A Guide to Implementing the Theory of Constraints (TOC)

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Why The OODA Loop?

Why include discussion on the OODA Loop?  Well, because the OODA Loop, or Boyd Cycle, is conceptually a very important part of what we are trying to achieve.  Likewise, Nonaka and Takeuchi’s recognition of the role of both tacit and explicit knowledge is conceptually important.  Senge’s recognition of leverage and detail/dynamic complexity is also conceptually important.  We need these concepts to enrich and to better appreciate both how we can apply the Theory of Constraints, and the implications of that usage.

We have used the cloud to suggest that a “looping” type decision structure can be constructed using Theory of Constraints Thinking Process tools, and yet our intuition tells us that even if we formalize the process as such, in reality we think in a far more massively parallel and messy way than this.  We need to look at the OODA Loop to better appreciate this messiness before returning once more to the implications of Theory of Constraints.

Let’s have a look then at this concept – the OODA Loop – the Boyd Cycle.

 
OODA Is Not A Loop!

The OODA Loop is not a loop (1).  That came as quite a shock.  Maybe I have been reading with my eyes closed.  Time for one of those reality checks.  Maybe we are all too familiar with the concept of the Shewhart cycle that Deming taught (2).  Or too familiar with one of the many derivatives – such as the plan-do-check-act or PDCA cycle of TQM.

Let’s draw the OODA Loop and examine it in more detail.  That way we can be sure that we won’t continue to build on previous errors.

The OODA Loop consists of 4 steps or stages; observe, orient, decide, and act.  If we look at the feed forward from observe to orient to decide to act, and then the feedback from act to observe again, it is quite easy to deduce a simple loop.  But what about all of those other arrows?  Every step forward has a direct feedback.  The orient step itself has 10 interconnections within it, some are single ended arrows, but most are double ended arrows.  Clearly this isn’t a simple looping structure.  However, perhaps the most important connections of all are the two “implicit guidance and control” arrows that both feedback from orient into observe and feed forward from orient into action.  I have highlighted these in another color, we will return to these connections soon.  First, however, let’s consider the role of feedback.

 
Feedback

Do you remember the short discussion on feedback in the page on people?  Margaret Wheatley characterized feedback in a system in number of ways (3).  Let’s list them again here.

(1)  Feedback is self-generated, an individual or system notices whatever they determine is important for them and they ignore everything else.

(2)  Feedback depends upon the context, the critical information is being generated right now, failing to notice the "now," or staying stuck in past assumptions, is very dangerous.

(3)  Feedback changes; what an individual or system chooses to notice will change depending on the past, the present, and the future.

(4)  New and surprising information can get in, the boundaries are permeable.

(5)  Feedback is life-sustaining, it provides essential information about how to maintain one's existence, it also indicates when adaptation and growth are necessary.

Wheatley’s characterization of feedback meshes pretty well with the OODA Loop.  We notice (observe) whatever is important (orient) and ignore everything else.  Feedback depends upon the context (orientation).  Feedback changes (unfolding circumstance and unfolding interaction with environment).  The boundaries are permeable (outside information).  It provides essential information (decision), it indicates when adaption and growth are necessary (action).

Feedback is absolutely essential.  However, we observe feedback and new information through a lens, the lens of our own prior orientation, and sometimes there is a gap between observation and our prior orientation.  One of the best illustrations of the gap between observation and orientation comes from Thomas Kuhn’s description of the discovery of Uranus.  We can learn a lot from this simple example.

“On at least seventeen different occasions between 1690 and 1781, a number of astronomers, including several of Europe's most eminent observers, had seen a star in positions that we now suppose must have been occupied at the time by Uranus.  One of the best observers in this group had actually seen the star on four successive nights in 1769 without noting the motion that could have suggested another identification.  Herschel, when he first observed the same object twelve years later, did so with a much improved telescope of his own manufacture.  As a result, he was able to notice an apparent disk-size that was at least very unusual for stars.  Something was awry, and he therefore postponed identification pending further scrutiny.  That scrutiny disclosed Uranus' motion among the stars, and Herschel therefore announced that he had seen a new comet!  Only several months later, after fruitless attempts to fit the observed motion to a cometary orbit, did Lexell suggest that the orbit was probably planetary.  When that suggestion was accepted, there were several fewer stars, and one more planet in the world of professional astronomy.  A celestial body that had been observed off and on for almost a century was seen differently after 1781 because...., it could no longer be fitted to the perceptual categories (star or comet) provided by the paradigm that had previously prevailed (4).”

Thus although feedback and observation functioned perfectly in this example (all the evidence was there) it took some time for the correct orientation to develop (for new information to leak in) and allow for the full recognition of the observed phenomena.  The awareness of mismatches, of gaps, is an important part of Boyd’s approach.  Sometimes, however, we are not fully aware of the mismatches due to our own orientation.  The orientation stage (the big “O”) of OODA is far more important than we might first conceive.

 
The Big “O” – Orientation

Boyd explained the orientation stage as follows (5);

“Without our genetic heritage, cultural traditions, and previous experiences, we do not possess an implicit repertoire of psychophysical skills shaped by environments and changes that have been previously experienced.

Without analysis and synthesis, across a variety of domains or across a variety of competing independent channels of information, we cannot evolve new repertoires to deal with unfamiliar phenomena or unforeseen change.

Without a many-sided implicit cross-referencing process of projection, empathy, correlation, and rejection (across many different domains or channels of information), we cannot even do analysis and synthesis.

Without OODA loops, we can neither sense, hence observe, thereby collect a variety of information for the above processes, nor decide as well as implement actions in accord with those processes.

Or put another way, without OODA loops embracing all the above and without the ability to get inside other OODA loops (or other environments), we will find it impossible to comprehend, shape, adapt to, and in turn be shaped by an unfolding, evolving reality that is uncertain, ever-changing, and unpredictable.”

Orientation is; the worldview, the schemata, the mental models, the views of reality, the insights, intuitions, hunches, beliefs and perceptions of the various participants.  We create working models of the world by making and manipulating analogies in our minds.  With these working models we perceive and define our world (6).  They are our maps of reality – and they are implicit.

It is the implicit nature of the OODA Loop that is not well understood.

 
Implicit Guidance And Control

Robert Coram expresses the confusion the arises between the explicit and implicit states of OODA best (1); “The OODA Loop is often seen as a simple one-dimensional cycle, where one observes what the enemy is doing, becomes oriented to the enemy action, makes a decision, and then takes an action.  This "dumbing down" of a highly complex concept is especially prevalent in the military, where only the explicit part of the Loop is understood.  The military believes speed is the most important element of the cycle, that whoever can go through the cycle fastest will prevail.  It is true that speed is crucial, but not the speed of simply cycling through the Loop.  By simplifying the cycle in this way, the military can make computer models.  But computer models do not take into account the single most important part of the cycle ‑ the orientation phase, especially the implicit part of the orientation phase.”

Thus we come back to the two “implicit guidance and control” arrows that we mentioned earlier.  Let’s return to Robert Coram once again (1).  “Note that Boyd includes the ‘Implicit Guidance & Control’ from ‘Orientation’ with both ‘Observations’ and ‘Action.’  This is his way of pointing out that when one has developed the proper Fingerspitzengefuhl [ fingertip feel ] for a changing situation, the tempo picks up and it seems one is then able to bypass the explicit ‘Orientation’ and ‘Decision’ part of the Loop, to ‘Observe’ and ‘Act’ almost simultaneously.  The speed must come from a deep intuitive understanding of one's relationship to the rapidly changing environment.  This is what enables a commander seemingly to bypass parts of the Loop.  It is this adaptability that gives the OODA Loop its awesome power.”

Thus we can see that the OODA Loop, at one level, might be interpreted as an iterative explicit loop.  But it is also a model of our implicit non-linear reaction to circumstances once the reaction has been learnt.  The OODA Loop is both a model of the context of discovery and the context of justification.  We will return to these two concepts shortly.  First, however, lets consider a little more the implications of orientation – especially where the orientation worldview differs not on aspects of detail complexity, but rather on aspects of dynamic complexity.

 
Attrition Warfare / Maneuver Warfare

Imagine, as an example, if your opponent’s world view is attrition warfare, and yours is maneuver warfare (7).  They use a hierarchy of standardized massed forces, massive fire-power, well supplied, and under centralized command and control.  You use a network of adaptive, innovative, fast and deadly mobile forces, under decentralized leadership designed around initiative and trust.  You probe and push looking for areas of weakness in your opponent’s plan to either exploit or utilize to sow confusion.  Which do you think is the more likely to win?

Imagine now if you could teach, as Boyd did, the underlying principles of dog-fights to any fighter pilot – not just to those for whom it is already intuitive.  What if you could teach the underlying dynamic of energy maneuverability so that every pilot knows not only the principles for successfully completing a dog-fight once engaged, but also when and where and if to successfully engage each opponent in the first instance.  Imagine if your pilots have absorbed that skill and your opponent’s pilots don’t have that skill?

Hold onto these thoughts for a moment.

 
Cost World / Throughput World

We haven’t really used the terms “cost world” and “throughput world” in these pages although they occur from time to time in the Theory of Constraints literature.  Goldratt calls the world of management decisions that are based upon product cost considerations the “cost world.”  The cost world is pre-occupied with operating expense and independence (8).  In contrast Goldratt calls the world of management decisions that are based upon throughput considerations the “throughput world.”  The throughput world is pre-occupied with throughput and dependence (8).  We have used other terms in these pages – the reductionist/local optima approach and the systemic/global optimum approach – in almost the same way as cost world and throughput world if only to broaden their impact beyond financial considerations.

Imagine then if your opponent’s world view is the cost world, and yours is the throughput world.  They believe in product cost, product profit, local optimization, local safety, independency, efficiency, variance reporting and centralized command and control.  You know only process profit, throughput, system dependency, constraints and non-constraints, global safety, effectiveness, decentralized alignment and leadership around the system’s goal.  You probe and push looking for areas of weakness in your opponent’s commercial activities to either exploit or utilize to sow confusion.  Which do you think is the more likely to win?

Imagine now if you could teach the underlying principles of systemic production management or replenishment management or project management to anybody – not just to those for whom it is intuitive.  What if you could teach the underlying dynamic of exploitation and subordination so that everybody knows not only the principles for successfully completing a competitive job once engaged, but also when and where and if to successfully engage the competition in the first instance.  Imagine if your people have absorbed those skills and your opponent’s people don’t have those skills?

Does this help you to understand that when Boyd talks of operating inside someone’s decision cycle, it is not your ability to “do the thing right” quicker and more frequently that the opponent, it is the ability to “do the right thing.”  That is really what operating inside someone else’s decision cycle is all about.  And until the systemic/global optimum approach is better known then the competitive advantage of using it is very strong indeed.  Let’s have a look at a simple military analogy;

“Razz had his work cut out.  Then he remembered the maneuver John Boyd taught at the FWS, the one that had so astonished him with its elegant simplicity: the roll to the outside in order to gain the tactical advantage.  It was a maneuver contrary to everything a fighter pilot thought he knew about aerial combat, but a maneuver that put a pilot tight in on his adversary’s six…”

“Razz briefed more than sixty pilots in the wing.  And after every mission up North, he had pilots practice the maneuver on the way back to Ubon.  Again and again they practiced.”

“January 2, 1967, was the greatest day the Air Force had during the Vietnam War.  Bolo went into the history books.  But what Razz remembers is that six of the seven kills that day were done by pilots who used John Boyd’s outside roll at some point in the engagement (9).”

Do you think those pilot’s in the middle of a dog-fight made a conscious step-wise evaluation of what to do next?  I don’t think so, it was implicit, sub-conscious, an auto-reflex based upon learning and then practice, practice, and more practice.  That this was the “right thing to do” had been decided a long time ago.  And “doing it right” was automatic.  In execution, it was hardly a decision loop at all.

 
Decision Loops

So maybe the model that was presented to explain the “loopability” of the Thinking Process tools is wrong.  It was a simple model of a cyclic decision loop.  Let’s draw it again.

Well, I don’t think that it is entirely wrong.  But to better understand the situation we must turn to the late Harvard paleontologist and evolutionary biologist Stephen Jay Gould for an explanation (10).

"Historians and philosophers of science often make a distinction between the logic and psychologic of a scientific conclusion ‑ or, in the jargon, 'context of justification' and 'context of discovery.'  After conclusions are firmly in place, a logical pathway can be traced from data through principles of reasoning, to results and new theories ‑ context of justification.  But scientists who make discoveries rarely follow this optimal pathway of subsequent logical reconstruction.  Scientists reach their conclusions for the damnedest of reasons: intuitions, guesses, redirections after wild-goose chases, all combined with a dollop of rigorous observation and logical reasoning to be sure ‑ context of discovery."

Clearly the model above is built with the context of justification in mind.  If we extend the argument to Boyd’s OODA Loop, then it is built more in the mode of context of discovery.  It describes the process of discovery.  It describes the process of discovery and it can also be used to describe the context of justification – the simple explicit loop that so many people see.

So really we need to re-jig our simple model; we need to accommodate the parallel and messy nature of discovery.  Let’s do that.  Let’s allow it to reflect the context of discovery.

The previously single directional arrows have been replaced with double bidirectional arrows.  Doesn’t this more properly reflect the way that we approach these problems?  Think about it for a moment.

If all your experience is in cost reduction and local efficiency improvement you will see particular solutions in your mind – solutions that have worked for you or others in the past.  This alone will pre-determine the nature of the problem that you see as well.  It will pre-determine what you chose to notice.  Equally well if all your experience is in throughput enhancement and global improvement you will see particular solutions in your mind and this will once again pre-determine the nature of the problem that you chose to notice.  The human mind is massively parallel in its operation.  It is only computer algorithms that loop around in a repetitive and mechanistic way.

We need to acknowledge this messiness.  Boyd did so in the orientation stage of his process.  And in his description of this stage he used two rather important words – “projection” and “empathy.”  What the heck have projection and empathy got to do with discovery?  Gould described scientific discovery as in part; “intuitions, guesses, redirections after wild‑goose chases.”  What is happening is that we are triangulating in on a poorly verbalized part of discovery – abduction.

 
Abduction

Let’s continue with Stephen Jay Gould (10).  “This messy and personal side of science should not be disparaged, or covered up for two major reasons.  First, scientists should proudly show this human face to display their kinship with all other modes of creative human thought…”  “Second, while biases and preferences often impede understanding, these mental idiosyncrasies may also serve as powerful, if quirky and personal, guides to solutions.  C.S. Peirce (1839-1914), America’s greatest philosopher of science, even coined a new word to express the imaginative mode of reasoning involved in such mental leaping: abduction, or 'leading from' (one place to another), to contrast with the more sedate and classical modes of deduction, or logical sequencing, and induction, or generalization from accumulated particulars (all from the Latin ducere, 'to lead').”

Without projection and empathy we can not even do analysis and synthesis.  Projection and empathy describe abduction.  To analyze we need deduction and induction, to synthesis we must have abduction as well.  To understand systems in their entirety we must have abduction, because the moment we start to look at the parts of the system we can no longer understand the system itself.

In fact we have already come across “abduction” previously in the page on leadership and learning.  Nonaka and Takeuchi consider it important in the conversion of tacit knowledge to explicit knowledge; “This process of converting tacit knowledge into explicit knowledge is facilitated by the use of multiple reasoning methods such as deduction, induction, and abduction.  Particularly useful for this phase is abduction, which employs figurative language such as metaphors and analogies.”

What is our world view composed of, the big “O” of orientation, the manipulation of analogies in our minds.

 
Remember The 5th Step?

Let’s return for a moment to the five step focusing process of Theory of Constraints, the one that we have called our plan of attack.  Do you remember the 5th step as we wrote it previously?  Let’s rewrite it here.

(5)  If in the previous steps a constraint has been broken Go back to step 1, but do not allow inertia to cause a system constraint.  In other words; Don’t Stop.

Let’s see what Coram had to say about the OODA loop once it starts (11);

“A crucial part of the OODA Loop – or ‘Boyd Cycle,’ as it has come to be known – is that once the process begins, it must not slow.  It must continue and it must accelerate.  Success is the greatest trap for the novice who properly implements the OODA Loop.  He is so amazed at what he has done that he pauses and looks around and waits for reinforcements.  But this is the time to exploit the confusion and to press on.”

Now can anyone tell me if there is any difference between this admonishment for the OODA and Goldratt’s 5th step?  Check back to the discussion on inertia in the page on the process of change.  Pausing at the 5th step is so common.  This the exact moment when others, for example “the back to Egypt crowd (12),” will try to undo the success.

Of course we can avoid this tactical blunder by having a proper strategy in place – can’t we.  It is called the holistic approach.

 
Summary

Boyd’s trinity was; people first, ideas second, and things third (13).  The OODA Loop encapsulates Boyd’s understanding of the development of ideas, the process of discovery, and is presented within the context of discovery.

Its real power lies not in the mechanistic, iterative, explicit loop of observe, orient, decide and act, but rather in the implicit and direct interaction between observe and act within the context of prior orientation through trail and error, learning and doing.  When the working model produced in the orientation stage is based upon a dynamic that allows a competitive advantage, and that dynamic is fully understood and once again fully internalized, then the OODA Loop explains the way in which we can work inside other peoples’ decision cycles.  Gaining a competitive win every time.

The OODA Loop is “simple yet comprehensive and elegant (4).”

 
References

(1) Coram, R., (2002) Boyd: the fighter pilot who changed the art of war.  Little, Brown and Company, pg 335.

(2) Deming, W. E., (1982) Out of the crisis.  Massachusetts Institute of Technology, Centre for Advanced Education, pp 86-89.

(3) Wheatley, M. J., and Kellner-Rogers, M., (1999) What Do We Measure and Why? Questions About The Uses of Measurement.  Journal for Strategic Performance Measurement, June.

(4) Kuhn, T. S., (1996) The structure of scientific revolutions, 3rd edition.  The University of Chicago Press, pg 115.

(5) Hammond, G. T.,(2001) The mind of war: John Boyd and American security.  Smithsonian Institution Press, pg 189.

(6 Nonaka, I., and Takeuchi, H., (1995) The knowledge-creating company: how Japanese companies create the dynamics of innovation.  Oxford University Press, pg 60.

(7) Hammond, G. T., (2001) The mind of war: John Boyd and American security.  Smithsonian Institution Press, pp 151-153.

(8) Goldratt, E. M., (1990) The haystack syndrome: sifting information out of the data ocean.  North River Press, pp 52-54.

(9) Coram, R., (2002) Boyd: the fighter pilot who changed the art of war.  Little, Brown and Company, pp 214-215.

(10) Gould, S. J., (1996) Mind of the Beholder.  In: Dinosaur in a haystack.  Penguin Books, pg 94

(11) Coram, R., (2002) Boyd: the fighter pilot who changed the art of war.  Little, Brown and Company, pp 338.

(12) Woeppel, M. J., (2000) Manufacturer’s guide to implementing the Theory of Constraints.  St. Lucie Press, pg 41.  Quoting John Covington.

(13) Hammond, G. T., (2001) The mind of war: John Boyd and American security.  Smithsonian Institution Press, pg 110.

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