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MANAGEMENT
CONSTRAINTS
Removing constraints is a powerful way to improve performance
Constraints get in the way of success ... potential cannot be realized
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Impact of a Constraint
As far as I know, rather little has been written about the impact of a constraint or constraints. It does not seem to be a subject that has attracted much research at the well-known business schools, but this may simply because I do not know.
My experience suggests that understanding the impact of constraints and taking steps to remove constraints is one of the fastst ways to improve performance and get results. Put another way, investing in the removal of constraints is one of the most effective ways to achieve a high return on investment.
When I was working at Southern States Inc. in Georgia, I had a lot of success in improving the company's profitability without investing a whole lot of money.
At its core, my methodology was to identify the various issues that were limiting best possible performance. The machinery and equipment in the factory represented a very substantial financial investment, but when I first arrived in the company, giving no return on investment.
By spending a small amount of money to improve the flow of material to all the machines, the machines were able to produce much nearer to their potential than previously. This small investment in material flow made it possible for a very large investment already made to be far more efficient.
This idea has something in common with the 'triptab' idea described by Buckminster Fuller, where a small force applied in the right place, enables a much bigger force to be brought into play to do a very much bigger job. In turn, this builds on the concept of leverage.
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Constraints in International Development
In my work as a consultant for the World Bank, the United Nations and others, it was very apparent to me that the problem of development constraints was a major issue and a very big reason why development performance was unreasonably poor.
I thought this would have been obvious to anyone working in the field of development assistance, but I was wrong. This is probably because my training and experience was very different from most of the people who were working in this field and considered to be experts.
Difference Number 1
My university training was in engineering. Engineering is data driven, and it is usually pretty clear what works and what does not. In addition to my enginering training, I also studied economics at the university level. While economics is very interesting, to my mind, the link between the mathematical models and the empirical data was weak at best and a poor foundation for performance assessment. I was also trained as a Chartered Accountant, and learned how accountancy is used in the corporate setting to manage the optimization of profit performance.
In contrast many of the professionals working the the development organizations have a high level of education and research experience in academic economics. Very few of these academic economists have much if any experience in the technical aspects of the various sectors that make up the socio-enviro-economic system. To the extent there are accountants who work in development organizations, they are mainly pushed into the background to process accounting vouchers and little involved in anything to do with development management issues.
To the extent that there are other technical specialists they tend to function in specialized silos with relatively little interaction with the economists and policy makers. This latter issue is visible in the basic structure of the UN system, where there are a number of specialized agencies that engage in specific sectors of the global economy ... FAO for agriculture, WHO for health, UNIDO for industry, and so on.
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LINK
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Open file 9448
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