Way back in 1988 at Lockheed, a systems engineer suggested using the principles of that discipline to overhaul processes within the company itself – that is, as compared to designing systems to fly through the air. The basic approach was simple:

1. Spend a lot of time trying to figure out what the system is supposed to do. Often this is not a trivial task where human systems are concerned
    

2. Condense the system’s mission down to a minimal set of functions – transitive verbs in the imperative voice – needed to accomplish the purposes of the system. This may require going down several levels (In order to do A, I have to accomplish B, C, and D. In order to do B, I have to …) Lots of asking “Why?” (or “Who says?”) at each step
    

3. Continue with steps 1 and 2 until your boss suggests that it’s time to see some results
    

4. Work with the people in the system to devise clever ways to accomplish the functions that are left.

We thought we were really on to something, and in 1988 terms, we were. The paper we published on the process documented an 80% reduction in throughput times, 99% reduction in defects, and customer satisfaction that was off the charts. It appeared about three months before Michael Hammer’s paper that coined the term “reengineering,” and although his was in the Harvard Business Review and ours was in the Defense Systems Management Journal, the point was made.

Some 20 years later Bill Dettmer asks me to review his latest work on Eliyahu Goldratt’s Theory of Constraints (GTOC), something I had always considered something of a cult. Now, however, I was forced to learn something about it – a task made possible, even enjoyable, by Dettmer’s excellent new book – and wonder of wonders, it is based on the same principles that we used in 1988.

Dettmer and Goldratt have used the intervening time wisely. GTOC goes way, way beyond anything we ever dreamed of, and where we had to wing our way through extracting minimally essential functions and requirements and trying to sort out the conflicts, GTOC has a tool set for getting the job done. The simple graphical nature of these “trees” seems ideal for explaining what you’re doing not just to fellow GTOC practitioners but also to the people involved in the system and (most important) to the people paying the bills.

Let me give just one example. One of the most vexing problems in systems design – particularly concerning those made up of human beings – is conflict, where progress in one area seems to come at the expense of another. As an example, before the Japanese invasion, the US auto industry believed that to improve quality, you had to raise costs in order to cover the added inspection and fixing as well as the cost of higher quality components. The American companies had also convinced themselves that customers wouldn’t pay for improved quality above a certain point, so why bother? Logical, isn’t it – conflicts (tradeoffs) between price and quality?

This worked OK until the Japanese came along and showed them how to build a better car more cheaply and more quickly to boot.

As Goldratt demonstrated, conflicts often represent the effects of invalid assumptions, and his charmingly entitled “evaporating cloud” is a tool for dragging assumptions to the surface where we can shine the cold light of day on them. The focus is on breaking any implicit trade-offs, “compromises” as Goldratt calls them – such as between cost and quality – so that both can improve simultaneously. There were times when such a cloud would have come in handy.

I’m not remotely qualified to comment on the technical aspects of Dettmer’s approach, because I’ve never used GTOC itself, but I can report that his book is well illustrated and remarkably easy to follow. It is worth noting that Dettmer claims to have discovered a simplification to Goldratt’s original method by eliminating something called the “Transition Tree” and has proven through his own testing that his simplification works. So this book should be regarded as the result of experience in the field and not just as a rehash of Goldratt.

Many people will find the last chapter, on organizational change, a little strange since it doesn’t seem to have anything to do with GTOC. To me, however, it was the most interesting chapter because until the members of the organization begin acting in new ways, all of the logical thinking you’ve done up until this point is akin to constructing a fantasy world – sort of a Lord of the GTOC Rings.

Dettmer begins the chapter by sketching the basic principles of human behavior, but there’s a limit to what he can do in a couple of dozen pages or so. People do get Ph.D.s in this subject. So regard it as more of a brief survey of the field for those lab rats from the engineering school who skipped the Psych electives.

Then he does a very unusual thing for a technical text. He introduces John Boyd’s “Principles of the Blitzkrieg” (POB) as a way to get competence and full commitment, “even if you’re not there to guide or direct them” (p. 8-11). Which means that people have to take the initiative to seek out and solve problems, using the common GTOC framework to harmonize their efforts. In that sense, the POB can be considered as a powerful doctrine for connecting leaders and subordinates for implementing change. As people who have read my own book, Certain to Win (kindly cited by Dettmer, by the way) are aware, these principles underlie both the Toyota Way and modern USMC maneuver warfare doctrine, so there is good evidence that they will do exactly what Dettmer claims.

And right at the very end, he brings in the OODA loop. Boyd conceived of the OODA “loop” as a model for generating surprise and ambiguity in the minds of opponents, but it provides enormous advantages in any competitive situation. In any field, groups operating at rapid OODA tempo seem “crisp” and the people in them energetic and highly motivated. Experience from the Wehrmacht to the Israeli Defense Force to Toyota shows that groups that have internalized the POB naturally operate at high OODA tempos, and they drive the environment much more than they react to it. For this reason, it is an excellent way to tie everything together: If you use the principles of the blitzkrieg to unify leaders and members throughout the organization to apply GTOC, you will end up with an organization that functions at quicker and quicker OODA loop tempo. In business, such groups create products and services that surprise and delight customers – think Apple – and exploit these advantages before competitors can react.

Dettmer has made an important contribution to competitive strategy by writing what is, as far as I know, the first book to unify and demonstrate the power of both GTOC and the OODA loop. Operating together, they are going to be very, very hard to beat.