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Today the guys talk about the 5 steps than help you focus to shake off constraints in life.
Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
And welcome to Essential Dynamics with Derek Hudson, a podcast in pursuit of clearer thinking. I'm Reed McColm, sitting here with Derek Hudson, who is a deep thinker who helps CEOs work through their trickiest opportunities. I'm delighted to see you again. Derek, as we zoom through the skies for this podcast, we're under the circumstances that we are. We have to we have to be a part, but we're together in spirit.
Derek:Is that not true? Oh, we we certainly are together in spirit, Reed. And I think Zoom is the both the noun and the verb for twenty twenty. So glad to be Zooming with you today. Okay.
Reed:Well, I'm anxious to get started because in a in a in previous podcasts, you've mentioned several words and and lingo that I want to explore further. Some of that, I'm very interested in constraints and drivers that you've mentioned. But first, tell me, define essential dynamics. So essential dynamics starts out with the idea that a lot of things that we do in our life that are meaningful or important or that can be meaningful or important are along the lines of an adventure or a quest. Okay.
Reed:And a quest has, in my mind, three essential elements. First of all, there's some purpose, some challenge or problem that we're trying to overcome or accomplish. The second is the people involved. And the third is the path or the way that we solve the problem. And this all came from my work in trying to understand how business model of an organization might operate, where the path is the systems and the processes that the organization used to accomplish its purpose with the people that it has.
Reed:So that's the essential elements. The dynamic part of essential dynamics is my belief that everything is subject to these opposing forces, the yin and yang of the universe as it were, and that we can look at the opposing forces that impact people, path, and purpose separately and break that down. And so for the path side, for systems and processes, in my mind, the opposing forces can be considered the drivers and the constraints. The drivers are those compelling things that move us towards our purpose, and the constraints are the things that that hold us back from accomplishing our purpose. The hurdles.
Reed:Yeah. If there were no constraints, then we would have an infinite number of all the good things that we want. Okay. So what is a constraint? It's a hurdle.
Reed:It's a it's an opposition. A a restraint, a stopper in game show turns turns. And and if you think about manufacturing and processes like that, sometimes we talk about a bottleneck. Okay. I like that.
Reed:Yeah. So what's what's the story behind the name of your company? So my company is called Unconstrained CFO Incorporated, and I incorporated it ten years ago just after I left MicroLine. And I was chief chief financial officer of MicroLine for thirteen and a half years, and then we had a a management shakeup and our CEO left, and a new CEO came in. And we weren't gonna be end up working together.
Reed:So I was unconstrained. Ah, you were you were free to to roam the earth. I was freed up. And at the same time, I had been studying for many years the theory of constraints. Used it a lot in the work at MicroLine.
Reed:And in fact, I learned about the theory of constraints because one of our customers back in when I first joined 1997 had provided a book to our company and said everyone has to read this book. And the book is called the goal, and it's by Eliyahu Goldrath, who was a physicist who started studying management problems, particularly production problems, and came up with the theory of constraints. And so to explain the theory of constraints, he wrote a book called The Goal, which is a novel about a guy who's the manager of a plant, you know, a manufacturing plant in trouble. Okay. So the goal is fantastic business book, and I recommend that everyone read it.
Reed:But I have a story about how I really learned about the stuff that's in the goal, and I'm gonna tell I'm gonna tell it now whether you're asking to or not. Would you please tell that story, Gary? Glad you asked, Reed. So 1997, I I've just started at MicroLine, and I'm partway through reading the goal. And in the book, there is this plant manager, and his plant's in trouble, and the and the company's gonna shut it down if it doesn't turn around.
Reed:And this guy remembers that he used he had one professor in his business school that seemed to get stuff like this. So he chases him down, finds out that he's a very, very busy and important consultant who doesn't have time to talk to him, but would would meet with him while he was changing flights in an airport. And so there's so the story goes that he flies to different places in The United States and meets with this guy in an airport. And then the guy just asked him questions. Doesn't ever tell him to you.
Reed:Okay. Yeah. I got it. Doesn't doesn't ever tell him anything. And then he sends them back to Ponder.
Reed:So he's trying to figure out why all this work that they do to get the efficiency up in their machines isn't producing more product out the door. Now that sounds like a boring story for this podcast, but let me personalize it. In his story, he talks about and this guy is gonna go to the plant one morning to on a Saturday to figure all this out, and his son bursts into his his bedroom at seven in morning and says, hey. Don't you don't you remember you're taking the scouts on a hike? So he goes with his son to this hike.
Reed:None of the other leaders show up. He's the only adult with 10 boys. And they're going on a 10 mile hike in an overnight backpack, and and off they go. And what he finds out is not all the kids hike at the same rate. Of course.
Reed:I remember that when we went on hikes as kids. So I'm about there in the story, and I happen to be heading off on a backpacking trip with Scouts. Oh, really? To to Bird Bird Lake in Mount Robson Provincial Park with with my friend Jim and five, I think, five boys. And so we're at the trailhead at the at the Car Camping Campground ready to head in the next day.
Reed:And I'm telling Jim about this book. I'm reading that. And I said, Jim, so this is what's gonna happen. We're gonna start hiking up the trail, and some of kids are gonna be really fast, and we're not like, we're gonna lose them. And there's a few of the kids that's gonna be really slow.
Reed:I think it's gonna be this kid or that kid. And the slowest one is gonna like, we can't leave him behind, and he's gonna dictate how fast we can get up the trail. So what we're gonna do is once we figure out who who's where in the order, we're gonna make them all stop just like the guy did in the book, and we're gonna reverse the order. We're gonna put the smoke at the front. Ah.
Reed:And in the book, that that kid is Herbie. My kids inappropriately called the kid the fat cub. But, anyway I know it's Herbie as a kid. I have to say, I think I think I had but I've changed my name. So okay.
Reed:So so we had that kid, and his back was too heavy, and he wasn't in good shape. And when we put him in front, two things happened. One is no one if no one passed him, then they all stayed together because everyone could walk faster than the kid in front. Yeah. But then the other thing which doesn't happen in the manufacturing situation is that the kid in the front feels some sense of responsibility and actually walks faster.
Reed:Yes. Yes. But then someone else starts to drag. Right. And so they Changes.
Reed:The the dynamic changes. Yeah. So they become the constraint. And so because I had this visual and I played with it, and I on the way back down, the two super athletic boys, if they're listening, it was Matt and Zach. But, anyway, they're like, how come we can never be in front?
Reed:How can we never be in front? And I said, because we'll never see you guys again. They said, no. No. No.
Reed:No. We'll we'll make sure the guys are right behind us. And so they will. Yeah. Yeah.
Reed:On the way out, we let them go. And with, like, eight kilometers to go or something like that. And the next time we saw them was at the car, and they waited for an hour for it. You know? Of course, they did.
Reed:Yeah. Yeah. So, anyway, I learned this. Go ahead. No.
Reed:No. I just I just wanted to remind people this is Essential Dynamics with Derek Hudson. I'm Reed McCollum, and Derek is the one who is on the camp with the scouts. I am way behind, lagging. Check us out online at DerekHudson.ca.
Reed:And, Derek, please tell us how that story ended. So so, anyway, I learned about the theory of constraints by changing the order of who hiked on the trail while the book was explaining how the the plant manager, learned about that by changing how the boys hiked on the trail. So it felt like a real deep connection to the principle. So I was able to, a couple of times, go to courses where doctor Goldratt spoke and ended up spending a week in Tel Aviv at the Goldratt house learning about this stuff. Really?
Reed:How interesting. Doctor Goldratt didn't wasn't an instructor, but he came in every day at the end. And he came in every day at the end and just just talked and answered questions and rambled on. It was fantastic experience. We went out for dinner as a group one night, ended up sitting by him.
Reed:So I told him the story that that I just I just told you. Yeah. I said, I gotta tell you. This is how I learned about your stuff. And he said Oh, you have a you replicated it in real life.
Reed:Yeah. I got it. He said he said, that's fantastic. He said, but you have to know that I lived that experience too, but it was in the Israeli army. Oh, really?
Reed:Yeah. And he said that I had to change it to scout so that it was, like, you know, a little less, yeah, a little more universal, a little less, you know, elitist or whatever. So I thought that was it was super cool that I had that experience. Then years later, I was able to share it with him. Doctor Goldarak passed away in 02/2011, so not very long after I was able to see him there.
Reed:And he's left a huge legacy in this in this body of work called the theory of constraints. Well, okay. Now I wanna know how the the theory of constraints works in application. Are you talking about opposition? Are you talking about is there deliberate opposition?
Reed:Is there deliberate stoppages in in what if there's a I I what I'm trying to get to is in business, if there's somebody trying to sabotage the business, just like you're sabotaging the hype. Right? The how do you put the weak man up front? How do you put the weak man up front? Well, Goldratch solution is sometimes the weak man can't be the first step in the process, but you use the using the slowest point of the process to set the rhythm for everything.
Reed:Okay. He calls that the drum. So if if the big machine in the middle can do three parts a day, no one else makes more than three parts a day. I see. And and although you wanna protect the capacity of the thing that makes three parts a day, so you always have some port to work on, a little bit of a buffer in case something goes down up the line.
Reed:So there's a lot of stuff that he that he figured out. But one of the the key things is that the the theory talks about inherent simplicity, that when you understand these complex processes, because typically there's only one constraint that drives everything, if you can manage that constraint, you can manage a complex process. One of the challenges you have is when the constraint moves around a lot, you can't do that. So good organizations, either explicitly following a clear constraints or or they might stumble into it, is you figure out what you want your constraint to be, and that becomes your control point. You could you figure out what your you want the constraint to be?
Reed:That's right. I've been I've been assuming to this point that constraints happen regardless. So I'll just I'll just give one example. Boeing. When you order a plane from Boeing, they tell you when every week.
Reed:Yes. Yes. They tell you when they will deliver it. Oh, they can't come in and say I want it by July 1. Right.
Reed:They say we will give that to you in five years. Right. And they manage their business on the constraints of their manufacturing because it's so expensive to make planes. I see. When you go into a fast food restaurant Yeah.
Reed:And they told me I I can have it in five years. I'm not coming back. That's right. That's right. They're waiting for you, and then they'll you're the constraint.
Reed:They're they only do as much business as people come in the store. So so using constraint as a control point means the constraints aren't necessarily bad. It's just that you manage. You manage to them. You figure out what it is that you how you wanna run your business.
Reed:And then when you have a single control point, it's so much easier. And that's that's the same in, you know, applications outside of business as well. So the theory of constraints has been, you know, sort of burned deep into my way of thinking, but it's not in my mind, it's it doesn't describe everything that we need. And so that's one of the ways that I got to this broader view of essential dynamics. But I cert I certainly have seen many examples of theory constraints.
Reed:I think I have time for one more. I use this one a lot. The baked potato station in a buffet line. Okay. So think about it.
Reed:Potato section where people always stall in order to put their bacon bits and butter and sour cream on. Okay? And they're and they're cutting it in the foil, and then they're, like, you know, got it in the right order and all that kind of stuff. Yeah. On before the sour cream.
Reed:I got it. Yeah. Every other station, you just swap the the mac and cheese or the brisket or whatever on your plate and move on. So so the solution is put it off on an all the condiments on the side table. Right?
Reed:Like Yeah. Get them to a different line. Get them out of the line. So, anyway, I just I just love that. And one of the cool things about working at Edmonton Economic Development and being responsible for the convention center and the expo center is they these guys know how to do buffet line.
Reed:So we spoke the same language. Oh, that's great. You're listening to Essential Dynamics with Derek Hudson. I'm Reed McCollum. Again, check us out online at derekhudson.ca, and you'll have a you'll have a good time looking at Derek's website as well.
Reed:Now, Derek, I just how does this get us to simplicity? Like I said, we tend to really make our lives far more complex than they need to be. And part of it is that we look at the various steps in a process, and we try to optimize each one. And Each step. Each step.
Reed:And if you get a job in a company, you say, well, if I just do my job really well, then I don't care about the rest. But really, we need to take the view of a broader system. And in a broad system, there's only one constraint. And if we understand because I broader the system, it seems to me there would be more constraints or more But there's trip ups. There's one limiting factor.
Reed:If you improve everything else and you don't improve that limiting factor, you get no more production. I get it. I get it. So if you make it way easier to dish up the salad because it's prepackaged on the buffet line, and then I get to the baked potato station, I'm not moving any fast. I see.
Reed:So you don't have to fix everything. You only have to, like, deal with the constraint. I I so appreciate what you're saying, Derek. It's you make it much clearer. I appreciate your stories.
Reed:I think that's that's close to all the time we have today. I you can email our us with your feedback at, again, Derek Hudson dot c a, and Derek is d e r e k. You'll want to talk to Derek personally. I'm sure you can arrange that on the on the website. I'm Reed McCollum.
Reed:You don't wanna talk to me. Derek, I only have one question for you now. Does this podcast make me look fat? Thank you for your time. Thank you for talking to us, Derek, and and until next time.
Reed:Consider your quest.