TOC as a Path to Antifragility
In recent years, uncertainty, complexity, and variability have become everyday aspects of our reality.
Traditional methods of risk management have proven to be ineffective. It is futile to create a semblance of precision in an uncertain environment through detailed planning or to break down an organization into smaller parts (departments) to give the illusion of manageability.
Establishing an advanced risk management system is of little use if we cannot predict the next events. Therefore, it is essential to focus our efforts on improving our organizations’ response to change and strive to build an antifragile organization.
Antifragility recognizes that disruptions with significant impact cannot be predicted; “Black Swans” are logically explainable in retrospect but not foreseeable.
It goes beyond resilience; a resilient organization withstands shocks, but an antifragile organization actually improves and strengthens under stress.
Is TOC (Theory of Constraints) the path to antifragility?
Many roads lead to Rome, but for TOC experts, it is clear that TOC is a way to evolve towards antifragility.
Here are some examples of how TOC can be a means to achieve an antifragile organization.
- Principle: Accept Uncertainties
- TOC recognizes that we cannot immediately eliminate variability. Buffers are set up to protect the output from uncertainties.
- The conscious planning and management of a buffer are often smaller than the hidden buffers present in every organization.
- The learning process starts with buffer analysis—how much has uncertainty affected the buffer, and what are the root causes? Eliminating root causes improves the entire system.
- This is the core of antifragility: getting better from disruption without suffering damage.
- Asymmetric Options
- Proposed investments never have a single outcome but a range of outcomes. Look for asymmetric opportunities in our favor.
- A healthy project portfolio includes many asymmetric projects in its favor.
- You need more than the strictly necessary to respond to predictable stress factors.
- TOC’s approach in production illustrates this—overcapacity at non-bottlenecks is not a priority initially. Overcapacity is kept because it will be needed later to respond to stress.
- Buffers and overcapacity are positive; they become waste only when we have much more than necessary to respond to predictable stress factors.
- Via Negativita
- Stop doing the wrong things. It’s easier to know what doesn’t work than what works.
- In projects, multitasking is an example of what doesn’t work. TOC’s solution involves reducing multitasking.
- Skin in the Game
- Create conditions where every participant has something to lose due to their decisions and actions.
- TOC tools, like the conflict diagram, help align responsibility and accountability, ensuring that all participants have something to lose due to their decisions and actions.
Antifragility is not a state but a journey. Don’t forget to pack TOC in your suitcase.