Successful Organisations invariably know
the importance of prioritizing their actions to scale newer and newer heights
of success.
Mark Elliot
Zuckerberg- Co-founder of Facebook..
At every step of our day to day life, we are faced with a
number of choices, but the resources that we have at our disposal are never infinite.
The decisions we make and the choices we choose determine the road ahead and
lead to one’s success or failure.
Theory of
Constraints and Pareto’s Principle are some of the most authoritative works in
enabling an organization to prioritize their choices and undertake the best
course of action in a given situation.
DrEliyahu
Goldratt, the author of The
Goal, the proponent of Theory of Constraints (TOC) ,
and an
Einstein of Management theory &
practice, has once said, ‘If you want me to condense all of TOC into one word, it
would be FOCUS’.
But how do
you decide in a given situation, what to
focus on, because, focusing on everything is as good as focussing as nothing,
when you are faced with limited resources like time, money, people, place and
mindshare!
80:20 rule proved and propagated by Pareto is one of the greatest
insights that has attracted the attention of the mankind to the importance of
prioritization in choosing the right strategy to spend the organisational or
personal resources. It means, most of the time, 80% of the performance is
dictated by 20% of the variables and focussing our resources in improving the
performance associated with 20% of these variables will lead to a dramatic
improvement in the productivity levels and leads us closer to our success.
Some examples we encounter in our day to day life being: 80% of
the target market for our product or services could be found in 20% of the geographical area of operation or
80% of the sales coming from 20% of customers or 80% of the resources being
consumed in 20% of the activities in the list or 80% of the salary bill in an organisation
being consumed by 20% of the manpower or 80% of the expenses in an organisation
being accounted by 20% of the account heads and so-on.
By doing what should be done for sure and minimizing the efforts
on what need not be done, organisations could focus their efforts on 20% of the
variables and could dramatically improve their productivity, profitability and
hence performance levels..
Dr Eliyahu Godratt in his Theory of Constraints, has gone further
and discovered that in organisations, 0.1% of elements dictate 99% of the performance
due to the variability of and interdependencies between the numerous elements
that constitute the performance of an organisation.
These elements manifest themselves as bottlenecks, synonymous with
constraints limiting the performance of the system. Identifying these
constraints, prioritising this constraints in the order of priority to maximise throughput of
the system and enhancing the constraint performance step by step, one after
another, is a proven method to continuously improve the organizational
performance.
We all know that a chain is as strong as its weakest link.
Bolstering the rest of the chain while leaving the weakest link untouched, is a
sure way not only to waste resources, but also to get mislead into a false
sense of security..
Let's take the resources that
we have, and prioritize, and manage, and focus our energy on just doing things
that count - on real results…
Phil Bredesen
So next time, you are faced with a set
of options to choose from, you know what to do!
You could prioritize and choose the appropriate
actions in line with your overall goals and objective, visit TOC by Goldraitt
or call me at ms@mastermentors.in . My
be, we could help you. Please follow us @ http://www.linkedin.com/company/master-mentors-advisory-pvt-ltd
.
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