goes something like this: “Well, of course it’s a factor, but everybody knows it’s there, so there’s no need to include it

the “oxygen” argument is often used as an excuse by people defending their failure to even consider contributing causes in the first place

When you construct the actual analysis, include as much detail (that is, step-by-step logic and sufficiency) as may be required to persuade a viewer of the tree who knows little or nothing about the situation. When you present the results of the analysis, you can use judgment about how much to streamline the tree. Your judgment should be based on knowing your audience, meaning that you have a good understanding of the listener’s personal knowledge of the situation.

Appendix B provides a way to safeguard your own credibility without “losing your audience.”

Entity Existence

Too frequently, I’ve seen speculation passed off as fact in cause- and-effect trees

ensure that we can provide evidence to substantiate every cause or effect we include in our trees. This can be a tall order, and in some cases you might not need to do it

READING A CURRENT REALITY TREE

As with any sufficiency tre e, the Current Reality Tree is read from the bottom up

Locate the entity at the tail of the arrow and read it aloud, preceded by the word “If.” After that, read the entity at the head of the arrow, preceded by the word “then

NEGATIVE REINFORCING LOOPS

Sometimes it’s obvious that an undesirable effect

actually reinforces the cause that produced it. This is known as a negative reinforcing loop. It represents both bad and good news.

It’s bad news because you have a self-perpetuating bad situation

However, the fact that you can identify a negative reinforcing loop is good news, because once you know it’s there you can take steps to break it. In fact, you must take steps to break this chain of causality

Reading a Negative Reinforcing Loop

If you’re verbally presenting a tree with a reinforcing loop (either positive or negative), read the chain of causality the first time through the loop departure entity without verbalizing “more” (or “more and more”). At the departure entity, mention the negative reinforcing loop first: “At this point, we experience a particularly serious phenomenon…a negative reinforcing loop.”

Can you find the policy that should have been changed to avoid the ultimate undesirable effect?

Negative Reinforcing Loop

Figure 4.27 Negative reinforcing loop: the International Harvester (IH) example.

HOW TO CONSTRUCT A CURRENT REALITY TREE

1. Define the System to be Modeled

what lies within your system and what factors reside outside it

boundaries

2. Determine the Undesirable Effects

reference to verified system benchmarks of performance: the goal, critical success factors, and key necessary conditions of the system you defined in Step 1.

if you don’t already have a validated IO Map in hand for your target system, stop now and complete one.

Compare Reality with Benchmarks of System Success

you’re never likely to see more than about five to seven UDEs form the top of your CRT

Create a three-cell column for each UDE.

articulate the UDE—the deviation between reality and the benchmark from the IO Map—in a complete sentence. Write the UDEs in the top cell of each column and number them

3. Determine the First Two Levels of Causality

one matrix column at a time, articulate the immediately preceding cause of the UDE. Don’t “dive down” too deeply

Go to the second layer of causality and do the same thing

Transfer UDEs and Causes to Post-it Notes

4. Begin the Current Reality Tree

5. Improve the Logic of the Initial Clusters

e the Categories of Legitimate Reservation (CLR) to verify and improve each vertical connection

See if you can identify two clusters that seem to be closely related to one another

As with the shape of a real tree, various branches will converge into a root system at some point (see Figure 4.34). As with real trees, these convergence points are likely to be several more layers of causality downward toward the root.

6. Identify Possible Additional Causes

“Beside this particular cause, what else could independently produce this same effect?”

Two Criteria for Additional Causes

It must be realistic and it must be probable

Take note of a couple of characteristics of the additional cause situation shown in Figure 4.35. Notice first that there are two key assumptions indicated near the causes

These are clearly “oxygen” to the causality

Second, notice that there is no magnitudinal relationship here (that is, no “MAG” bowtie symbol used). The effect is not magnitudinal in nature. Life or death of the plant is a “zero- or-one” condition

7. Look for Lateral Connections

A lateral connection is a cause in one cluster that leads to an effect in another cluster.

8. Build the Cause-and-Effect Chains Downward

To construct each successive level, answer the following questions for each cluster: • Why does your lowermost entity exist? The “because …” that answers this question will be the next lower cause in each branch. • What is the direct and unavoidable cause of your lowermost entity?

As you add each successive lower layer of cause, compare that new cause with the lower levels in adjacent clusters. In other words, as you build each layer downward, look for opportunities to cross-connect

An effect in one cluster causes an effect in another related cluster.

Figure 4.37 Step 7: Look for lateral connections.

Repeat this process until you’ve achieved two objectives: • You reach the lowest level of causation that you or someone within your sphere of influence has the authority to change, and • All clusters are cross-connected into a single, logically sound tree

Your finished tree should look like Figure 4.38.

9. Scrutinize the Entire Current Reality Tree

It’s at this point that you get to actually test the last of the preceding bulleted questions. When you think that your CRT is as good as you can possibly make it, it’s time to show it to others and solicit their scrutiny of its details

10. Decide Which Root Causes to Attack

some of those root causes will lie within your span of control—you have unilateral change authority over them. More likely, however, the critical root causes will be within authority of someone else to change, often a senior decision maker.

Once you have a finished CRT (see Figure 4.39), you’ll need to decide if you can change a particular critical root cause directly or whether you’ll need the help of someone with more “horsepower.”

Any entities that lie outside your sphere of influence are ones that you will likely have to live with because you can’t cause them to be changed. This is why it is so crucial to reflect sufficiency (that is, all contributing causes, even if they’re static conditions) in your CRT, especially at the root cause level. The mere presence of two or more causal arrows passing through an ellipse provides you with multiple options for modifying actual causation. One of those causes is likely to lie within your sphere of influence

Your success or failure in accomplishing what you want in life is, in the final analysis, a game. And the name of the game is “How far am I willing to push the limits of my sphere of influence?”

SCRUTINIZING THE CURRENT REALITY TREE

Scrutinizing is the process of critically examining a logic tree and strengthening it as much as possible

Clearly, if you plan to present the tree to someone else for the purpose of persuading him or her to do something, it’s absolutely critical to have an independent set of eyes review it for you

outside scrutinizers need not be well versed in the Categories of Legitimate Reservation (CLR), though it certainly helps if they are

You can expect the majority of reservations expressed by external scrutinizers to fall into the categories discussed earlier in “Most Common Logical Errors in a Sufficiency Tree.” It’s worth reviewing those just before you begin outside scrutiny

Techniques for “Shortstopping” Logical Challenges

techniques, rather than procedures, because they’re more a matter of personal style and execution than prescriptive steps

When “All” or “None” Are Not Acceptable

the word “some.” It’s a “qualifier

Inclusive and Exclusive

our statements may not be valid if they’re completely inclusive or exclusive. We may have to qualify our statements, especially if we intend to present our trees to others

Qualifying Words

some,” “many,” “most,” “few

Too Many Arrows?

This normally results when a tree builder fails to question whether some of them might be additional causes rather than contributing sufficient causes

if you are tempted to run four or more arrows through an ellipse to an effect, consider that a “warning flag.”

Simple Logical Aid #1: Means, Method, and Motivation

Aristotle suggested that observed effects are the result of three equally important causal factors: • Means (resources) • Method (a way to act) • Motivation

The “common cause” configuration Sometimes one contributor is common to two different cause groups. More “bang for a buck” is possible by attacking that cause.

Simple Logical Aid #2: The Syllogism

A syllogism is composed of three parts: a major premise, a minor premise, and a conclusion

USING THE CRT WITH OTHER PARTS OF THE THINKING PROCESS

the Current Reality Tree is designed to lead into two other parts of the Thinking Process: the Evaporating Cloud and the Future Reality Tree.

The Current Reality Tree and the Evaporating Cloud

Why do critical root causes exist? If they’re such a serious drag on a system’s performance, you’d expect that someone would have stepped up and solved them before now. There are two possible reasons why this hasn’t happened: a) The problem has gone unrecognized, or b) there is hidden conflict underlying the situation

The Current Reality Tree and the Future Reality Tree

start creating a new configuration of your system, one that will eliminate the UDEs you identified in your CRT. Creating that new configuration—the way you want the system to function in the ideal world—is the role of the Future Reality Tree (FRT)

However, the FRT is rarely a completely new creation

What happens instead is some modification

What this portends for the FRT is that a substantial portion of the CRT—many of the same or similar entities, causal connections, and sufficiencies—are likely to be transferable to the FRT. In other words, there will be significant parts of the wheel that won’t have to be reinvented.

SUMMARY

Figure 4.45 Procedures for constructing a Current Reality Tree (CRT) ­ abbreviated checklist

• Critical Root Cause)
• Critical Root Cause)
• Negative Reinforcing Loop #2
• 104 Fordyce is cash-limited
• Positive Reinforcing Loop #
• CRITICAL Resolve in Future Reality Tree. ROOT CAUSE