While there have been numerous discussions on the physical constraints determining the throughput of a system, be it the market (orders), production, procurement or cash, there has been precious little perspective shared on the most important constraint of them all: Management Time.
The everyday dilemma between the short term and the long term, the fire fighting, the choice of urgent over important and bad multi tasking, are all manifestations of the fact that management of all organisations have limited time. It would also be common sense to agree that in the end, management is responsible for the throughput of the organisation. So maximising the throughput given limited Management Time is key to an ever growing organisation.
At this point I would like to introduce a measurement called ROTI – Return on Time Invested. The return is of course in terms of throughput and the Time Invested is in hours or days. Elapsed time is often a good proxy for Management Time as the productive time of management resources is directly proportional to the calendar time gone by. This is not to say that the time of other Human Resources is not important, but they are almost always guided by the senior management of an organisation.
Let us apply the well known Five Focusing Steps of Theory of Constraints to maximise throughput in a management time based system:
Identify the Constraint
This is already determined as Management Time.
Decide How to Exploit the Constraint
Using the same logic on management time as we have so far used on machines, it is obvious that touch time is much less than lead time, most probably less than 10% as in classical discrete manufacturing cases. So, using tools and techniques to reduce the touch time such as how to type faster or make power point presentations faster is less important that reducing the waiting time.
Now why is waiting time so much in a typical manager’s day? Obviously, the main culprit is bad multi-tasking. Combined with the fact that set up between different tasks is pretty long, most managers wonder what they have tangibly achieved at the end of the day.
I once witnessed a board meeting where the decision to set up a canteen took three hours while an investment amounting to more than Rs. 100 Crores took not more than 15 minutes.
The solution is therefore to choose those activities that will provide the maximum throughput for management time – ROTI.
This choice is simple, but not easy:
Check if all tasks are going to increase Throughput for the organisation; are these tasks best done at your level or are you doing the job of your subordinates? Remove and allocate all such tasks.
Prioritise among the remaining tasks using the criteria of due date for those tasks. Estimate based on your experience the time similar tasks have taken in he past. Cut this task time by half. Do not start any task before this new task time unless you really do not have any other value adding task (highly unlikely).
Divide the time for the task into three parts and as you monitor their progress and status, colour them in your task book or diary in three colours – Green if the task is finished in one third of the time, Yellow if the task is finished in two-thirds of the time and Red if the task finishes in the last third time. Of course, if the task does not finish in the due date (promised to someone else or to oneself), then the colour is black.
This buffer management of your time results in effective monitoring of your task progress and early warning signals if the task has a chance of getting delayed. It also helps to take expeditious action in case the task is in the Red or Black.
Subordinate everything else to the above decision
All policies in the organisation must subordinate to the requirement of exploiting Management Time. One such critical policy is that of measurement. Management of the organisation must be measured in such a manner that all their activities are focused on increasing current and future throughput. Departmental level measurement must be done away with at the senior most levels as they encourage tasks that have nothing to do with increasing overall organisational Throughput.
Elevate the Constraint
This is a very important step increase management productivity in terms of Throughput. As organisations grow due to increase Throughput, it proves to be virtually impossible for the same levels of management to continue undertaking the same tasks. The volume of each task multiplies, forcing the management to look for others who can take up more of these tasks. This is where elevation plays a critical role:
Training and development to enable the next lower management levels to start taking up higher level tasks
Recruiting from outside the organisation
The processes of people development and Succession planning must elevate the constraint of current management time at a pace that enables the organisation to grow on the red curve.
Maintain progressive Equilibrium
This is a given in the case of management time based constraint. Whereas in the world of physical constraints, there is the danger of another part of the system becoming a constraint on elevation of the earlier identified constraint, management time continues to be the overriding constraint as organisations grow larger, provided the actions actually increase throughput.
Performance Management. Productivity enhancement. Whatever, we may name it, enhancing the capacity of management to take the right decisions and then act upon them in the shortest possible time frames will determine the winning organisation from the rest. In the majority of organisations, managers play the role of one level junior to them, in good organisations they play the role consistent with their level, while in excellent organisations, they play the role of one level higher to them. This is how management performance is enhanced over a period of time, providing the true driver for Decisive Competitive Edge.
