When you understand your goals and constraints on realizing the goal, resource allocation becomes much easier. The key question becomes how to use the constrained resource most effectively. How do you maximize the value of the throughput? High-quality decisions can be made using simple decision rules. In practice, you often need three types …
Organize Decisions Around Constrained Resources That Produce Goals
The resource that acts as the governing constraint (a physical or logical bottleneck) for a system limits the system’s ability to produce whatever it produces. The system cannot produce more than the governing constraint. Intuitively we don’t like governing constraints. Our normal reaction is to break them; to find some way to remove …
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Stop Generating Unproductive Complexity
Many resource allocation decisions are made necessary by poorly regulated workflows that saturate resources with work. When a system is saturated with work, every resource becomes a potential constraint on throughput. The saturated condition creates competition for the resource and the variability in the decisions about resource allocation …
Focus on Executability
Management teams are always asking for more money so they can get more done. And they think of money as the constraint on their ability to get things done. As a result, most resource allocation discussions become very money-centric. We create lists of potential projects and rank them based on their financials. However, money is rarely the scarce …
Validate that people understand your strategic priorities
People systematically overestimate their communication effectiveness and overestimate what other people understand, particularly people close to us. As a result, leaders of companies tend to overestimate how well their organizations understand strategic priories and the intent behind those priorities. Executive teams may strongly indicate …
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Concentrate Your Effort
Many companies spread their talent around, hoping that will improve the organization’s overall effectiveness. Unfortunately, that doesn’t work very well. Talented people are more productive, especially when it comes to getting complicated things done. Surveys by leading consulting firms show that high performers can be over nine times more …
Manage for the Win
If you’re not managing for the win, it’s hard to get a winning outcome. In competitive sports like baseball or football, it is clear what winning looks like. When it comes to strategy execution, the definition of winning can be more ambiguous. Does it mean growth, profitability, market share, or some other metric of success? Many companies …
7 Minutes of Wisdom From Jay Forrester
Forrester does a wonderful job of explaining the deep simplicity of systems, how this simplicity can produce powerful complexity, and the inherent challenge of leadership. "every system has in it, two concepts and only two. Now that may strike you as surprising. You may not believe it even after these lectures are over, but when you come to …
What Great Leadership Looks Like
In 2 amazing minutes, Steve Jobs reveals eight simple principles for running a great company. The Eight Principles: Organize like a startupEmpower leaders with clear & purposeful responsibilitiesFocus the top team on managing the "whole company"No delegation to committeesEffective teamwork based on deep trustLots of fast/frequent …
Marketing Is About Values
I recently watched a video of Steve Jobs talking about marketing. I pulled out a few excerpts to capture the essence of his talk. “… marketing's about values.This is a very complicated world. It's a very noisy world. And we're not going to get a chance to get people to remember much about us. No company is. And so we have to be really clear on …