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What Are Your Constraints?

A few years ago a book changed my thinking about business in a way only one other author has managed to do. The first of these will be familiar to a lot of you, especially my clients, it is the E-Myth series. I’m not alone in having a light bulb moment with those books. The book I am talking about here though blew me away because it made me realize what was wrong with the systems I was fighting against every day.

The book was, I think, “The Goal” by Dr. Eliyahu M. Goldratt, and the light bulb wisdom was his “Theory of Constraints“. I say “I think” because I quickly read all of his books that I could lay my hands on.

You don’t need to read up on the theory as much as I did though. In a nutshell, quoting from Wikipedia …

every organization has – at any given point in time – at least one constraint which limits the system’s performance relative to its goal

Common sense, right? Well the trick is consciously looking for the constraint, finding the real constraint, then elevating the priority of the constraint in order to fix the problem. The solution is, again, forehead-slapingly simple.

0. (Step Zero) Articulate the goal of the organization.
1. Identify the constraint (the thing that prevents the organization from obtaining more of the goal)
2. Decide how to exploit the constraint (make sure the constraint is doing things that the constraint uniquely does, and not doing things that it should not do)
3. Subordinate all other processes to above decision (align all other processes to the decision made above)
4. Elevate the constraint (if required, permanently increase capacity of the constraint; “buy more”)
5. If, as a result of these steps, the constraint has moved, return to Step 1.Β 

Again, online marketing consulting clients who work with me will be familiar with these steps.

Very often clients are worried about traffic, or their web design. I will sit down with them or go over the issues via the telephone and we will realize web design or traffic is not their real problem relative to their goal.

Had they just fixed the symptom they identified they would be wasting their money, because the root cause is something else entirely. This is why system thinking is so important rather than reliance on tactic-du-jour.

Have you identified your constraints?

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Comments

  1. Hi Chris
    You have described a process that everyone should learn to use as it is one of the most powerful ways of achieving real improvements in all aspects of life. I was fortunate enough to be given the book by Eliyahu when he and I were keynote speakers at an ASTD conference in the US. I read the book and his other one on the theory of constraints with increasing awareness. Since then I have found many opportunities to apply and only wish I had know about the theory years earlier.
    It is really great to see just how focused and relevant your blogs are, keep up the good work.
    Tom

  2. Hi Chris
    You have described a process that everyone should learn to use as it is one of the most powerful ways of achieving real improvements in all aspects of life. I was fortunate enough to be given the book by Eliyahu when he and I were keynote speakers at an ASTD conference in the US. I read the book and his other one on the theory of constraints with increasing awareness. Since then I have found many opportunities to apply and only wish I had know about the theory years earlier.
    It is really great to see just how focused and relevant your blogs are, keep up the good work.
    Tom

  3. Oh wow, how great is it that you got given the book in person? I would love to meet him just to tell him how much his work impacted me.

    Constraints are a powerful idea to learn, they are like stealth-roadblocks, hidden bottlenecks and gritty sand in the bathing suit of your business, all in one πŸ™‚

    Until I looked back at Amazon, I forgot one thing – Not only is The Goal a great book for ideas, it is also a good story to read too πŸ™‚

  4. Oh wow, how great is it that you got given the book in person? I would love to meet him just to tell him how much his work impacted me.

    Constraints are a powerful idea to learn, they are like stealth-roadblocks, hidden bottlenecks and gritty sand in the bathing suit of your business, all in one πŸ™‚

    Until I looked back at Amazon, I forgot one thing – Not only is The Goal a great book for ideas, it is also a good story to read too πŸ™‚

  5. So what is the root cause if it is not design or traffic?

    Those 5 (well really it’s 6) steps sounded like complete mumbo jumbo to me. I didn’t understand them at all.
    Can you please repost them in terms normal people can understand?

  6. So what is the root cause if it is not design or traffic?

    Those 5 (well really it’s 6) steps sounded like complete mumbo jumbo to me. I didn’t understand them at all.
    Can you please repost them in terms normal people can understand?

  7. Chris,

    This process is the most essential tool to any business – and also the hardest to do!

    I am doing exercise #1 in your Authority Blogging course, which essentially is about articulating goals and constraints.

    Three things are needed, I’ve found to be able to really engage in this process effectively:

    1 – Value the payoff
    2 – Admit what’s hard to admit
    3 – Put it down for a few days to let things simmer

    John
    CorporateDollar.Org

  8. Chris,

    This process is the most essential tool to any business – and also the hardest to do!

    I am doing exercise #1 in your Authority Blogging course, which essentially is about articulating goals and constraints.

    Three things are needed, I’ve found to be able to really engage in this process effectively:

    1 – Value the payoff
    2 – Admit what’s hard to admit
    3 – Put it down for a few days to let things simmer

    John
    CorporateDollar.Org

  9. @Ryan – Perhaps I need to do a follow up article on this? It is a powerful idea once you get it, but can seem strange before you do.

    I’m sad to hear it “sounded like complete mumbo jumbo”. What you have to think about is what is REALLY holding you back. Where is the blockage? What do you really need more of.

    So in my clients case, often they think they need more traffic, when in fact they need more of the RIGHT traffic (ie. targeting is the constraint) – make sense? If all they do is add to the visitor count then they will just get more frustrated. It might even be cheaper and easier to target the correct people.

    Once they put a proper emphasis on where the real problem is, everything else just clicks into place.

    Where people people often fall down though is they think “job done”, where in actual fact that is just the start, because once you clear one bottleneck you need to then find the next one.

    @John – The admitting the hard truths is often the trickiest part. It’s a tough pill to swallow when you find out it is ourselves who are causing the biggest constraint πŸ˜‰

  10. @Ryan – Perhaps I need to do a follow up article on this? It is a powerful idea once you get it, but can seem strange before you do.

    I’m sad to hear it “sounded like complete mumbo jumbo”. What you have to think about is what is REALLY holding you back. Where is the blockage? What do you really need more of.

    So in my clients case, often they think they need more traffic, when in fact they need more of the RIGHT traffic (ie. targeting is the constraint) – make sense? If all they do is add to the visitor count then they will just get more frustrated. It might even be cheaper and easier to target the correct people.

    Once they put a proper emphasis on where the real problem is, everything else just clicks into place.

    Where people people often fall down though is they think “job done”, where in actual fact that is just the start, because once you clear one bottleneck you need to then find the next one.

    @John – The admitting the hard truths is often the trickiest part. It’s a tough pill to swallow when you find out it is ourselves who are causing the biggest constraint πŸ˜‰

  11. @Chris – The best thing about finding out that we’re causing the constraint is knowing that we can change it. If the constraint is the economy or a competitor (which it never really is anyhow), then we’re dead.

  12. @Chris – The best thing about finding out that we’re causing the constraint is knowing that we can change it. If the constraint is the economy or a competitor (which it never really is anyhow), then we’re dead.

  13. One of the most valuable real world type of advice and advocates of constraints is 37signals who have pretty much built their company off of this theory. Their blog Signal vs. Noise and the book ‘Getting Real” talk about many of their philosophy’s which are closely aligned to what you are speaking about.

    You should really check them out. http://www.37signals.com

    I am learning to embrace constraints and Chris I would love another article on this topic also. Maybe a few of the concepts in the book with you explaining their impact on your thinking. πŸ™‚

    Vicky H

  14. One of the most valuable real world type of advice and advocates of constraints is 37signals who have pretty much built their company off of this theory. Their blog Signal vs. Noise and the book ‘Getting Real” talk about many of their philosophy’s which are closely aligned to what you are speaking about.

    You should really check them out. http://www.37signals.com

    I am learning to embrace constraints and Chris I would love another article on this topic also. Maybe a few of the concepts in the book with you explaining their impact on your thinking. πŸ™‚

    Vicky H

  15. @John – Good point πŸ™‚ Yes, if it is inside us that is holding things back at least we have direct access to the problem area. It’s a strange thing about the economy, on the one hand of course it affects us, on the other, there were millionaires made even in the depression. Money is like energy, it is neither created nor destroyed, just transferred or transformed. I guess if you work from that point of view, any market has a potential if you look hard enough πŸ™‚

    @Vicky – The signals folks are top notch, and I know it’s one of your favorites for good reason Vicky πŸ™‚ If you would like to see more about this then I will certainly return to this topic, I think it’s an important concept.

  16. @John – Good point πŸ™‚ Yes, if it is inside us that is holding things back at least we have direct access to the problem area. It’s a strange thing about the economy, on the one hand of course it affects us, on the other, there were millionaires made even in the depression. Money is like energy, it is neither created nor destroyed, just transferred or transformed. I guess if you work from that point of view, any market has a potential if you look hard enough πŸ™‚

    @Vicky – The signals folks are top notch, and I know it’s one of your favorites for good reason Vicky πŸ™‚ If you would like to see more about this then I will certainly return to this topic, I think it’s an important concept.

  17. I read Schefren’s latest Internet Manifesto report and (I know this is going to sound like one of those awful gushy testimonials, but I swear this is the truth) it changed my life.

    I have never read anything that had that much of an impact on what I was doing and how I was doing it. Some of you who read Remarkablogger may have noticed that I’ve changed my services and wrote an entire week’s worth of “manifesto” posts. Schefren’s report is a big part of the reason why, so you can see this is not just hot air. It really did change my life, and I think everyone who is serious about internet business should read it.

    I have never read the E-Myth, but damn, I sure keep seeing it crop up everywhere! Clearly, I am missing something that has become an important part of the business landscape. I had better get on that.

  18. I read Schefren’s latest Internet Manifesto report and (I know this is going to sound like one of those awful gushy testimonials, but I swear this is the truth) it changed my life.

    I have never read anything that had that much of an impact on what I was doing and how I was doing it. Some of you who read Remarkablogger may have noticed that I’ve changed my services and wrote an entire week’s worth of “manifesto” posts. Schefren’s report is a big part of the reason why, so you can see this is not just hot air. It really did change my life, and I think everyone who is serious about internet business should read it.

    I have never read the E-Myth, but damn, I sure keep seeing it crop up everywhere! Clearly, I am missing something that has become an important part of the business landscape. I had better get on that.

  19. Michael,

    I’m sold. Just downloaded the Manifesto – only 15 pages (doublesided).

    Thanks,

    John

  20. Michael,

    I’m sold. Just downloaded the Manifesto – only 15 pages (doublesided).

    Thanks,

    John

  21. I certainly agree that systems thinking is very useful.

    Unfortunately all those diagrams in Rich’s report are entirely linear. He doesn’t seem to understand systems thinking – diagnosis and prescription are linear processes: incredibly useful but not systems thinking.

    The big question left by your post Chris is: how? How are people to know what the problem is? A follow-up post (or several) on this would be excellent.

  22. I certainly agree that systems thinking is very useful.

    Unfortunately all those diagrams in Rich’s report are entirely linear. He doesn’t seem to understand systems thinking – diagnosis and prescription are linear processes: incredibly useful but not systems thinking.

    The big question left by your post Chris is: how? How are people to know what the problem is? A follow-up post (or several) on this would be excellent.

  23. Nice one! It’s something that I have to work on every day, considering that I’m a consultant in a lot of industries. Just want to share some information, though. I think one of the biggest constraints of businesses is their leads. Without a proper system, they may always end up calling and transacting business with those that are not really interested in their product at all. A good example are the education leads. Schools right now don’t really know how to profile students based on the curricula that they have.

  24. Nice one! It’s something that I have to work on every day, considering that I’m a consultant in a lot of industries. Just want to share some information, though. I think one of the biggest constraints of businesses is their leads. Without a proper system, they may always end up calling and transacting business with those that are not really interested in their product at all. A good example are the education leads. Schools right now don’t really know how to profile students based on the curricula that they have.

  25. Perry,

    I do sales / marketing consulting with non-profits and have experienced the same issue – it’s very common!

    The real constraint in your example is the school’s “sales process” – their ability to quickly identify the potential of each lead.

    In the end, no one has control over lead quality. But, everyone has control over their ability to filter out and disqualify leads.

    Thoughts?

    John
    CorporateDollar.Org

  26. Perry,

    I do sales / marketing consulting with non-profits and have experienced the same issue – it’s very common!

    The real constraint in your example is the school’s “sales process” – their ability to quickly identify the potential of each lead.

    In the end, no one has control over lead quality. But, everyone has control over their ability to filter out and disqualify leads.

    Thoughts?

    John
    CorporateDollar.Org

  27. Great post! I’m new to your blog, but I’m happy to see you talking about Theory of Constraints (TOC). I had an experience similar to yours where I read the goal back in 2001 and then caught fire and read about 20 books on TOC over the next 12 months, got my Jonah Certification and have been practicing TOC in everything I do since — even internet marketing which is where I’m at now. Some aspect of marketing is so often the current constraint for people — especially in tough economic times when they often have excess capacity — so there’s a lot we marketers can do to help. Ironically, *marketing* is typically still the marketers constraint as well.

  28. Great post! I’m new to your blog, but I’m happy to see you talking about Theory of Constraints (TOC). I had an experience similar to yours where I read the goal back in 2001 and then caught fire and read about 20 books on TOC over the next 12 months, got my Jonah Certification and have been practicing TOC in everything I do since — even internet marketing which is where I’m at now. Some aspect of marketing is so often the current constraint for people — especially in tough economic times when they often have excess capacity — so there’s a lot we marketers can do to help. Ironically, *marketing* is typically still the marketers constraint as well.

  29. Another great post Chris. I stumbled it and included it in my Get International Clients Sunday Blog Carnival

  30. Another great post Chris. I stumbled it and included it in my Get International Clients Sunday Blog Carnival

  31. Chris,

    I’ve done some thought on my constraints lately and have reset my priorities accordingly. So this post is timely for me.

    I also liked your reply to Ryan about not targeting a market as a constraint. It seems that all the successful Internet business owners say to do it, but surprisingly some still don’t.

    I’ve developed a FREE tool to help. It provides characteristics and best appeals by target market demographics. I’ve linked to it.

  32. Chris,

    I’ve done some thought on my constraints lately and have reset my priorities accordingly. So this post is timely for me.

    I also liked your reply to Ryan about not targeting a market as a constraint. It seems that all the successful Internet business owners say to do it, but surprisingly some still don’t.

    I’ve developed a FREE tool to help. It provides characteristics and best appeals by target market demographics. I’ve linked to it.

  33. What’s really fascinating about this for me is that the constraints really only exist in one place: our minds. We allowed the constraints to exist in the first place, and we failed to see them until something brought them to light. I think the best way to recognize constraints is to get the help of others who have already been where we are now and who can mentor us.

  34. What’s really fascinating about this for me is that the constraints really only exist in one place: our minds. We allowed the constraints to exist in the first place, and we failed to see them until something brought them to light. I think the best way to recognize constraints is to get the help of others who have already been where we are now and who can mentor us.

  35. Hey Chris,

    guess what I just got in my mail box…The Theory of Constraints.

    I have had this on my wish list for months, since before summer…and kept putting off ordering it because I wanted lighter reads out in the sun.

    A quick flip through the book and I realize it is going to be a lot easier to read than I thought.

    Can’t wait to see how I can apply this to cross-cultural communication.

    My eye already caught one quote “as long as we think that we already know, we don’t bother to re-think the situation”
    – this is probably the first reason behind so many cultural blunders in the first place…and what I continually try to get people to understand on my blog.

  36. Hey Chris,

    guess what I just got in my mail box…The Theory of Constraints.

    I have had this on my wish list for months, since before summer…and kept putting off ordering it because I wanted lighter reads out in the sun.

    A quick flip through the book and I realize it is going to be a lot easier to read than I thought.

    Can’t wait to see how I can apply this to cross-cultural communication.

    My eye already caught one quote “as long as we think that we already know, we don’t bother to re-think the situation”
    – this is probably the first reason behind so many cultural blunders in the first place…and what I continually try to get people to understand on my blog.

  37. Great tip, I have had the goal on my book wishlist for a while, but it appears I should read it now.

    Heading over to B&N shortly. Any other tips of must-reads I should take home?

  38. Great tip, I have had the goal on my book wishlist for a while, but it appears I should read it now.

    Heading over to B&N shortly. Any other tips of must-reads I should take home?