1. Navigating the New Complexity...................................................1
1.1 Dividing Things Up Is No Longer the Answer..................................2
1.2 Useful Lessons from Science: From Parts to Whole...........................3
1.3 The Organization: A Whole That Is Much More Than the
Sum of Its Parts...................................................................................4
1.4 New Leadership...................................................................................5
1.5 What Is a Leader?................................................................................6
1.6 Leadership and Knowledge................................................................6
1.7 Leadership and Selflessness................................................................7
1.8 Quality, Involvement, Flow.................................................................8
1.9 Leadership Thinking: Framing the Change as a Conflict..................9
2. Why Are We Stuck? The Inherent Conflict of Organizations.....11
2.1 What's Wrong with a Hierarchy?.......................................................12
2.2 The Silo Sickness...............................................................................12
2.3 The Inherent Conflict in Any Organization.....................................14
2.4 Finding a Solution to the Hierarchy Conflict....................................17
2.5 A New Kind of Organization: Coordination Instead of
Functional Reporting.........................................................................19
2.6 The Challenge of the Solution to the Hierarchy Conflict................20
3. Where Does the Knowledge to Move Forward Come From?
The Giant Contributions of Dr. Deming and Dr. Goldratt..........23
3.1 Quality and Involvement through Deming......................................25
3.2 Flow and the Theory of Constraints.................................................27
4. What Is an Organization? The Fundamental Constituents.........31
4.1 A Closer Look at the Four Essential Constituents of
an Organization.................................................................................32
4.2 New Awareness about Interactions..................................................34
4.3 Stakeholders and Corporate Social Responsibility...........................35
4.4 A New Organizational Design..........................................................35
5. How Can We Blend the Deming and Goldratt Principles
in a Practical Way?......................................................................37
5.1 How a Deming and Goldratt Methodology Emerged......................38
5.2 Understanding the Organization as a System: Flowcharting
the Processes.....................................................................................43
5.3 Variation and Its Importance for Managing Organizations as
Systems..............................................................................................45
5.4 Variation and Complexity.................................................................45
5.5 Prediction versus Forecast.................................................................47
5.6 Adding the Constraint to the Organization Viewed as a System.......48
5.7 The Need for a Constraint................................................................49
5.8 Protecting the Constraint: The "Buffer"............................................54
5.9 Managing Variation and Constraint(s)..............................................55
5.10 The New Organization: Rolling Out the Solution of
the "Choked" System.........................................................................57
6. Why Projects Can Become the Backbone of
the New Organization.................................................................61
6.1 How People Come to Work Together: Process and Project............61
6.2 Systemic Project Management...........................................................62
6.3 The Critical Chain Approach to Project Management......................63
6.4 What Does a Systemic Project Manager Do?....................................64
6.5 Quality, Involvement, and Flow through Project Management.......65
6.6 The Constraint and Project Management.........................................68
6.7 What Does This Mean for a Leader? Toward the
Organizational Design of a Network of Projects.............................70
6.8 A New Organizational Design Calls for a New Leadership.............71
7. Making the Change Operational: The Network of Projects.......73
7.1 What Is a Network and How Do Networks Behave?.......................74
7.2 Complex Networks and Real Organizations....................................75
7.3 Connecting "Organizations as Complex Networks" with
the Decalogue Methodology.............................................................76
7.4 Networks, Organizations, and Variation...........................................78
7.5 Optimizing Resources through the Organization as a Network
of Projects..........................................................................................79
7.6 A New Kind of Hierarchy.................................................................81
7.7 The Cognitive Challenge...................................................................82
7.8 Career Paths and the Systemic Organization...................................83
7.9 Achieving So Much More..................................................................84
8. Ten Steps for Designing, Measuring, Managing,
and Improving the System..........................................................85
8.1 Scope and Purpose of the Decalogue Methodology.......................85
8.2 Optimizing the System......................................................................86
8.3 What to Change, What to Change to, and How to Make
the Change Happen..........................................................................87
8.4 The Decalogue in Three Fundamental Phases................................88
8.5 The 10 Steps of the Decalogue.........................................................90
9. Why Do We Get Stuck on the Path of Transformation?
The Inherent Conflict of Change................................................99
9.1 Change and Consciousness...............................................................99
9.2 The Constancy of Change...............................................................100
9.3 Looking at the Conflict Cloud of Change....................................... 101
9.4 Change and Leadership...................................................................103
9.5 Core Conflicts..................................................................................104
9.6 Levels of Resistance to Change.......................................................105
10. The New Intelligence: Intelligent Emotions and How to
Foster a New Systemic Intelligence..........................................109
10.1 Systemic Thinking to Inform Decisions and Minimize Risk.......109
10.2 The Cognitive Constraint: Relearning to Think........................... 110
10.3 The Cognitive Shift....................................................................... 111
10.4 The Tools We All Need................................................................. 112
10.5 Shifting Beyond the Hierarchical Mindset................................... 114
10.6 The Pattern for Change with the Thinking Process Tools.......... 114
10.7 Building the Core Conflict Cloud................................................. 115
10.8 Finding the Breakthrough Solution with "Injections"..................120
10.9 The Future Reality Tree................................................................121
10.10 A Real-life Example from Core Conflict to Future Reality Tree...... 121
10.11 Creating the Continuum from Systemic Strategy to Action.........130
10.12 Gathering and Deploying Knowledge to Reach the Goal........... 131
10.13 How to Cause the Change—Obstacles Along the Road to Change..............................................................................................132
10.14 Making the Change Happen with the Transition Tree................133
10.15 To Summarize: The Cycle of the Thinking Process Tools
in the Decalogue...........................................................................135
10.16 Understanding, Knowledge, and Science in a Conscious
Organization..................................................................................136
11. New Intelligence—New Leadership—New Economics.............139
11.1 Role of the Leader...........................................................................139
11.2 New Leadership Methods and Tools.............................................. 141
11.3 Leading with Critical Chain............................................................. 142
11.4 Leading with the Thinking Process Tools and Intelligent
Emotions.......................................................................................... 142
11.5 A New Economics........................................................................... 145
11.6 Flawed Economic Models............................................................... 147
11.7 A New Outlook on Value and Wealth............................................ 147
12. Essential Knowledge for Leaders and Managers
(So They Can Manage Systemically Without Being Experts in Everything)..........151
12.1 Where Can We Learn the Right Stuff?............................................ 151
12.1.1 The Problem with Business Schools Today......................... 152
12.1.2 The Business School Conflict............................................... 154
12.1.3 A New Systemic Learning Pattern for Complexity.............. 155
12.1.4 Mindset, Values, and Ethics.................................................. 156
12.1.5 A Word About Experience................................................... 157
12.2 Where Do We Start? A Systems View............................................. 158
12.2.1 Being Process Oriented........................................................ 158
12.2.2 Mapping the System with Flowcharts..................................160
12.2.3 Getting Started...................................................................... 162
12.2.4 Setting the Goal of the System.............................................166
12.3 The Two Major Keys to Management: Variation and Constraint.......167
12.3.1 Variation and Management Decisions.................................. 167
12.3.2 Understanding Variation.......................................................169
12.3.3 Variation and Processes........................................................ 170
12.3.4 Working with Variation......................................................... 171
12.3.5 Gathering Data...................................................................... 171
12.3.6 How to Make a Process Behavior Chart.............................. 175
12.3.7 Prediction and Forecast........................................................ 176
12.3.8 Stability and Quality............................................................. 176
12.3.9 Specification Limits and Behavior Limits.............................177
12.3.10 Variation and the Fallacies of Budgets and
Performance Assessment....................................................181
12.4 Synchronous Management: Choosing and Managing
the Constraint..................................................................................182
12.4.1 The Systemic Model and Performance.................................183
12.4.2 Unbalancing a System around the Constraint.....................184
12.4.3 Protecting and Controlling the System: Buffer
Management..........................................................................185
12.4.4 Subordinating to the Constraint: Buffers and Variation......186
12.4.5 Using Control Charts to Size the Buffer...............................189
12.4.6 The Buffer and Performance Indicators...............................190
12.5 Improving Flow Company-wide.....................................................190
12.5.1 Improving Flow through Systemic Project
Management (Critical Chain)................................................ 193
12.5.2 Why Projects Fail.................................................................. 194
12.5.3 The Problem of Milestones and Multitasking...................... 195
12.5.4 Interdependencies and Variation..........................................196
12.5.5 Measuring the Progress of the Project................................. 197
12.5.6 The Decalogue Approach: A Project is a System................198
12.6 Measuring Our Progress Toward the Goal the TOC Way.............202
12.6.1 Constraints, Dynamics, and Organizations..........................203
12.6.2 Indicators from the Theory of Constraints..........................204
12.6.3 A Brief Digression on Speed and Time...............................206
12.6.4 The Constraint and Cash Generation...................................207
12.6.5 Situation 1: Market Constraint..............................................208
12.6.6 Situation 2: Internal Constraint.............................................208
12.6.7 The P&Q Exercise.................................................................209
12.7 Interacting Systemically along the Chain with Customers and
Suppliers..........................................................................................213
12.7.1 Finding Agreements that Maximize Value for the
Whole Chain.........................................................................213
12.7.2 Marketing and Sales as Systemic Activities
(External Constraint)............................................................. 214
12.7.3 Win-Win Sales...................................................................... 216
12.8 Continuous Breakthrough, Innovation, and Personal
Development................................................................................... 218
12.8.1 Creating the Right Network of Conversations
through the Thinking Process Tools.................................... 219
12.8.2 Intelligent Emotions..............................................................220
12.8.3 Involving the Individual at Every Level in the
Organization.........................................................................221
12.8.4 Overview of the Essential Knowledge Pattern
for Leaders and Managers....................................................223
