This website or its third-party tools use cookies which are necessary to its functioning and required to improve your experience. By clicking the consent button, you agree to allow the site to use, collect and/or store cookies.
Please click the consent button to view this website.
I accept
Deny cookies Go Back

Intelligent Management

Deming and Theory of Constraints for CEOs and Executive Teams for the Age of Complexity. Ess3ntial Critical Chain Project Management

  • Home
  • about us
    • the founders
    • Dr. Domenico Lepore
    • Intelligent Management Success Stories
    • Our Books
    • Clients
    • Expanding Spiral of Positive Systemic Results with Intelligent Management
  • Decalogue Methodology
    • Decalogue Methodology for Whole System Management
      • How to adopt systemic organization management
    • Management Must Evolve Fast – 15 Days to Radically Improve Company Performance
    • 10 Steps for Transformation
    • Systemic Organization Management
    • Resource Library for Systemic Management
    • Our Education Modules for Systemic Management
  • Contact
  • Our Whole System Blog
  • Intelligent Management Italia
You are here: Home / Systems Thinking / Optimize Performance and 1+1 Equals More Than 2

Apr 27 2019

Optimize Performance and 1+1 Equals More Than 2

We posted an interview with W. Edwards Deming “”the man who transformed Japan into a formidable business competitor “on LinkedIn this week entitled “Management Today Does Not Know What its Job Is”. 

Part of the problem is that managers “don’t have the required knowledge or abilities.” Let’s look at some of the necessary knowledge that has to do with how to optimize performance.

Imagine a company that is  made up of 5 different production facilities that operate as if they were independent companies. without inter-depending. What is the combined profit? The profit of the whole organization is the simple sum of the profit of the single facilities. Nothing complicated here.

But what happens when these facilities in fact interdepend? Is it the same? We need some help from science here.

Some help from science

In the theory of systems, the global “performance” of any collection of entities that are NOT interconnected is simply the sum of the single performances. However, when the entities are interdependent, i.e. interconnected, then the global performance of these entities is NOT the sum of the single performances. The performance of the whole is not just the sum of the separate parts. It can be so much more.

As we said, if the facilities in our example are not independent and instead interact (interdepend) among each other, then the situation changes drastically. The interdependence is manifested in the exchange of products/services among the different facilities. This exchange generates a global performance that is affected by the variation and co-variation associated with the “exchange process”, and by the combined effect of the different “efforts” of the single facilities. Due to the highly non-linear nature of this process, the global performance of the system cannot, and will never be, the simple sum of the single performances.

How can performance optimization be done?

Since we do not know in advance the nature of the variation and co-variation we are dealing with, technically speaking we don’t have any “tool” that can predict the performance of the system. The combined effect of the different efforts can generate a performance that is even better than the sum of the single performances.

The solution to the “optimize performance” problem has various  aspects, and they form the foundation of any attempt to manage an organization systemically. They consist in:

  1. Understanding the System
  2. Understanding the Variation that affects our processes
  3. Synchronizing the System

Let’s take a brief look at these:

1. Understanding the System

First we have to understand the system. What does that mean practically? It means we have to design the interdependencies. We do this by mapping out all the processes with the aid of Deployment Flowcharts.

2. Understanding the Variation that affects our processes

We need to understand the nature of the variation associated with any process we operate.  We can do this by using Statistical Process Control, and we stabilize the processes and work toward the reduction of the associated variation through process improvement.

3. Synchronizing the System

Once the processes are stable, we can synchronize the system by subordinating each part of it to a well chosen constraint. In this way we focus the work of the organization towards a common goal   instead of focusing on individual, “local” goals as this leads to sub-optimization.

Hold your horses

The result we obtain is similar to the sum of vectors. In order to give a visual example, what would be the effect of two horses that are pulling a load but are heading in different directions instead of the same direction? The individual effort is the same, but the combined effort is different, depending on the directions they head towards. The more they pull in the same direction (common goal), with minimum diversion (low variation) and in synch, the greater the combined result. The same could be said of teams.

We need to design our organizations systemically so there are no artificial barriers to make sure that optimal performance can happen.

For a complete methodology for systemic management, see The Decalogue Methodology.

Since 1999, we have been presenting a new model for a systemic organization in detail, both in terms of the thinking behind it and how to conduct operations. We work alongside CEOs and Executive Teams to support the shift towards more effective, systemic strategy and operations. Our books include ‘Deming and Goldratt: The Decalogue‘, ‘Sechel: Logic, Language and Tools to Manage Any Organization’, ‘The Human Constraint‘ and most recently,  ‘Quality, Involvement and Flow: The Systemic Organization’ .  We support our international clients through education, training and the Ess3ntial multi-project software using Critical Chain to schedule competencies and unlock the potential of human resources. Based on our proprietary Decalogue methodology.

Written by angela montgomery · Categorized: Systems Thinking, systems view of the world · Tagged: co-variation, Deming, optimize performance, variation

Search Form

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Sign up for our Blog and receive our White Paper ‘Out of the Crisis – A New Kind of Science for Management’

Sign up for our blog here to receive all our blog posts by e-mail.

Search Form

Recent Posts

  • Physics and Management: What You Must Understand to Lead and Manage Today April 15, 2021
  • Systems Thinking and Quantum Theory – Why We Need Them for Business April 8, 2021
  • How to Cope With Change: Understanding Cause and Effect March 26, 2021
  • Managing Change Effectively with a Systemic Framework and Method March 17, 2021
  • Decisions and Change – Thinking Processes for a Complex World March 10, 2021
  • Effective Decision-Making? Understand Your Driver Needs First March 6, 2021
  • Why Is Managing Change So Hard and How Can We Make it Easier? February 25, 2021
  • Creating Connections Between Company Functions – Back to Deming February 19, 2021
  • Human Resources – a New Perspective for Our Post-Pandemic World February 10, 2021
  • What’s Driving Profitability in Your Business and What Isn’t – How to Find Out February 3, 2021
  • Business, Politics, Wall Street: the Learning Organization and Our Interconnected Future January 29, 2021
  • What Does it Take to Be a Leader in Today’s Complex World? January 21, 2021
  • A New Economics for Sustainable Prosperity – Out of the Crisis Series Part 7 January 13, 2021
  • Identifying Assumptions to Unlock Innovation and Move Beyond the Crisis – Out of the Crisis Series Part 6 January 6, 2021
  • Learning to Think Systemically to Make Informed Decisions and Pre-empt a Crisis – Out of the Crisis Part 5 December 30, 2020

Social Icons

  • Facebook
  • Google+
  • RSS
  • Twitter

Archives

  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • March 2014
  • February 2014
  • January 2014
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • March 2013
  • February 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011

Recent Posts

  • Physics and Management: What You Must Understand to Lead and Manage Today April 15, 2021
  • Systems Thinking and Quantum Theory – Why We Need Them for Business April 8, 2021
  • How to Cope With Change: Understanding Cause and Effect March 26, 2021
  • Managing Change Effectively with a Systemic Framework and Method March 17, 2021
  • Decisions and Change – Thinking Processes for a Complex World March 10, 2021

Connect with us on LinkedIn and Twitter

  • LinkedIn
  • Twitter

Sign up for our blog

  • Home
  • Blog Theory of Constraints & Deming
  • Library
  • How to adopt systemic organization management
  • Knowledge Base for ‘The Human Constraint’
  • Contact Us

© 2020 Intelligent Management Inc. Canada

Privacy Policy