Simplifying Innovation with TOC
I am on a serious roll with business novels. This time it is the newly-published Simplifying Innovation by Michael A. Dalton. The basic idea behind this book is to apply Theory of Constraints ideas to the process of innovation. Overall, I thought the book did a good job of putting it all together, though it may feel a bit rushed.
The interesting take in this book is that Theory of Constraints is already familiar to the main character - as applied in manufacturing. She doesn't know where to begin in new product development and gets the assistance of an old friend from the local college, who knows TOC. And Dalton uses this connection to present the basics of Theory of Constraints in one or two pages, rather than re-deriving TOC from scratch. For newcomers to TOC, this could be an overly-quick introduction with the characters seeming to "get" TOC very quickly - although some of the characters are certainly hold-outs.
And the book goes through the TOC ideas in a step-by-step fashion, just as a good TOC analysis would do. One of the first things is to identify the goal of the business. For profit-seeking enterprises it is some version of "make money now and in the future." Innovation is all about the "in the future" part of this equation. And from there, one applies the Five Focusing Steps to the organization.1. What limits your ability to get more of the goal (the constraint)? I like how the book acknowledges that each organization is going to have a different constraint, so the prescriptions have to be taken at this high level. In the book, one company has a constraint at the design engineering step, and a second company has a constraint in coming up with enough good ideas. Obviously, the answers to the subsequent questions are very different, depending on the location of the constraint.
Once you know where the constraint is, the focusing steps take you through more questions. 2. How can you get more from the constraint? 3. How should the rest of the organization align to that constraint? 4. Then consider elevating the constraint, if you still need more. 5. And don't rest on your laurels, check if the constraint has moved, and consider whether you want it to move from a strategic perspective.
A couple interesting things came out of the book, based on my own experience and knowledge. I was somewhat expecting the book to talk about applying Critical Chain Project Management to new product development, but it didn't do that directly. Instead, applying the five focusing steps, CCPM comes up as a technique to help with exploiting the constraint. And the book suggests that several actions taken as part of a CCPM implementation should be considered as the higher-level application of TOC to the entire innovation process. For example, you only need to cut out excess work-in-process if that is actually a problem in your particular environment. And aligning the rest of the business to the constraint? It does not mean simply "leave the constraint alone." The rest of the business should be looking for ways to help the constraint - and the book provides a couple examples where that can be very effective.
For people already in the TOC community some of this material may be familiar - Dalton even acknowledges as much in the introduction. That said, it is a nice description of how the pieces can work together. And, if you don't get it from the story, Dalton provides a decent set of end notes and a website with extra resources, including the entire end notes. Clarke Ching published an interview with Mike Dalton a few weeks ago that provides some more context to Dalton's take on innovation and TOC. If you don't like the business novel format, Dalton said that he's hoping to come out with a "Simplifying Innovation Guidebook" in the near future. And Dalton has joined the Critical Chain / cmsig mailing list and has participated in a few conversations.
One last thought. With so many of these TOC-applied-to-X-business books available, the old argument of TOC being a manufacturing-only discipline doesn't hold much water. Certainly, Goldratt and others have known this for a long time.
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