Borders and Xerox are two business organizations that can teach us a valuable lesson. Borders sells books through retail stores to customers. Xerox sells machines for making copies of papers. What could these two different companies have to teach us?
It is a lesson that we can learn from nature. Charles Darwin was a scientist who realized that species (i.e. animals) were evolving over time. Species learned to adapt or risk becoming extinct. I learned much about Darwin from an exceptional movie titled Creation. This movie presents the story of how he ended up writing a book on his theory of evolution. (I am aware that there has been controversy on this book because some people believe his theory in contradiction with what was written in the Bible. That is a subject for another blog.)
Xerox successfully adapted when the business world started to reduce paper consumption and copying. Borders, on the other hand, did not successfully adapt when the world started moving more toward electronic, rather than paper books. That is why Borders recently filed for bankruptcy protection. Barnes & Noble, another bookstore retail chain, has successfully adapted thus far. For example, this organization has moved into the electronic age with its book reader and online bookstore.
Adapting is not the only condition for continued life and prosperity. To prosper, an organization must successfully implement an effective plan of strategies and tactics to become ever-flourishing. A number of organizations have utilized the Transformational Strategy and Tactic tree (from TOC) to become ever-flourishing. The key to continued life and prosperity of any organization is to not only be successfully led and managed, but also to continue to adapt to the changing environment.
Friday, April 1, 2011
Thursday, March 31, 2011
Planet Earth - ensuring our home is in great shape
This morning, I was enjoying my walk on the Greenbelt trail in Scottsdale, Arizona. This trail is a long one that winds through the city and forks in different directions at times. It consists of a concrete path, with large areas of grass on either side. Scottsdale (which is near Phoenix) is part of the desert. That means all this grass has been artificially implanted here, along with an underground sprinkling system to sustain it.
As I was walking, I noticed there were a number of large puddles on the concrete. I realized these puddles were not due to rain, but rather the sprinklers. I became dismayed by the fact that so much water is being wasted, not just on the path, but on the implanted grass. I admit that the grass looks appealing and feels good to walk on with bare feet. However, we need to also consider the negative ramifications of our actions. Water is a valuable resource that should not be wasted.
The other night I watched an amazing YouTube video titled Home. The scenery and narrative were compelling. The objective of the video was to protect our planet, to understand how much damage we humans have caused. Watching the movie reminded me of Al Gore's work on global warming. His movie, The Inconvenient Truth, was also compelling. Even great movies, such as Avatar, The Bee Movie and The Last Unicorn convey similar ideas. Will we finally start listening to these messages and take appropriate action?
After I contemplated the movies further, I remembered some thoughts that Eli Goldratt shared in his great book, The Choice, explaining his philosophy of life. He pointed out that Newton stated that nature is exceedingly simple and harmonious with itself. Eli used lessons and methods from the hard sciences to apply to developing his approach to teach the world to think (his goal in life).
My conclusion is that we need to take actions to not only protect all life on Earth (plants, animals, ...), but more importantly to ensure that the harmony is restored and sustained in the future. Nature has much to teach us about life.
As I was walking, I noticed there were a number of large puddles on the concrete. I realized these puddles were not due to rain, but rather the sprinklers. I became dismayed by the fact that so much water is being wasted, not just on the path, but on the implanted grass. I admit that the grass looks appealing and feels good to walk on with bare feet. However, we need to also consider the negative ramifications of our actions. Water is a valuable resource that should not be wasted.
The other night I watched an amazing YouTube video titled Home. The scenery and narrative were compelling. The objective of the video was to protect our planet, to understand how much damage we humans have caused. Watching the movie reminded me of Al Gore's work on global warming. His movie, The Inconvenient Truth, was also compelling. Even great movies, such as Avatar, The Bee Movie and The Last Unicorn convey similar ideas. Will we finally start listening to these messages and take appropriate action?
After I contemplated the movies further, I remembered some thoughts that Eli Goldratt shared in his great book, The Choice, explaining his philosophy of life. He pointed out that Newton stated that nature is exceedingly simple and harmonious with itself. Eli used lessons and methods from the hard sciences to apply to developing his approach to teach the world to think (his goal in life).
My conclusion is that we need to take actions to not only protect all life on Earth (plants, animals, ...), but more importantly to ensure that the harmony is restored and sustained in the future. Nature has much to teach us about life.
Wednesday, March 30, 2011
A chance meeting on a plane with an exceptional young man
About a week ago, I met an exceptional man on my flight from Indianapolis (on my way back to Arizona after visiting family there). His name is Josh Bleill. Josh lost both his legs as a Marine in Iraq during the war. Josh was traveling with his wife, Nikki, and their two month-old daughter, Allie. We had a good conversation on the hour-long flight. I was impressed with his attitude and approach to life.
Josh is the Colts Community Spokesman. It was interesting to talk with him given my family's passion for the Colts NFL football team. I started following the sport closely last year after I developed a real interest in American football once I understood more about strategy in the sport. It must have been difficult for the team and Peyton Manning (the quarterback) to lose in the playoffs in the last few minutes of the game.
Before the end of our flight, I decided to give Josh a gift: President Barack Obama's book Of Thee I Sing: A Letter to my Daughters. I thanked him for his service to our country. I didn't sign the book because it not up to me to do so. I think it would be great if our President, at the very least, signed his book.
Today, I went online to find out more about Josh. I learned that he wrote a book titled, One Step at a Time: A Young Marine's Story of Courage. He also can be booked to speak at events. For more information, go to www.colts.com/onestep.
Josh is the Colts Community Spokesman. It was interesting to talk with him given my family's passion for the Colts NFL football team. I started following the sport closely last year after I developed a real interest in American football once I understood more about strategy in the sport. It must have been difficult for the team and Peyton Manning (the quarterback) to lose in the playoffs in the last few minutes of the game.
Before the end of our flight, I decided to give Josh a gift: President Barack Obama's book Of Thee I Sing: A Letter to my Daughters. I thanked him for his service to our country. I didn't sign the book because it not up to me to do so. I think it would be great if our President, at the very least, signed his book.
Today, I went online to find out more about Josh. I learned that he wrote a book titled, One Step at a Time: A Young Marine's Story of Courage. He also can be booked to speak at events. For more information, go to www.colts.com/onestep.
Saturday, February 19, 2011
Why don't we follow good advice?
Today, I was pondering the question of why people don’t follow the advice given to them. I believe there are several potential explanations regarding why we don’t do what is suggested, assuming the advice is good.
One reason is that the person really does not understand the advice. We need to be sure to listen carefully, ask questions, take notes or ask for visual aids to ensure we fully understand the advice being provided. The key to understanding is to know what to do, how to do it and the logic underlying the recommended actions.
Another potential reason is that we don’t fully trust the person giving us the advice. In other words, we question whether or not their expertise is valid regarding the subject the advice is being offered on. One way in which we can validate their expertise is through questioning. Before taking advice, I first make sure I fully understand what is being recommended and why. Unless the full logic makes sense to me, I won’t act on the advice. I check it using cause-and-effect logic in general and based on knowledge I have acquired in life thus far.
Another reason for not following someone’s advice relates to the difference between what was explained and what actions you took to implement it. When I learned how to write Strategy and Tactic trees, I realized how important it is to clearly explain actions in terms of what the action is for and why the action is the best choice for achieving the objective. The only way a person can follow advice well is by fully understanding the advice. For example, it is not just about knowing the rules. When you know the rules and the logic of the rules, you can understand what to do in different situations. Then, you will know how and when to break a rule effectively to still achieve the desired objective.
One reason is that the person really does not understand the advice. We need to be sure to listen carefully, ask questions, take notes or ask for visual aids to ensure we fully understand the advice being provided. The key to understanding is to know what to do, how to do it and the logic underlying the recommended actions.
Another potential reason is that we don’t fully trust the person giving us the advice. In other words, we question whether or not their expertise is valid regarding the subject the advice is being offered on. One way in which we can validate their expertise is through questioning. Before taking advice, I first make sure I fully understand what is being recommended and why. Unless the full logic makes sense to me, I won’t act on the advice. I check it using cause-and-effect logic in general and based on knowledge I have acquired in life thus far.
Another reason for not following someone’s advice relates to the difference between what was explained and what actions you took to implement it. When I learned how to write Strategy and Tactic trees, I realized how important it is to clearly explain actions in terms of what the action is for and why the action is the best choice for achieving the objective. The only way a person can follow advice well is by fully understanding the advice. For example, it is not just about knowing the rules. When you know the rules and the logic of the rules, you can understand what to do in different situations. Then, you will know how and when to break a rule effectively to still achieve the desired objective.
Thursday, February 17, 2011
Are people good or bad?
Years ago, this question was posed to me in a late night discussion with Eli Goldratt. Actually, the question was about whether people should be considered good or 'not bad.' This subject came up because his son Rami and he had reached different conclusions. One of them thought people are good, while the other thought people are not bad. What do we mean by this? Well the question is really about whether in general people are good or not.
I have reached the conclusion that, in general, people are good. I think that the vast majority of people want to do good for themselves, for their loved ones, friends and for their work. That doesn’t always mean the actions they are taking will achieve a good result. It was Reuven Brenner who stated that “The road to hell is paved with good intentions.”
It is important to make sure that people understand how to ensure that their actions do achieve the intended result (of course, assuming this is a positive change or result desired). That is what TOC provides, an effective way to think. TOC involves surfacing and challenging assumptions, evaluating decisions using cause-and-effect logic and other tools for guiding more effective thinking processes.
First, we need to start with a good objective or target – to clearly state it in writing. Then we can use the TOC Thinking Processes (TP) to figure out how to effectively reach that goal. The TP provide generic methods for figuring out what the problem is or what the pot of gold target is (what to change), what to change to and how to cause the change.
This isn’t sufficient though. What is needed is the understanding about what information needs to go into the TP analysis to ensure that the desired results are achieved. I will talk more about this so-called information in future blogs.
I have reached the conclusion that, in general, people are good. I think that the vast majority of people want to do good for themselves, for their loved ones, friends and for their work. That doesn’t always mean the actions they are taking will achieve a good result. It was Reuven Brenner who stated that “The road to hell is paved with good intentions.”
It is important to make sure that people understand how to ensure that their actions do achieve the intended result (of course, assuming this is a positive change or result desired). That is what TOC provides, an effective way to think. TOC involves surfacing and challenging assumptions, evaluating decisions using cause-and-effect logic and other tools for guiding more effective thinking processes.
First, we need to start with a good objective or target – to clearly state it in writing. Then we can use the TOC Thinking Processes (TP) to figure out how to effectively reach that goal. The TP provide generic methods for figuring out what the problem is or what the pot of gold target is (what to change), what to change to and how to cause the change.
This isn’t sufficient though. What is needed is the understanding about what information needs to go into the TP analysis to ensure that the desired results are achieved. I will talk more about this so-called information in future blogs.
Thursday, February 10, 2011
Multiple Chemical Sensitivities - how not to cause harm in the world
Years ago, a member of my family was diagnosed with a medical condition called Multiple Chemical Sensitivities. Her body had developed an intolerance to various chemicals that exist in society. Her symptoms include seizures, headaches and nausea, to name a few. She needed to move into a new home, one that was prepared for people who have severe allergies. She is unable to go out in society much because the scents of perfumes and other smells can cause her to become very ill and unable to recover for days.
It wasn’t until she was diagnosed that I became aware of this type of medical condition. The plan the doctors devised to help her include eating organic foods, taking oxygen and regularly using a dry or infrared sauna to detoxify her body. That is not a comprehensive list of her treatment plan though. I just wanted to share part of her plan here.
I was surprised about a year ago to see a sign in a bathroom at a park which stated that only natural cleaning products and supplies were being utilized there because of people with multiple chemical sensitivities. These experiences, in addition to others, led me to the realization that many of the chemicals, food products and supplies we have created in this world are causing harm to people, in some cases severe damage. How much harm is it causing those of us who don’t have her medical condition? How much damage is happening in nature and to other forms of life as well?
I am not bringing this subject up to cause any kind of harm to the organizations involved in the production or distribution of the products mentioned (i.e. chemicals). I just want to further create an awareness that we can each make a choice to take actions that do not cause harm to anyone or anything in this world. I have no problem whatsoever with businesses making money, as long as the actions taken are ethical, moral and legal. I applaud any organization with a sincere goal of “Our organization is ever-flourishing; continuously and significantly increasing value (creating growth and stability) for all stakeholders – employees (including suppliers), clients and shareholders (while preventing harm to the world - society and the environment - due to our actions or lack of action)."
It wasn’t until she was diagnosed that I became aware of this type of medical condition. The plan the doctors devised to help her include eating organic foods, taking oxygen and regularly using a dry or infrared sauna to detoxify her body. That is not a comprehensive list of her treatment plan though. I just wanted to share part of her plan here.
I was surprised about a year ago to see a sign in a bathroom at a park which stated that only natural cleaning products and supplies were being utilized there because of people with multiple chemical sensitivities. These experiences, in addition to others, led me to the realization that many of the chemicals, food products and supplies we have created in this world are causing harm to people, in some cases severe damage. How much harm is it causing those of us who don’t have her medical condition? How much damage is happening in nature and to other forms of life as well?
I am not bringing this subject up to cause any kind of harm to the organizations involved in the production or distribution of the products mentioned (i.e. chemicals). I just want to further create an awareness that we can each make a choice to take actions that do not cause harm to anyone or anything in this world. I have no problem whatsoever with businesses making money, as long as the actions taken are ethical, moral and legal. I applaud any organization with a sincere goal of “Our organization is ever-flourishing; continuously and significantly increasing value (creating growth and stability) for all stakeholders – employees (including suppliers), clients and shareholders (while preventing harm to the world - society and the environment - due to our actions or lack of action)."
Tuesday, February 8, 2011
Problems in retail - more thoughts after my earlier blog
In an earlier blog dated February 1, 2011, I wrote about how retailers can dramatically improve their performance. I pointed out that the two biggest problems are shortages and surpluses.
I will now share more insights about other problems I have seen in retail. Recently, I was at a grocery store of a large well-known retail chain in the states. When I walked in, there was not a single cart at the entrance to the store in the large holding area for carts. I heard other people complaining about the lack of them. I noticed a short time later that an employee brought in some carts from the parking lot.
It reminded me of an experience I had years ago in which a large retailer had run out of bags to place your purchased goods in. As a result, they were using trash bags from inventory that was supposed to be sold to bag purchases. These are examples of shortages, but not of products we intend to buy, but rather to use to facilitate our shopping. It is important for retailers to effectively manage all types of inventory they sell and utilize.
Another problem I encountered at a store of a large hardware chain was the inability of four different employees to help me locate the product I was looking for. I heard some of them state that products sometimes are moved in the store without them knowing where they move to. Most likely a problem in communication from management. I can understand moving goods for various reasons, but not ensuring that the employees know where they are does not support actual customers trying to find them to purchase. Some people may even give up in frustration before finding the product they had planned to buy.
This brings me to a related complaint. I don’t always understand the logic of where goods are located within a store. It is frustrating when you think you know which department they would be in but can’t find them. I also have experienced poor signage in stores, especially large ones, which would help guide you to what you want to purchase. I would suggest making sure signs and the layout of the store and products logically encourage purchases. In additions, signs should help anyone who is new to the store know where to head to find what they are looking for.
The experiences above and others have led me to conclude that the Retailer Transformational Strategy and Tactic tree (TSTT) needs to have more strategies and tactics added to it. The Retailer TSTT currently includes many important actions necessary for achieving the goal, but not sufficient to ensure that any retailer becomes ever-flourishing. Each TSTT needs to include all the actions (with corresponding logic) necessary and sufficient for an organization to effectively achieve its goal and eliminate any unnecessary strategies and tactics from being implemented in order to ensure that the constraints of management attention and the market or other resources are best leveraged for success.
I will now share more insights about other problems I have seen in retail. Recently, I was at a grocery store of a large well-known retail chain in the states. When I walked in, there was not a single cart at the entrance to the store in the large holding area for carts. I heard other people complaining about the lack of them. I noticed a short time later that an employee brought in some carts from the parking lot.
It reminded me of an experience I had years ago in which a large retailer had run out of bags to place your purchased goods in. As a result, they were using trash bags from inventory that was supposed to be sold to bag purchases. These are examples of shortages, but not of products we intend to buy, but rather to use to facilitate our shopping. It is important for retailers to effectively manage all types of inventory they sell and utilize.
Another problem I encountered at a store of a large hardware chain was the inability of four different employees to help me locate the product I was looking for. I heard some of them state that products sometimes are moved in the store without them knowing where they move to. Most likely a problem in communication from management. I can understand moving goods for various reasons, but not ensuring that the employees know where they are does not support actual customers trying to find them to purchase. Some people may even give up in frustration before finding the product they had planned to buy.
This brings me to a related complaint. I don’t always understand the logic of where goods are located within a store. It is frustrating when you think you know which department they would be in but can’t find them. I also have experienced poor signage in stores, especially large ones, which would help guide you to what you want to purchase. I would suggest making sure signs and the layout of the store and products logically encourage purchases. In additions, signs should help anyone who is new to the store know where to head to find what they are looking for.
The experiences above and others have led me to conclude that the Retailer Transformational Strategy and Tactic tree (TSTT) needs to have more strategies and tactics added to it. The Retailer TSTT currently includes many important actions necessary for achieving the goal, but not sufficient to ensure that any retailer becomes ever-flourishing. Each TSTT needs to include all the actions (with corresponding logic) necessary and sufficient for an organization to effectively achieve its goal and eliminate any unnecessary strategies and tactics from being implemented in order to ensure that the constraints of management attention and the market or other resources are best leveraged for success.
Sunday, February 6, 2011
The Super Bowl - valuable lessons for life and business
Today is the Super Bowl in America – the football game that determines which team is the champion. Over the years, I have watched football off and on. Until a few months ago, I hadn’t developed a real interest in the sport. I already understood the basics of the game from watching it in the past. What I learned recently though is that the sport is about much more than I had realized.
The players have to be in excellent physical shape. They also need to understand strategy. Strategy is important for winning the game – both offensive and defensive strategy. Teamwork is critical as well. The strategy needs to focus on leveraging the strengths of the team members and the weaknesses of the other team. Each team member is important because his performance can make or break a play.
I realized that what you can learn from watching football can be applied in your life and in business. Valuable lessons can be learned if you are aware of what happened and why. Let’s take an example. One of the best teams this season was the New England Patriots, with the wonderful combination of Belichick (the coach) and Brady (the quarterback). These two were important for the team, in addition to the strategic planning and execution of all the teammates (including the other coaching staff and players). There was a rivalry with the New York Jets. Prior to the second match of these two teams this season, the coach of the Jets bragged that the his team would win. It was a crushing defeat, with the Patriots winning by 45 to 3.
Then, the next match between these two teams happened during the playoffs. This time, the Jets beat the Patriots. It was surprising to see how well their strategies worked. During the game, one of Brady’s passes was intercepted by the Jets – his first interception in over 300 passes! It was obvious at the end that Belichick and Brady were both stunned by the turn of events.
What happened? I think that the Jets desperately wanted to save face after their prior match and that they worked very hard preparing for this game. They had something to fight for! The Patriots, on the other hand, seemed to be off. Their strategy was not as good as it normally was. I also think that an important lesson to learn is to leave the past in the past. When a play does not go well, it is important to stay focused on the present and let it go. It will be interesting to see what happens in the Super Bowl. The quarterback of the Packers (Rodgers) is not only an exceptional player, but also able to stay in the present quite well.
The players have to be in excellent physical shape. They also need to understand strategy. Strategy is important for winning the game – both offensive and defensive strategy. Teamwork is critical as well. The strategy needs to focus on leveraging the strengths of the team members and the weaknesses of the other team. Each team member is important because his performance can make or break a play.
I realized that what you can learn from watching football can be applied in your life and in business. Valuable lessons can be learned if you are aware of what happened and why. Let’s take an example. One of the best teams this season was the New England Patriots, with the wonderful combination of Belichick (the coach) and Brady (the quarterback). These two were important for the team, in addition to the strategic planning and execution of all the teammates (including the other coaching staff and players). There was a rivalry with the New York Jets. Prior to the second match of these two teams this season, the coach of the Jets bragged that the his team would win. It was a crushing defeat, with the Patriots winning by 45 to 3.
Then, the next match between these two teams happened during the playoffs. This time, the Jets beat the Patriots. It was surprising to see how well their strategies worked. During the game, one of Brady’s passes was intercepted by the Jets – his first interception in over 300 passes! It was obvious at the end that Belichick and Brady were both stunned by the turn of events.
What happened? I think that the Jets desperately wanted to save face after their prior match and that they worked very hard preparing for this game. They had something to fight for! The Patriots, on the other hand, seemed to be off. Their strategy was not as good as it normally was. I also think that an important lesson to learn is to leave the past in the past. When a play does not go well, it is important to stay focused on the present and let it go. It will be interesting to see what happens in the Super Bowl. The quarterback of the Packers (Rodgers) is not only an exceptional player, but also able to stay in the present quite well.
Saturday, February 5, 2011
Overweight in America - a serious topic for discussion
When I was looking at clothing the other day at Walmart, I noticed that most of the items were in larger sizes. It was hard to find anything in a small size. Later, I read that over 2/3rd of the people in America are overweight. Why is that?
I started thinking about it and came to some possible conclusions. The eating portions in restaurants and homes are quite large in most cases. And many people eat “junk” food. Why don’t people eat organic food that is healthy for them? Why doesn’t each person eat the types of foods and drinks that are best for their bodies (based on blood type and how their bodies react to the food)?
Based on my international travels and other experiences, I concluded that America is a country of the world with a high level of unhappiness. It may be one of the richest with respect to material goods and opportunities, but happiness does not come from material objects. I have seen some of the poorest people of the world be the most happy. One reason why people don’t eat well could be due to trying to feel better through eating food that soothes them – food that tastes good and takes away their pain and suffering.
What happened in America? In many ways, it has not changed for the better. What I have heard, read and seen about the 1950’s in America led me to think that those times were better in many ways. That was before my time though, so I can’t speak from personal experience.
Now most people in America are filled with fear and anger. It doesn’t take much for some people to vent that anger. President Obama was elected based on the principles of “hope and change.” Unfortunately, it appears that Americans were hoping in vain for the situation to improve in their country.
I started thinking about it and came to some possible conclusions. The eating portions in restaurants and homes are quite large in most cases. And many people eat “junk” food. Why don’t people eat organic food that is healthy for them? Why doesn’t each person eat the types of foods and drinks that are best for their bodies (based on blood type and how their bodies react to the food)?
Based on my international travels and other experiences, I concluded that America is a country of the world with a high level of unhappiness. It may be one of the richest with respect to material goods and opportunities, but happiness does not come from material objects. I have seen some of the poorest people of the world be the most happy. One reason why people don’t eat well could be due to trying to feel better through eating food that soothes them – food that tastes good and takes away their pain and suffering.
What happened in America? In many ways, it has not changed for the better. What I have heard, read and seen about the 1950’s in America led me to think that those times were better in many ways. That was before my time though, so I can’t speak from personal experience.
Now most people in America are filled with fear and anger. It doesn’t take much for some people to vent that anger. President Obama was elected based on the principles of “hope and change.” Unfortunately, it appears that Americans were hoping in vain for the situation to improve in their country.
Friday, February 4, 2011
How can we ensure children are educated for success in school?
The most popular question of a five-year old child is “Why?” Why is that? It is because children are working on building a logical map of how the world operates. Each time an answer to the question is received, another connection is made – between a cause and an effect. Logical maps are easier to remember than just memorizing facts.
What happens as children progress through school? In many cases, the educational system in America (and possibly many other countries as well) has discouraged the usage and development of critical thinking skills. Critical thinking skills are a key part of the foundation for living a successful and happy life.
This leads me to wonder about what really should be taught in the educational system, from grade school through junior high school and high school. In America, children spend twelve years learning the basic skills and knowledge. I think we should carefully evaluate what is being taught during those twelve years to ensure the best potential of the children can be achieved in their personal and professional lives.
One skill that is important is critical thinking skills. An effective way to learn these skills is by learning the Theory of Constraints (TOC) Thinking Processes (TP). TOC for Education (TOCfE) is a not-for-profit organization which has taught millions of children, educators and administrators around the world the TOC TP. To learn more about the TP and TOCfE, see www.tocforeducation.com.
I shall end this blog with one example of an application of the TP. When the educational system was formed in America, it was designed to run for nine months of the year, with three months off from school during the summer. What was the logic underlying this decision? It was because the children needed to help their families with farming in the summer. Now that this is no longer the situation, shouldn’t we reevaluate what is the best way to educate our children? What are the negative effects of them having a whole three months off each year from their education? Perhaps it would be better to spread shorter breaks of two or three weeks across the calendar year instead.
What happens as children progress through school? In many cases, the educational system in America (and possibly many other countries as well) has discouraged the usage and development of critical thinking skills. Critical thinking skills are a key part of the foundation for living a successful and happy life.
This leads me to wonder about what really should be taught in the educational system, from grade school through junior high school and high school. In America, children spend twelve years learning the basic skills and knowledge. I think we should carefully evaluate what is being taught during those twelve years to ensure the best potential of the children can be achieved in their personal and professional lives.
One skill that is important is critical thinking skills. An effective way to learn these skills is by learning the Theory of Constraints (TOC) Thinking Processes (TP). TOC for Education (TOCfE) is a not-for-profit organization which has taught millions of children, educators and administrators around the world the TOC TP. To learn more about the TP and TOCfE, see www.tocforeducation.com.
I shall end this blog with one example of an application of the TP. When the educational system was formed in America, it was designed to run for nine months of the year, with three months off from school during the summer. What was the logic underlying this decision? It was because the children needed to help their families with farming in the summer. Now that this is no longer the situation, shouldn’t we reevaluate what is the best way to educate our children? What are the negative effects of them having a whole three months off each year from their education? Perhaps it would be better to spread shorter breaks of two or three weeks across the calendar year instead.
Thursday, February 3, 2011
Noise pollution - so disruptive to our bodies and feeling peaceful
Living in America, I have noticed recently that noise pollution is rampant. Being in a big city makes it hard to find peace and quiet. In the mornings, it is common to be disturbed or awakened by the sounds of garbage trucks, leaf blowers, lawn mowers, and sounds from the neighbors or from work happening. Not everyone gets out of bed first thing in the morning, particularly on weekends. It would be nice to sleep in, without being rudely awakened by an obnoxious sound.
Even in retail stores and restaurants, I have begun to notice that it is not uncommon for the music to not only be loud, but also to be a selection that is not pleasing to the ears. Sometimes, the music is so loud that it is nearly impossible to hold a conversation with the person you are with. I wonder why these service organizations don't select music that is appealing - a selection that would enhance the environment and their sales as well.
I don't think many people realize how negative the impact of disturbing sounds can be on the psyche and the body. I noticed a difference when I started using noise-canceling headphones on a plane. The sound of the engines creates a droning hum. When I used the headphones with some light pleasing music, I felt better. It wasn't just the impact of the music. It was, more importantly, the reduction of the engine noise.
I prefer to be in nature listening to the sounds of animals, birds and other creatures. The songs of the birds are beautiful and comforting to my spirit.
Even in retail stores and restaurants, I have begun to notice that it is not uncommon for the music to not only be loud, but also to be a selection that is not pleasing to the ears. Sometimes, the music is so loud that it is nearly impossible to hold a conversation with the person you are with. I wonder why these service organizations don't select music that is appealing - a selection that would enhance the environment and their sales as well.
I don't think many people realize how negative the impact of disturbing sounds can be on the psyche and the body. I noticed a difference when I started using noise-canceling headphones on a plane. The sound of the engines creates a droning hum. When I used the headphones with some light pleasing music, I felt better. It wasn't just the impact of the music. It was, more importantly, the reduction of the engine noise.
I prefer to be in nature listening to the sounds of animals, birds and other creatures. The songs of the birds are beautiful and comforting to my spirit.
Wednesday, February 2, 2011
Freedom in America and the world - thoughts on our history and the vision of our founders
Recently, I was thinking about the Statue of Liberty because the TOCICO International Conference will be held in New York this June. (We were considering which logo to use for the marketing materials.) The Statue of Liberty is a well-known symbol of freedom for America and a gift from France to celebrate friendship. Nearby Ellis Island was the location where millions of immigrants first came to enter America to become part of our “melting pot.” Inside the statue is a poem by Emma Lazarus that reads:
“Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!”
My research on the statue led me to think more about freedom, what America used to represent, and how the TOCICO International Conference can support “hope and change.” Freedom is what we want to provide with TOC in organizations, to be free from misery and suffering, to find a way to bring the light and life back into humans, all the people of this world, not just in America. The Statue of Liberty represents not only freedom and friendship, but more importantly how this country once had open borders. The TOC community has further opened the door to support organizations in efforts to become ever-flourishing, to continuously and significantly increase value (both growth and stability) for all stakeholders - employees (including suppliers), clients and shareholders.
I wonder about how America has strayed from the vision of its founders, such as those who created and signed the Declaration of Independence and Constitution. The borders are now closed for many people, while for others it is not easy to immigrate to the United States. Many American citizens complain about illegal immigrants and their negative impact on our society. We should not forget that America is a melting pot, once open to people from all over the world, those who chose to become part of our society.
I wonder why a country, any country, needs to have borders at all? Aren’t we all human? Shouldn’t we all be treated equally? Is there really a need for separation of societies? Or can we all live in peace and harmony together, making the world a better place to live, a utopia, an ideal society?
“Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!”
My research on the statue led me to think more about freedom, what America used to represent, and how the TOCICO International Conference can support “hope and change.” Freedom is what we want to provide with TOC in organizations, to be free from misery and suffering, to find a way to bring the light and life back into humans, all the people of this world, not just in America. The Statue of Liberty represents not only freedom and friendship, but more importantly how this country once had open borders. The TOC community has further opened the door to support organizations in efforts to become ever-flourishing, to continuously and significantly increase value (both growth and stability) for all stakeholders - employees (including suppliers), clients and shareholders.
I wonder about how America has strayed from the vision of its founders, such as those who created and signed the Declaration of Independence and Constitution. The borders are now closed for many people, while for others it is not easy to immigrate to the United States. Many American citizens complain about illegal immigrants and their negative impact on our society. We should not forget that America is a melting pot, once open to people from all over the world, those who chose to become part of our society.
I wonder why a country, any country, needs to have borders at all? Aren’t we all human? Shouldn’t we all be treated equally? Is there really a need for separation of societies? Or can we all live in peace and harmony together, making the world a better place to live, a utopia, an ideal society?
Tuesday, February 1, 2011
Dramatically improving retailer performance
By how much can retailer performance be improved? To answer this question, we need to consider which operational measures of performance are important. Retail owners and managers typically understand that sales per square foot and inventory turns (how quickly the inventory is sold and replenished in the store) are important. Both of these measures of performance indicate how well the limited space of the store/shop is being utilized to improve the financial measures of performance.
Now that we agree on the measures, we can discuss how much potential for improvement exists. First, we need to understand that two major undesirable effects are blocking the ability of a retailer to significantly improve its performance: shortages and surpluses. Shortages occur when an item that is supposed to be on the shelf is out of stock. When there is a shortage, sales are being lost, although the amount of lost sales is unknown. Some customers will buy a different product (substitute), while others will choose not to buy or buy elsewhere. Surpluses occur when the level of inventory is too high. One effect of surpluses is blocked shelf space, which could be utilized to stock a larger variety of items to sell. The impact of both shortages and surpluses is detrimental to financial performance. What if we could find a way to dramatically reduce both shortages and surpluses? The result would be significantly improved performance.
Let’s begin by addressing inventory turns. Walmart, the world’s largest retailer, has on average about 12 inventory turns per year. This means that the stores are holding about 4 week’s worth of inventory. In other words, all of the inventory currently held in the store would sell out 12 times a year. Each of the Walmart stores receives deliveries from suppliers several times a week. If Walmart changed the supply-chain mode of operation to effectively react to actual consumption (sales) through implementation of the TOC pull distribution application, shortages and surpluses would be significantly reduced. How much improvement is possible? Walmart could effectively reduce the inventory level to about 2 to 3 week’s worth, meaning inventory turns of 17 or higher.
Let’s now address sales per square foot. It would also improve dramatically as a result of reduced shortages and surpluses. A financial measure that provides a good indication of improvement in sales per square foot is the net profit to sales ratio. After D’Agostino’s supermarkets in New York implemented the TOC pull distribution application, its net profit to sales ratio increased from about 2 to 3% (the typical ratio in the grocery industry) to over 8% - almost quadrupling the ratio!
What could happen to the net profit to sales ratio of Walmart, which is currently 6%? Experience in implementing the TOC pull distribution application indicates that it is not uncommon for up to 30% of the items to be in shortage and 50% to be in surplus. If Walmart reduced both shortages and surpluses, the sales could easily increase by 10% or more. In 2010, its sales and operating income were $405B and $24B, respectively; the gross margin was 25%. If the sales increased by 10% and the costs were unchanged, the new ratio for 2011 would be almost 8% ((24 + 40.5*0.25)/445.5).
The result that can be achieved with the TOC pull distribution application is a substantial decrease in inventories coupled with a significant increase in availability and sales, in a matter of a few weeks. Since the shortages are of high runners, it is likely that the sales will be much higher when shortages are reduced because we cannot really know how much sales of high runners are lost when shortages occur. We will only know how much sales actually increase once the shortages are reduced. Reducing the surpluses decreases the level of investment needed in inventory. In addition, reducing surpluses frees up valuable shelf space for a larger variety of products to offer for sale. Thus, significantly reducing the surpluses and shortages dramatically improves the inventory turns, net profit, return on investment and cash flow.
To learn more about the TOC pull distribution solution, read my book chapter on Strategy and Tactic trees in the Theory of Constraints Handbook and the novel Isn’t it Obvious?, which is co-authored by Dr. Eli Goldratt, the founder of TOC.
Now that we agree on the measures, we can discuss how much potential for improvement exists. First, we need to understand that two major undesirable effects are blocking the ability of a retailer to significantly improve its performance: shortages and surpluses. Shortages occur when an item that is supposed to be on the shelf is out of stock. When there is a shortage, sales are being lost, although the amount of lost sales is unknown. Some customers will buy a different product (substitute), while others will choose not to buy or buy elsewhere. Surpluses occur when the level of inventory is too high. One effect of surpluses is blocked shelf space, which could be utilized to stock a larger variety of items to sell. The impact of both shortages and surpluses is detrimental to financial performance. What if we could find a way to dramatically reduce both shortages and surpluses? The result would be significantly improved performance.
Let’s begin by addressing inventory turns. Walmart, the world’s largest retailer, has on average about 12 inventory turns per year. This means that the stores are holding about 4 week’s worth of inventory. In other words, all of the inventory currently held in the store would sell out 12 times a year. Each of the Walmart stores receives deliveries from suppliers several times a week. If Walmart changed the supply-chain mode of operation to effectively react to actual consumption (sales) through implementation of the TOC pull distribution application, shortages and surpluses would be significantly reduced. How much improvement is possible? Walmart could effectively reduce the inventory level to about 2 to 3 week’s worth, meaning inventory turns of 17 or higher.
Let’s now address sales per square foot. It would also improve dramatically as a result of reduced shortages and surpluses. A financial measure that provides a good indication of improvement in sales per square foot is the net profit to sales ratio. After D’Agostino’s supermarkets in New York implemented the TOC pull distribution application, its net profit to sales ratio increased from about 2 to 3% (the typical ratio in the grocery industry) to over 8% - almost quadrupling the ratio!
What could happen to the net profit to sales ratio of Walmart, which is currently 6%? Experience in implementing the TOC pull distribution application indicates that it is not uncommon for up to 30% of the items to be in shortage and 50% to be in surplus. If Walmart reduced both shortages and surpluses, the sales could easily increase by 10% or more. In 2010, its sales and operating income were $405B and $24B, respectively; the gross margin was 25%. If the sales increased by 10% and the costs were unchanged, the new ratio for 2011 would be almost 8% ((24 + 40.5*0.25)/445.5).
The result that can be achieved with the TOC pull distribution application is a substantial decrease in inventories coupled with a significant increase in availability and sales, in a matter of a few weeks. Since the shortages are of high runners, it is likely that the sales will be much higher when shortages are reduced because we cannot really know how much sales of high runners are lost when shortages occur. We will only know how much sales actually increase once the shortages are reduced. Reducing the surpluses decreases the level of investment needed in inventory. In addition, reducing surpluses frees up valuable shelf space for a larger variety of products to offer for sale. Thus, significantly reducing the surpluses and shortages dramatically improves the inventory turns, net profit, return on investment and cash flow.
To learn more about the TOC pull distribution solution, read my book chapter on Strategy and Tactic trees in the Theory of Constraints Handbook and the novel Isn’t it Obvious?, which is co-authored by Dr. Eli Goldratt, the founder of TOC.
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