Theory of Constraints: Focusing on “The Goal”
In our last post, we provided a book review on the business classic, “The Goal”. “The Goal” shares a fascinating story describing the power results utilizing the Theory of Constraints. Discovering bottlenecks. Road bumps. In other words, identifying exactly where the constraints live within a business that prevents the flow of production and positive cash flow.
Consequently, the Theory of Constraints can be applied to any business or industry. For example, companies that make a product or provide a service all suffer constraints and bottlenecks of some type.
Especially with manufacturing. Yet, the theory of constraints is also applicable to the service sector such as the medical field, doctor’s offices, restaurants, and entertainment.
Below offers an excellent explanation of the Theory of Constraints:
Self Inflicted Wounds
The key is identifying those dreaded constraints. In other words, the negative activities or processes within an organization that prevents a company goal from being met. Yet, discovering the sources of roadblocks and hurdles can be extremely challenging.
In many cases, inefficiencies and constraints are self inflicted.
In particular, when the constraint is a sacred cow. You know the type, “this is how we have always done it”.
Profit and cash flow are absolutely essential to achieving sustainability and company success. Therefore this is my “Captain Obvious” comment of the day.
Yet, many companies fail to achieve these goals. What gets in the way?
Lack of knowledge, lack of understanding, incompetence, fear of change or ego?
Could it be a deeper commitment to “this is how we have always done it” versus a relentless commitment to finding a better way?
The authors use “The Goal” to describe how to “explain their understanding of manufacturing” and why maximizing throughput is essential.
“The Goal” is about new global principles of manufacturing. However, even though the book was written 34 years ago, this concept is still new for many people.
Theory of Constraints Five Focusing Steps
Theory of Constraints offers practical and highly effective solutions to systematic problems.
Five Focusing Steps = POOGI = Process of On-Going Improvement:
- Identify the Constraint
- Exploit the Constraint
- Subordinate Everything to the Constraint
- Elevate the Constraint
- Prevent Inertia from Becoming the Constraint
Applying Theory of Constraints to Your Marketing Strategy
Let’s look at Theory of Constraints from a marketing stand point.
In particular, think about your sales lead process. Your web presence. Your internet marketing strategy.
Are there constraints that prevent you from maximizing your business opportunities?
What hurdles and road blocks do you and your company face with attracting new business?
If you are a digital immigrant (born before 1980), your constraint may simply being completely overwhelmed by the whole process.
Questions to ask yourself to identify constraints when it comes to marketing:
- Do you lack knowledge?
- Most likely you lack the experience?
- Where do you turn? Who do you trust?
- Aren’t Web designers and digital marketers extremely expensive?
- How can they possibly guarantee results?
- Do you make it easy as possible for customers to purchase from you?
- Do you offer easy access? Phone? Email? Social media? Are you hanging out online where your buyers are hanging out?
- Can a client easily submit a drawing or RFQ?
- Do you offer finished goods that can easily be purchased through an efficient eCommerce store?
If you do not have a proprietary product, can you turn your proprietary process into a proprietary product?
Make a commitment to enable your customer to engage with you as easily as possible.
Applying Theory of Constraints to Your Website
The Theory of Constraints can be applied to your website as well.
Hence, do you make it easy for a customer to navigate your website?
In addition, do you provide relevant and necessary information for a buyer?
In other words, does your website provide enough information that a customer could make a buying decision at midnight on a Friday night? Especially those obsessed entrepreneurs that just will not wait until Monday morning when you open. They need a decision NOW! They are trying to solve a problem and are looking for a partner at that moment.
Instead of trying to be everything to everyone, can you exploit your greatest strength?
Can you focus on what you do best instead of drifting into uncharted territory?
What if you attract more customers to buy what you do best?
For example, we had a customer who landed a brand new account. This new customer discovered her through her website.
The client lives in Europe. He was sitting with his spouse, pretending to be interested in the romantic comedy that she had selected for that evenings entertainment. He started searching for a new vendor while on his phone. Stumbled on our customer’s website that she had recently launched. A $400,000 order followed by being available on a late Friday night.
Eliminate those dreaded constraints that make it difficult to do business with you.
