TOC ICO 2006, Strategy and Tactics Trees
I am at the TOC ICO (Theory of Constraints International Certification Organization) annual conference in Miami this week. The first two days consist of Eli Goldratt describing new thinking in the TOC community. Saturday he focused on the Strategy & Tactics Tree for the Reliable Rapid Response template of Viable Vision. I have heard the discussion of this tree in the past, but Goldratt has added some new pieces to the tree, including another level of detail, in the past few weeks.
S&T Trees are created to describe the logic behind the overall strategy for large changes, such as what is involved in Viable Vision. Each node in the tree describes assumptions and the strategy and tactic related to the assumptions. Assumptions in this case are facts of life that are known or believed to be in existence for the organization / environment. These are the checks to make sure that the strategy and the tactic are the right thing for a given organization. The idea behind each node is to provide the "what for" and the "how" to a given piece of the overall puzzle. And it is very clear that the organization must accomplish all the nodes below a given entry for that strategy to materialize. Each node contains the following:
- Necessary assumptions: The facts of life that give rise to the strategy. These might describe the state of the organization or of the industry.
- Strategy: "What for?" What is the organization planning to do about these necessary assumptions?
- Parallel assumptions: Facts of life that provide guiding direction for the strategy. These give background to the tactic and build in more depth to why it is the right tactic.
- Tactic: "How do I accomplish this?" What must an organization must do in response to the above.
- Sufficient assumptions: What must happen to make the tactic possible.
For the Viable Vision templates, the S&T Trees describe everything that Goldratt believes, based on experience and his own insights, must happen to take a company's current sales and turn that into net profits within four years.
Goldratt noted in the discussion that it is very important to describe the full logic of a major change because people naturally see things through their own point of view. The goal of the S&T Tree is to give all the reasoning behind a change of direction in order to get as much buy-in as possible.
The other interesting thing about the discussion of S&T Trees was Goldratt's description of where Viable Vision projects should go. Viable Vision calls for continuous growth in sales - exponential growth, in fact. In order to support that the supply chain (manufacturing, project management, distribution) must be completely synchronized so that as sales grows, the organization is able to grow its capacity to supply the market in a logical and organized fashion. Goldratt calls this progressive equilibrium: always growing, but never in such a way that throws the business into chaos.
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