Theory of constraints

So what a CEO does is what's called a bottleneck analysis.

So now let's get into what a bottleneck analysis actually is, because it pertains to what's called the theory of constraints.

I just did a full presentation on this.

I'll link to the video at the end.

We had about eighty of them come down.

I, uh, did this in front of the crowd.

Who here is familiar with the theory of constraints? So what is the theory of constraints? Most people in the audience, maybe about ten percent raised their hand.

The other s- ninety percent had never heard of this.

And I ended up encountering some information that in business that I later applied to consciousness, spirituality, and inner work.

And I like to start with that, which is the theory of constraints.

The theory of constraints states that if you have a system that's working, and the three of us know it as well as we do, most people have some basic idea, if anything.

So I'm going to give the simplest concept here.

Theory of constraints states that if you have a system that's working at all, you'll reach a point where working on your policies and your practices and your procedures and your preparations stops.

has a diminishing return and the thing to do is find your biggest constraint your biggest roadblock and unmake that that bottleneck and then all that other stuff turns back on again and then for a lot of people business becomes an endless series of working through the constraints and as you remove grosser and grosser constraints you get more and more freedom in that system okay well The seventh time that I lost everything, and I mean everything, I hadn't recovered from the sixth.

I was desperately frantic for that next hundred grand that I had just made.

I generated about $161 million in a couple dozen industries for other clients, did about 11 million in sales myself.

it is notorious.

It's a good... [laughs] Anyway, the book "The Goal" is called Theory of Constraints, and you just mentioned constraints in the math there.

Mm-hmm.

Um, and so the theory of constraints is essentially, like, you are always, you are always reporting to...

Like, the boss you always have is the set of constraints you have.

How you've set up your life, how you've set up your systems, how you've set up your business, how you've set up the math.

So as a manufacturing world, you know, it was, um...

The first training package I really got into was Theory of Constraints.

Uh, after that, you know, Lean is obviously a base rock for, for everything that everybody does in this world.

Um, the path of Six Sigma, complex problem-solving, um, you know, Kanban systems, just-in-time, you know, 5S is a, a basic one and visual management, things like that.

Yeah, because I remember you published a blog post on this a while back.

And remember, I called you up, I'm like, careful, you're sounding a lot like Theory of Constraints now.

Careful.

Yeah, I

One of them is this concept known as the theory of constraints, but it's sort of more colloquial known as bottleneck theory.

And what bottleneck theory teaches us is that in any complex workflow, multi-part workflow, there is always ever just one part of the workflow that is constraining the flow of work through the entire system, right? So it's basically another way of saying every chain has a weakest link.

And there may be parts of the chain that are rusty, but only one of them will break under tension.

Give us

a little overview just for those who have never heard of Agile.

So there's a few—let me teach a couple of quick concepts because I think they're useful, right? One of them is this concept known as the theory of constraints, but it's sort of more colloquial known as bottleneck theory.

And what bottleneck theory teaches us is that in any complex workflow, multi-part workflow— there is always ever just one part of the workflow that is constraining the flow of work through the entire system, right? So it's basically another way of saying every chain has a weakest link.

And there may be parts of the chain that are rusty, but only one of them will break under tension.