The Goal

RP: Most of the tellers said they wanted to do this TOC thing, too. Well, what do they really need to do? They really don't need to know how to do future reality trees because their everyday life is not involved in future reality trees. But a teller is often dealing with conflict resolu- tion. Tellers represent the frontline defense, especially at savings and loans. People come up to them and say: "This doesn't work, this is out of balance, they screwed this up," and it's the tellers who have to solve the problem. So we taught them how to do conflict clouds. We created conflict-cloud worksheets for them, pads of 50 sheets, eight and a half by eleven. On the back side were the instructions, just in case they forgot how to do it. And the teller could actually fill in the cloud as he or she was talking to the customer, work out the prob- lem, then rip off the sheet and do the next one. We had that going throughout the bank.

DW: It sounds like one of the main conclusions you reached

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was that the perceived constraint-the regulatory climate-was not the actual constraint

RP: Correct. I would walk into the office of my compliance officer and I'd say, 'Jeff, I got this idea." And he would just automatically point to this poster on his wall that basically said: If you can dream it, there's a regulation for it.

DW: And yet even in that environment, you found ways to grow.

RP: We did things in the banking industry that were totally unheard of. We actually had regulators visit us more often than other banks because those other banks kept calling them and saying: "They've got to be doing something illegal, you need to check them out."

Interview with David Harrison, Administrative Ser- vices, Founder, Positive Solutions, Newcastle, U.K.

DW: Tell me about Positive Solutions.

DH: We provide management and administrative services to inde- pendent financial advisors. At present we have 755 of those people who rely upon us to help them with such things as compliance with financial services regulations, collection of commissions, and so forth. That's the company we built, 60% of which we sold recently to the Aegon group, one of the world's largest insurers.

DW: How have you made use of The Goal?

DH: In a couple of ways. First and foremost we use the five focus- ing steps almost instinctively now, in that we seek to identify the constraint in any problem before we do anything else. That's sort of been my mantra, if you like-before we go any farther, let's identify the constraint.

Beyond that, a big part of what we do is acquire new independent financial advisors-we want people to join our organization, and the people we use to recruit them we call our business consultants. Oded

RP: In a couple of ways. First and foremost we use the five focussing steps almost instinctively now, in that we seek to identify the con- straint in any problem before we do anything else. That's sort of been my mantra, if you like-before we go any farther, let's identify the constraint.

Beyond that, a big part of what we do is acquire new independent financial advisors-we want people to join our organization, and the people we use to recruit them we call our business consultants. Oded Cohen, of Goldratt UK, helped us build a process for that. He broke it down into very discrete steps and helped us program software which helps us track how each of our business consultants is succeeding, or not. At any point in time they may have 150-200 people they're hav- ing conversations with about joining Positive Solutions. We've got them to think of each of those people as a project. That streamlined the process and also got our business consultants to think in a more logical fashion.

DW: What distinguishes Theory of Constraints from other man- agement techniques you've looked at?

RP: I think it can be very easily applied in a simple process. As I have said, the one I use more than anything else is the five focussing steps. A lot of the problems which arise in business are about lacking focus. I guess if people were to describe Positive Solutions, it would be as a very focussed organization. We don't seek to be all things to all people. We stick to what we know will be the most profitable areas to us at any point in time. We've been working on the same constraint for five years.

DW: And that is?

RP: Our ability to recruit the right people at a pace which fits our business plan. The more people we have, the more profitable we become. A lot of companies by now would have given up at about 300 advisors, something of that nature. And they'd say the constraint is no longer recruiting people, what we should be doing is trying to improve the productivity of those people, or trying to get a better deal out of the manufacturers of financial products. But we've kept the focus on the fact that as long as the people that you are recruiting

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are profitable, then why stop recruiting them? Just because it's not getting any easier? Well, it's not actually getting any harder, either. It's just another day at the office. But we can work all of our financials back to simply the number of advisors that we have. Therefore, we don't go any farther.

DW: That's your focus?

RP: That's our focus. We've identified the constraint, now let's ex- ploit it, make the most of it. Therefore we have easily one of the best recruiting machines in the UK in this sector. We approach recruit- ment very differently from all our competitors. Our competitors will advertise, they'll try to acquire businesses, for example, rather than the approach that we have, which is to recruit people one by one. Our rate of growth might at first appear to be slow. But because our advisors have been recruited in the right way, we don't lose many of them. That's the beauty of TOC: As you really dig in to identify the constraints, you begin to understand these things.

DW: Have you thought about what the next constraint will be?

RP: Of course, at present there is still a market for further indepen- dent financial advisors to join us. There are about 25,000 of these people in the UK and we have less than 1000 of them. Now the qual- ity of some of those 25,000, and the fact that not everybody will join us in any case, means at some point the effort needed to increase the capacity just won't be worth it versus the energy we could put into something else. At that point, you say, "We've now changed our plan. What is the constraint in our new plan?" Frankly, it's about retaining the clients' money. At present what we do is introduce clients to a variety of manufacturers of financial services. The money goes to the manufacturers and they give some of it back to us in the form of commissions or fees. The next step really is for the clients to give us the money, and for us then to give some of it to the fund managers and the life insurers. So once we're a certain size, the constraint will begin to move. We'll have a brand, and the revenue needed to com- municate that brand, so there won't be quite as much effort to get people to join us. At that point the constraint shifts.

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Interview with Dr. Antoine Van Gelder A South African Hospital

University of Pretoria

DW: You're not a typical Eli Goldratt disciple, are you?

AV: I'm a university professor with a dual appointment, head of the department of internal medicine at the University of Pretoria and head of the department of internal medicine at Pretoria Academic Hospital. In 1992 I got an invitation to attend one of Eli Goldratt's courses in Pretoria. Not one run by him himself but by a subsidiary of the Goldratt Institute. At that time I knew nothing about theory of constraints and I had not read The Goal. I got myself into this out of curiosity more than anything else.