Book Notes - The Back Of The Napkin

The Back Of The Napkin by Dan Roam [2008]

Summary:
A book promoting the use of pictures and diagrams as a communication medium. It outlines why visual communication is effective and how to make your visual communications more effective. It contains a framework for selecting the most appropriate diagrams for certain situations as well as a framework for problem solving.

Notes:
Page 4: Reminder, develop an 'elevator pitch' for every project or idea.
Page 15: Six Problem Clumps:
1) Who/What
2) How Much/Many
3) When
4) Where
5) How
6) Why
Page 37: Process Of Visual Thinking:
1) Look - Collecting and screening
2) See - Selecting and clumping
3) Imagine - Seeing what isn't there
4) Show - Making it all clear
Page 57: Rules For Better Looking:
1) Collect everything you can
2) Lay it all out where you can look at it (literally lay it out)
3) Establish fundamental coordinates (use; Who/What, How Much/Many, When, Where, Why, How, as axes)
4) Practice visual triage
Page 72: Common Precognitive Visual Attributes:
1) Proximity - close things are related
2) Colour - hints at groupings
3) Size
4) Orientation - perpendicular angles are best
5) Direction - perceived movement (arrows etc)
6) Shape
7) Shading
Page 84: How = Who + How Much/Many + Where + When
Page 94: You can use the 6w's in order to Show as well as See.
Page 107: SQVID Visualisation breakdown:
1) Simple Vs Elaborate
2) Quality Vs Quantity
3) Vision Vs Execution
4) Individual Attributes Vs Comparison
5) Delta (change) Vs Status Quo
Page 108: You can either progressively go through all of the SQVID steps (idea focusing) or you can work out what balance of each extreme is the most important for the audience (audience focusing).
Page 131: The Three Steps of Showing:
1) Select the right framework
2) Use the framework to create the picture
3) Explain the picture to someone else
Page 134: The links between seeing and showing:
1) Who/What - Picture/Portrait
2) How Much/Many - Chart
3) Where - Map
4) When - Timeline
5) How - Flow Chart
6) Why - Multivari Plot
Page 141: Diagram linking the ways of showing with SQVID.

Quotes:
Page 13: "Any problem can be made clearer with a picture, and any picture can be created with the same set of tools and rules."
Page 133: "For each of the six ways of seeing there is one corresponding way of showing. For each one of these six ways of showing, there is a single visual framework that serves as a starting point."

Book Notes - The Adventures of Johnny Bunko

The Adventures of Johnny Bunko by Daniel Pink [2008]

Summary:

1) There is no plan
There are two types of decision; instrumental and fundamental. You make a decision for instrumental reasons if you are prepared to put up with the present because you think it will lead somewhere. You make a decision for fundamental reasons when your not sure where it will lead but it seems interesting. The former rarely work out and the latter may not get you where you thought you wanted to go but normally lead somewhere interesting.

2) Think strengths, not weaknesses
Steer around your weaknesses and focus on your strengths. You will be more motivated, more enthusiastic and more successful if you do what you are good at.
See: Now Discover Your Strengths by Marcus Buckingham

3) Its not about you
Focus your energy outward not inward. Unless you are a starving artist it isn't about what you want, you have a client, a customer or someone else who you need to satisfy so apply your strengths to that.

4) Persistence trumps talent
"The people who achieve the most are often the ones who stick with it when others don't"
You need to show up, practice, practice and practice some more, perfect your art whether that art be painting, music or engineering. Talent only gets you so far, sticking with it and persisting make you successful.

5) Make excellent mistakes
If you aren't making mistakes you aren't trying hard enough. Make mistakes for the right reasons, pushing the boundaries, trying something new, trying to make a difference. If it does all blow up then you need to learn from those mistakes so you don't make the same mistake again. Try to: "Make a mistake from which the benefits of what you've learned exceed the costs of the screwup."

6) Leave an imprint
Try to make a difference, leave things better than they were and be proud of what you do.


Quotes:
"Is this mind-numbingly repetitive? or repetitive mind-numbing?"

Book Notes - Why Work Sucks

Why Work Sucks by Cali Ressler and Jody Thompson [2008]

Summary:
Judge people on results, not the amount of time they spend in the office. A simple and some would say common sense statement, however 99% of the world is managed in completely the opposite way. This book provides a great argument against the prevailing management methods and also what they should be changed to.

Definitions:
Presenteeism - Being physically but not mentally present in your job. (page 17)
Sludge – The negative commentary that occurs in the workplace based on the erroneous beliefs on page 23. (page 30)
Sludge Anticipation – Mental preparation you go through if you are expecting sludge, wasted time and energy. (page 49)
Sludge Justification – The time and energy taken to present your excuse to the sludger, not only wasting your time but the person sludging too. (page 51)
Black Sludge – Sludging people behind their back in groups of 2 or more people. (page 52)
ROWE – Each person is free to do whatever they want, whenever they want as long as the work gets done. (page 66)

Notes:
Page 13: The core problem with work is the theory that Time + Physical Presence = Results, when infact it is very easy to put in a lot of time and physical presence but not accomplish anything.
Page 15: Random Thought: If you are working in an ROWE and can accomplish your job in say 20 hours per week, what happens if your boss wants you to do more, do you get a pay rise or do you just get more to do?
Page 19: Presenteeism isn’t the employees fault it is the fault of the system, of the judges of performance. Show me how you measure me and i will show you how i behave.
Page 23: List of erroneous assumptions we currently have for work. My favourite is “if people get their work done in less time they should get more work”.
Page 24: Random Thought: I wonder how much the above statement has to do with problems in project management, one of the big things in Critical Chain is that “finish early” is never passed on to the next step, one of the reasons for this is that there is no incentive to do so, you will just get more work or be expected to do future work in less time.
Page 33: Paragraph two goes on to say that almost all companies are the same, even young ‘progressive’ ones because the people working there have the same assumptions.
Page 34: If you have a high level of demands (stuff to do) and a high level of control (you get to prioritise and manage the work) it may be hectic but it is not so stressful. However if you have high demands and low control (someone else decides what you do when) life becomes unbearable.
Page 41: Flexitime is not the answer, it is considered a perk, the company will do anything within their power to put you off doing it and you will likely be ‘sludged’ for not being committed.
Page 54: Random Thought: Is Sludge the 8th lean waste?
Page 61: Black Belt pointing out that it isn’t all about fluff bunnies and spending more time with the kids, it is about focusing on what really matters to the company and eliminating waste.
Page 66: The irony is most people go from a ROWE (college/university) into jobs that are all about how much time you spend at your desk. You go from an environment where you are completely free to select and prioritise your work (within a certain framework) to being told what to do and treated like a child. Is it any wonder that there is a serious adjustment period for graduates?
Page 82: The perception is that ROWE is a win-lose situation (employees win, employers lose) this could not be further from the truth. How can the employer lose if the employees have a focus on business results, are more committed to achieving those results because they want to keep working in an ROWE and are generally happier and more productive?
Page 85: Random Thought: Consultants and freelancers already live in an ROWE world, all ROWE is doing is bringing that ethic to companies. Maybe this is how Charles Handy’s view of the future will happen, rather than everyone becoming freelance and being bought into a company, ROWE will allow similar flexibility and benefits without the hassle of coordinating hundreds of independent workers.
Page 89: The 13 Guideposts:
1. People at all levels stop doing any activity that is a waste of their time, the customers time or the company’s time.
2. Employees have the freedom to work any way they want.
3. Every day feels like Saturday.
4. People have an unlimited amount of “paid time off” as long as the work gets done.
5. Work isn’t a place you go – it’s something you do.
6. Arriving at the workplace at 2:00pm is not considered coming in late. Leaving the workplace at 2:00pm is not considered leaving early.
7. Nobody talks about how many hours they work.
8. Every meeting is optional.
9. It’s ok to grocery shop on a Wednesday morning, catch a movie on a Tuesday afternoon, or take a nap on a Thursday afternoon.
10. There are no work schedules.
11. Nobody feels guilty, overworked, or stressed out.
12. There aren’t any last minute fire-drills.
13. There is no judgement about how you spend your time.
Page 125: The side effect of “Every meeting is optional” is that people are much more focused on why they are having the meeting, who they want to attend and why and if people don’t turn up it probably saying you got it wrong.
Page 144: Random Thought: An ROWE would eliminate the need for project reviews, it would be up to the project leaders to schedule time for coaching, mentoring and questions.

Quotes:
Page22 : “Perception is reality”
Page 29: “We have this weird permission to be shitty to one another at work.”

Book Notes - The Art Of War For Managers

The Art Of War For Managers by Gerald A Michaelson [2001]

Summary:
“Know the enemy and know yourself and you will never be defeated.”
Interplay of strategy and tactics; strategy is the plan, tactics are the implementation.
Information and speed are the key to winning.
Attacking head-on is rarely the best approach, find your niche and expand from there.

Notes:
Page 3: A plan that is not written down is no plan at all, a simple written plan is best.
Page 4: Unlike Tzu’s constant factors for the battlefield in business they are much simpler, you must study:
1. The ‘mission’ of the company.
2. The outside factors (industry/economic trends etc).
3. The marketplace.
4. The leaders.
5. The guiding principles.
Page 13: It is important to for start-ups to have sufficient reserves to ride-out downturns and to tide them over between launch and profitability. As they say; “Profit is king, but cash rules” you can survive without profit but you can’t survive without cash.
Page 27: Have two types of edict; instructions and orders. Instructions are issued as guidelines, to be followed if practical. Orders are to be followed immediately and to the letter but can only be given by someone on the ground in the situation. This prevents stupid decisions being made above.
Page 29: Fundamental principles of business:
1. Organize Intelligence
2. Maintain Objectives
3. Establish A Secure Position
4. Keep On The Offensive
5. Plan Surprise
6. Think Manoeuvre
7. Concentrate Resources
8. Practice Economy Of Force
9. Keep It Simple
Page 31: Strategy always comes before tactics, while a good strategy might succeed even with poor tactical execution, a poor strategy even with superlative tactics will almost never succeed. It is therefore important to make sure that you are heading in the right strategic direction before you determine tactics.
Page 32: “Boil the ocean” appears to be a reference to one strategist’s suggestion for how to get rid of German u-boats in the second world war.
Page 38: Customer input is a vital operational measure, it is key to improved performance and winning. Use of balanced scorecard suggested to keep track of financial and non-financial, lagging and leading measures.
Page 44: The use of extraordinary force to ensure victory, this can be applied on a macro level; a company focusing all efforts to ensure that they take a market or on the micro level; a person focusing all of their effort on a particular task.
Page 51: Keep your products secret until the last minute, it removes the ability of your competitors to plan a response. Apple does this particularly well.
Page 63: Reference to Tyco going from $2b to $30b in 6 years, ironically it was under the CEO who ended up in jail. Book probably written before those events.
Page 67: The rule of three: never make more than 3 points in any one communication, if you make more some of the points are likely to be forgotten. Keep it simple and direct.
Page 77: 5 faults of leadership:
1. Recklessness, which leads to destruction,
2. Cowardice, which leads to capture,
3. A hasty temper, which can be provoked by insults,
4. A delicacy of honour, which is sensitive to shame,
5. Over-solicitude for his men, which exposes him to worry and trouble.
Page 91: Acknowledging the role of known standards of performance so that the leader can be perceived as impartial and can set discipline to achieve standards.
Page 93: The importance of going to the gemba for managers to inform their intuition and knowledge of the real situation.
Page 95: It is important to have direct communication with the people on the ground, often information is filtered as it goes up the chain which means you might not be getting all pertinent information. Create relationships with a select few people further down the chain so that you can get direct information.
Page 110: Information on personal survival and career paths.
Page 169: Summary of key concepts.

Quotes:
Page 6: “If the only tool you have is a hammer, everything will look like a nail.”
Page 14: “While we have heard of stupid haste in war, we have not yet seen a clever operation that was prolonged.”
Page 22: “To subdue the enemy without fighting is supreme excellence.”
Page 39: “Where everyone decides everything, no one decides anything.”
Page 65: “Do not do what your enemy wants, if for no other reason than he wants it.”
Page 72: “The key to success is what the customer wants, not what you can do.”
Page 78: “When was the last time anyone said; ‘I wish I had waited 6 months longer to fire that guy’” – Jack Welch
Page 81: “Logic sounds most convincing to the presenter; it is in the emotions of the receiver that positions are changed.”
Page 101: “Know the enemy and know yourself and you will never be defeated.”
Page 112: “Too often, the absence of conflict is not harmony, it’s apathy.”
Page 116: “When you can win and retain good relationships, only then can you become strong.”

Book Notes - The Goal

The Goal by Eliyahu Goldratt [1984]

Summary:
Prime measurements should be: Throughput (sales), Inventory (valued as raw material) and Operating Expense (everything that doesn’t fall into the other two).

Steps for a Process of Ongoing Improvement (POGI) in production:
1. Identify the bottleneck(s) – Find Herbie.
2. Exploit the bottlenecks – Work out how to make Herbie Produce the maximum amount possible.
3. Subordinate Everything Else to the Constraint – Keep the kids together with Drum Buffer Rope, have Herbie keep pace on a drum and tether him to the front person with a rope of a fixed length.
4. Elevate the Bottleneck(s) – Lighten the load in Herbies backpack
5. If the constraint is broken go back to step 1 and repeat.

Rules of managing a bottleneck:
1. Balance flow through your plant (not capacity).
2. The value of parts waiting at a bottleneck is equivalent to the sale price of the products that are waiting for the parts.
3. Never lose time on a bottleneck.
4. Never have a bottleneck work on a part that isn’t required immediately.
5. Never have a bottleneck work on a potentially bad part.
6. Redistribute work from the bottleneck to non-bottlenecks even if it seems like they cost more.

Notes:
Page 40: “The goal is to make money.” While elaborated up on It’s Not Luck this is still the primary goal of every company and the other two goals are complimentary (like the golden triangle).
Page 46: Primary measurements of making money; Total Profit, Percentage Profit and Cashflow.
Page 51: The above measurements have no meaning to people on the shop floor, so other measurements are needed to convert the management metrics to shop floor ones. The meaning is probably lost, the conversion results in local optima rules.
Page 60: The three operational measures Goldratt advocates are:
1. Throughput – The rate at which the business generates money through sales.
2. Inventory – All the money the system has invested in purchasing things which it intends to sell.
3. Operational Expense – All of the money the system spends to turn Inventory into Throughput.
Page 61: Inventory is deliberately only the price of raw goods and does not include cost of ‘value added’ activities to eliminate the confusion of whether a dollar spent is an investment or an expense.
Page 87: The reason no plant can ever be perfectly balanced is a combination of dependant events and statistical fluctuations. I.e. As the events are dependant the statistical fluctuations do not average out, delays are passed on but shortened times are not, therefore lead times stretch out.
Page 135: Any incentive system based on absolute output over a day or a week is fundamentally flawed, it encourages ‘hero syndrome’ at the end of the shift to meet the quota. Instead the incentive system should be based on how consistent they are in achieving the quotas on an hourly basis. Reduce statistical fluctuations as much as possible.
Page 217: Need to implement Drum Buffer Rope system to prevent an increase in inventory on the shop floor. Use a ‘drum beat’ to signal when to release raw materials into the process. Use a ‘buffer’ of a fixed size to ensure that the bottleneck always has material to work on, the buffer should be twice the statistical fluctuations in predicting when material will arrive at the bottleneck. Finally use a ‘rope’ so that there is a maximum amount of inventory between raw materials and the bottleneck.
Page 230: Benefits of cutting batch sizes in half:
1. Half the WIP
2. Half the cash tied up
3. Lead time is reduced as wait and queue time are halved
Page 238: Halfling batch sizes should increase efficiencies as the next steps will no longer be waiting for parts from preceding steps.
Page 269: For the Socratic method to be successful you must know what questions to ask the people you are trying to teach. To anticipate their questions and issues so that you can pose the right answers to point them in the right direction. The basis for these questions might come from a CRT.
Page 272: While every manager knows that inventory is a liability – cash tied up in the system, things you might not sell – on a balance sheet it is classed as an asset. Therefore by reducing your inventory it can show up as a loss in your P&L. Fortunately this only shows up as a one-time reduction in your assets.
Page 289: Example of Mendeleev and the periodic table, identified an underlying pattern in atoms that not only fit the existing data but was used to determine where there was missing or incomplete data. Rather than imposing an arbitrary order on the table he revealed and intrinsic order in nature.
Page 299: Key parts of POGI are; Improvement, you need the right measurements to know that you are improving and Process, it needs to be a step by step repeatable process.
Page 300: Chain analogy; in the cost world you are trying to trim the weight of the whole chain, in the throughput world you are trying to strengthen the whole chain.
Page 301: Steps for TOC production improvement:
6. Identify the bottleneck(s) – Find Herbie.
7. Exploit the bottlenecks – Work out how to make Herbie Produce the maximum amount possible.
8. Subordinate Everything Else to the Constraint – Keep the kids together with Drum Buffer Rope, have Herbie keep pace on a drum and tether him to the front person with a rope of a fixed length.
9. Elevate the Bottleneck(s) – Lighten the load in Herbies backpack
10. If the constraint is broken go back to step 1 and repeat.
Page 312: If you have spare capacity you can sell that capacity at any value above cost of materials because all of the other costs are taken into account already, the one proviso for this is that your market must be segmented so you do not have to lower the prices for everyone.
Page 317: Pick a hypothesis and then try to rigorously link it with other things using deductive logic.
Page 336: The questions that all managers should be able to answer are:
1. What to change? – Current Reality Tree + Conflict Resolution Diagram
2. What to change to? – Future Reality Tree
3. How to change? – Transition Tree + PreRequisites Tree

Quotes:
Page 41: “An action that moves us towards making money is productive.”
Page 88: “Most of the factors critical to running [a] plant successfully cannot be determined precisely ahead of time.”
Page 138: “Some resources have to have more capacity than others. The ones at the end of the line should have more than the ones at the beginning – sometimes a lot more.”
Page 158: “An hour lost at a bottleneck is an hour lost for the entire system.”
Page 210: “Making an employee work and profiting from that work are two different things”
Page 268: “Don’t give the answers, just ask the questions.”

Book Notes - The 4-Hour Work Week

The 4-Hour Work Week by Timothy Ferris [2007]

Summary:
Alas not many notes from this book, it is just so different from anything I’ve ever read before I’m not quite sure what to write down. I suspect that some reflection and re-reading will be required before I have full notes.

I kind of feel like I’m being exploited by the book, that the lifestyle it espouses requires you to exploit other people (in this case me), the author highlights an adware pioneer as someone to aspire to after all. But at the same time there is definitely some gold in there and it is thought provoking and eminently quotable.

I think the concepts in this book could help you run any business. While a more morally acceptable product would not be as profitable or easy as the products the author suggests, the methods are applicable.

With all of the above said I think Timothy Ferris is very astute, he is giving away his secrets because he knows people will pay good money for the dream it sells but very few have the courage and determination to see it through. For other examples see Toyota or Eli Goldratt.

Notes:
Page 4: People don’t want to be millionaires, they want the millionaire lifestyle.
Page 77: Three times a day (at set times ask yourself; “Am I inventing things to do to avoid the important?”
Page 101: The author suggests batching things (E-mail, phone calls, bills payments), it sounds rather un-lean to me, maybe an alternative self-help book would be how to lean your life. It is a bit strange because a lot of the other things in the book sound very like Theory of Constraints and Lean ...
Page 120: By outsourcing things to other people you will be surprised how many tasks don’t need done if you have to pay for them directly.
Page 192: Offer limited options, while you can charge heftier premiums for customisation it can create more problems than it is worth. Firstly options attract pedantic picky people who are more likely to complain if it is not exactly what they want. Secondly too many options can make customers more indecisive and hence less likely to buy, they worry about the benefits of one product over another etc.
Page 193: Try to avoid high maintenance low profit customers, they will waste the majority of your time and provide the lowest income.

Quotes:
Page 13: “An expert is a person who has made all the mistakes that can be made in a very narrow field” – Niels Bohr
Page 46: “What we fear doing most is normally what we most need to do.”
Page 74: “Parkinson’s law dictates that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion.”
Page 168: “To get an accurate indicator of commercial validity, don’t ask people if they would buy, ask them to buy.”
Page 220: All courses of action are risky, so prudence is not in avoiding danger (it is impossible), but calculating risk and acting decisively. Develop strength to do bold things not the strength to suffer.” – Niccolo Machiavelli, The Prince

Book Notes - The Empty Raincoat

The Empty Raincoat by Charles Handy [1988]

Summary:
Alas typing this up 2 months after I took the notes so can’t really remember an overarching narrative or point to the book. Note to self: If I read it again think about a synopsis.

Notes:
Page 23: Handy sees intelligence as an assets, at least as important as owning a home.
Page 25: We should pursue increasing our intelligence quotient as avidly as we pursue owning a home. In fact the more intelligent the society the less home ownership there is.
Page 33: You should be able to build up a “time bank” annual leave over years.
Page 36: Time is Money. Small businesses trade their time for busy people’s money.
Page 50: Concept of a sigmoid or s-curve, (see TRIZ theories of evolution). This may explain the companies I have worked for, they have all been at the top of the s-curve when I started with them and only those that have found the next curve have prospered.
Page 50: When things are going well it is time to change.
Page 53: You can see s-curves everywhere from personal relationships to empires.
Page 59: The past is a poor predictor of the future.
Page 68: You should strive for a balanced donut in your life: The centre represents your core responsibilities and the outside is discretionary things that you can do. If the centre is too large you get bored, if the outside is too large you never reach a target. There should be a balance of freedom and responsibility.
Page 69: A Type 1 Error in business is getting something wrong and a Type 2 error is missing an opportunity. Think of a way to relate to Goldratt’s DollarDay metric in Beyond the Goal.
Page 76: Ricardo Semler used a donut structure for Semco.
Page 79: The core of the donut is what people rebel against. E.g. Non-smoking offices.
Page 104: “The £5 Note Auction” to illustrate the importance of communication in generating win-win solutions. Pick two people at random from opposite sides of the room and make them bid on 3x £5 notes, they will both end up bidding to around £5 and possibly more on the last of the 3. Exhaust all possible permutations of this to prove that people are stupid. Then pick two people sitting next to each other (preferably who have been talking) and repeat. They should have an agreement that is mutually beneficial to both of them and they will fleece you.
Page 115: Subsidiarity – Reverse delegation, leaving all decisions that can be made locally local. Handy suggests that people have a moral right not to be interfered with.
Page 146: Highlights the J&J Credo as a good model; primary responsibility to customers, then employees, then environment and finally to shareholders. Makes mention of the Tylenol crisis.
Page 172: Head of Nissan UK comparing the different management styles of western and Japanese companies. Western companies have rigid interfaces and departments like facets of a crystal, Japanese companies are more like mud, fluid flowing able to respond.
Page 205: Different types of intelligence: Factual, Analytic, Linguistic, Spatial, Musical, Practical, Physical, Intuitive, Interpersonal.
Page 261: Chapter on “A Sense of Direction”.
Page 262: People want entertainment, too little and they get bored but they also don’t want too much as it becomes harrowing. There is a suggestion that the first world war was caused because the middle classes in Europe were bored but they got more excitement than they really wanted. We have the same problem now, there are no ‘great causes’ that universally inspire a country, most people are content to live their lives amass wealth and possessions and not rock the boat. This is not enough.

Quotes:
Page 19: “There are kings and prophets, I was always told, the kings have the power and the prophets have the principles.” – Tony Benn
Page 26: “If work were so great the rich would have hogged it all long ago” – Mark Twain
Page 27: “Slack always costs money. It is just a matter of who pays for it”
Page 38: “When intelligence is the primary asset, the organisation becomes more like a collection of project groups.”
Page 43: “No-one can do much about the brilliant, they will be miserable anyway.” – Michael Young
Page 59: “The world belongs to the discontented.” – Robert Woodruff [Coca Cola]

Book Notes - Necessary But Not Sufficient

Necessary But Not Sufficient by Eliyahu Goldratt [2000]

Summary:
The inherent conflict in software development is adding features to keep the customers happy Vs keeping the software easy to maintain and use to keep the customers happy. This conflict can be avoided if you focus on adding value to the customer, if they are making bottom line benefits they will not be interested in adding features that do not add value.
To add value you must work out what limitation your software can overcome. Moreover you must work out what rules are in place in the company to accommodate those limitations and then replace those rules with new more suitable rules. Only once the rules that accommodated the limitation are removed will you see benefits.

Notes:
Page 60: Have the client meet the project team before the bid goes in, while it does mean you need to have excess staff it can work very well to motivate the sale. If the client can get a feel for the project team and their competence they are more likely to select that vendor.
Page 61: Companies spent a lot of time making their new tools (ERP systems etc) look like the old tools, the problem is if they looked exactly like the old system then what is the point in upgrading.
Page 114: Refer to these 5 pages for discussion on finite capacity scheduling, along with its pros and cons.
Page 124: The key to finding the where the benefit lies in a new technology is to understand what limitation it overcomes, but moreover work out what rules helped us accommodate the limitation and what we should replace them with.
Page 130: Concept of time buffers as well as material buffers. Also concept of dependant setup times (going from black to white parts in injection moulding). Even more complicated if dependant setup on two machines overlaps and causes the bottleneck to shift between them.
Page 163: To make sure clients don’t focus on stupid little details you need to offer them sufficient value that they don’t care about the little details only the bottom line benefits.
Page 175: TOC can be devastating to a system if you only introduce it to one section at a time. If you introduce it in production and sales can’t keep up you have too much capacity for no reason. If you increase sales but production can’t keep up then you annoy your customer. The same is true of all other dependant functions.
Page 176: Forecasting at a warehouse level and particularly basing Min/Max Replenishment on forecasts is an easy way to build inventory, the solution is not to have a better forecast but to be flexible enough to make product to order.
Page 183: Oral presentation of the conflict between production, distribution and sales, example of presenting a transition tree.
Page 190: Forecast accuracy for various sample sizes like central limit theorem?
Page 192: Have a pull system with each plant holding ~3 weeks (dependant on replenishment time) of inventory of everything and shipping what each warehouse sells on a daily basis. As the shipments are for all sales, not just one product, the transportation should be still be a sensible cost.
Page 198: Measure your pull in throughput dollar days both for inventory and for missed shipments.

Quotes:
Page 4: “To be paranoid you must constantly assess the impact of your actions on the global picture. Which means that first you must relentlessly search for a deep understanding of the global picture.”
Page 62: “The customer is not always right but they are always the customer.”
Page 124: “We expect that a new technology will bring benefits when and only when, the new technology surpasses an existing limitation.”
Page 224: “As long as the end customer in the supply chain didn’t buy, nobody in the supply chain has sold.”
Page 226: “Trust is nice as long as there are measurements that serve as a watchdog.”

Book Notes - It's Not Luck

It’s Not Luck by Eliyahu Goldratt [1994]

Summary:
To develop unrefusable offers in marketing:
1. Understand the Undesirable effects of your customers and link them together in a logical Current Reality Tree.
2. From the Current Reality Tree understand the Core Problem, the Core Problem is normally expressed as a conflict in a Conflict Resolution Diagram.
3. Once you have identified the conflict look for injections to break the conflict and then use these injections to construct a Future Reality Tree.
4. To bring your future reality tree down to earth insert Negative Branch reservations which you can trim so that the solution is workable.
5. Next construct a Transition Tree to plan how you will move from the current to future states.
6. If required use a Prerequisites Tree to understand what specific steps are required to reach a specific goal.
7. Implement the above.

General Notes:
Most companies understand their UDE’s but not their Core Problems, if you can understand the Core Problem in you or your clients businesses you can offer real value.

Definitions:
CRT = Current Reality Tree = Logical diagram of undesirable effects used to surface root causes.
UDE = Undesirable Effect = Symptoms of the root cause problems.
RC = Root Cause = The cause of a number of related UDE’s.
CP = Core Problem = There are normally only 1 or 2 core problems for all of the undesirable effects and root causes and by solving the problems all UDE’s are eliminated.
CRD = Conflict Resolution Diagram = Also known as the “evaporating cloud” logical diagram of the conflict between necessary conditions.
FRT = Future Reality Tree = The opposite of the UDE’s in the current reality tree, the future state of where you want to go.
NBR = Negative Branch Reservation = Branches added to the Future reality tree that outline any potential problems with the FRT. Similar to Murphy’s Analysis.
TT = Transition Tree = A how to guide to go from the present to the desired future.
PRT = Prerequisites Tree = What steps are required to achieve a certain objective.

Notes:
Page 8: Similar negotiating technique to Getting To Yes.
Page 9: Negotiating steps:
1. As soon as you identify that you are in a negotiating situation that does not have an acceptable compromise, immediately stop the dialogue.
2. Set the right frame of mind, accept that it is not the other person to be blamed but the situation.
3. Write the cloud; a) What do I want, b) what do they want, c) what need is the cause for what I want, d) what need is the reason for what they want, e) what is the common goal of both parties.
4. Examine the assumptions that lead you to believe there is a conflict and attempt to break the assumptions.
Page 41: Forecast accuracy increases with the square root of the number of locations being delivered to, e.g. the forecast for 4 shops is twice as accurate as 1 and 25 shops is 5 times as accurate as 1 shop. It therefore makes much more sense to keep as much stock centrally as possible so that you can supply what is needed to the locations it is required without cross shipments.
Page 43: Buffer the customer like you would a physical constraint in a plant; expected production (sales) by replenishment time (shipping time).
Page 94: Except in simple situations you should construct a Current Reality Tree BEFORE you construct your cloud to make sure that you are tackling the root cause of the conflict and not merely a symptom.
Page 112: How to construct a CRT:
1. Identify ~15 UDE’s.
2. Find a cause and effect relationship between at least 2 of your UDE’s.
3. If the gap between these steps is large try finding an intermediate step.
4. Add ‘injections’ to bridge any insufficiencies in the logic.
5. Once you are happy with the connection between the first two UDE’s add another UDE that logically fits in.
6. Keep expanding the tree with new injections and UDE’s until all UDE’s are included in the tree.
7. Identify your root cause by tracing back the arrows in the logical diagram to the one or two UDE’s/Injections common to all branches.
8. Express this Root Cause in the form of a Conflict Resolution Diagram and examine the assumptions behind the arrows.
Page 142: Market segmentation is the key to coming up with unrefusable offers.
Page 162: If you can break the conflict arrow in an Evaporating Cloud that usually results in the most powerful solutions to your problems.
Page 173: Once you have the Future Reality Tree canvas for ‘reservations’ and add them as negative logical branches on the tree. Some will not be big issues and ignored and those that are a big risk should be trimmed.
Page 175: To cause market segmentation develop one CRT for the overall market and then add additional UDE’s for each client or sector, develop a core offer, then have modules that can be added to solve the additional UDE’s.
Page 179: How to construct an FRT:
1. Start at the top of the page with your goals.
2. At the bottom put an injection that helped you break the core problem in the Current Reality Tree.
3. Attempt to reach the objectives from the original injection by adding further injections and statements.
4. Start again but add Negative Branch Reservations to trim the fantasy elements of the tree.
5. If you have problems thinking of NBR’s look back at the CRT for ideas.
6. Using the NBR’s generate new more practical injections and re-write the FRT using these new injections.
Page 183: Negative Branch Reservations are what change a future reality tree from fantasy to something that should be practical.
Page 186: Most companies know their UDE’s but not their core problems, use CRT’s to identify the companies core problems and solve them, these are the most powerful solutions.
Page 197: Problem solving technique of weighing positives and negatives and trimming the negatives, starts at bottom of page.
Page 207: Involve the client in the sale, present a negative branch and have them help you trim it.
Page 207: Try something different, instead of pressuring the client into the sale offer to give them time to go away and consider the offer. If they ask you to proceed present a list of the usual obstacles to closing the sale, by this stage they are bought in and should help you trim these obstacles too.
Page 211: You can select who your customer is, it can be your direct customer or the end customer or any customer in between.
Page 220: Often people don’t trim a negative branch because they think that the injection required causes more trouble than it is worth. However this is normally not the case, often although the injection causes more negative branches they can be trimmed more easily than the initial branch.
Page 235: How to construct a Prerequisites Tree:
1. Start with an objective.
2. Raise obstacles about why the objective cannot be accomplished.
3. Work out Intermediate Objectives to overcome all of the objectives.
4. Organise Intermediate objectives into a logical tree, working out which parts must be done in series and which can be done in parallel. (Like a project management network diagram)
Page 273: Three necessary conditions for companies:
1. Make money now as well as in the future.
2. Provide a secure and satisfying environment for employees now as well as in the future.
3. Provide satisfaction to the market now as well as in the future.
Page 282: Strategy principles:
1. Segment your workforce across segmented markets.
2. Even if you are dominant in a market, do not take the whole market.
3. Only enter segments where there is a low risk that they will drop at the same time.
If you do the above you can ride the s-curves, as one or many market drops you can move your people to new more lucrative markets that you have not yet fully exploited, that way you will not have to layoff employees.

Quotes:
Page 169: “In order to drastically change the perception in the eyes of the market, [you] don’t have to upgrade the physical product. [You] can change the periphery, the section of the offer that is not the product itself. And this my friends can be done with almost no investment and very quickly.”
Page 185: “A product that relieves the prospects problems brings benefits – the more and bigger the problems the greater the benefits.”
Page 186: “If we want a marketing solution for our company, we shouldn’t analyze our company, we should analyse our company’s markets.”
Page 272: “You can fool a few customers for a long time. You can mislead many customers for a long time. But you cannot mislead many, for long.”
Page 275: “We shouldn’t ever build a strategy based on a market forecast.”

Book Notes - Critical Chain

Critical Chain by Eliyahu Goldratt [1997]

Summary:

Key steps to improving project management:

1. Cut safety out of individual process steps

2. Redistribute safety into a project buffer

3. Identify the critical chain (longest list of dependant events)

4. Add feed buffers to the non-critical paths to protect the critical chain

5. Monitor the progress closely and focus on the steps that will impact the project buffer

6. Look for resource contentions, if there are any resource bottlenecks; schedule and buffer them like you would a manufacturing bottleneck.

Other key notes:

The cheapest option is not always the best, pay for focus and reduced risk.

Create unrefusable offers for your suppliers or customers (See Its Not Luck).

Notes:
Page 11: "teaching by open discussion" How is it possible to do this in all situations? Can you predict adequately where the discussion will go? How do you prompt people in the right directions without giving the answers? How do you keep classes to time?
Page 24: The Golden Triangle - Cost, Time, Quality OR Budget, Time, Features.
Page 25: U2 project as an example of something that beat the golden triangle.
Page 37: Common causes for delays;

· Unrealistic timescales to start with

· Forced to chose the cheapest vendors

· Key stages started too late

Page 41: Managing projects is all about managing uncertainties in terms of timescales, costs and specifications, risk management and planning.
Page 44: How long does it take to get from A to B - tailed distribution, shortest possible time to do anything is zero, longest possible time is virtually infinite.
Page 45: What is a persons objective in a project? To be considered a reliable person. Therefore they will never budget the median, it means they have a 50% chance of being seen as unreliable. On the other hand if they finish early they can always pad the work to fill the time to the estimate and still be seen as reliable.
Page 90: You can cut costs in any department and impact the whole (make the chain weight less) but you can only improve the throughput in the weakest link (make the chain stronger). Cost cutting projects can be focused anywhere, capacity increasing projects should only be focused in the constraint. However cost cutting projects should only be undertaken once the throughput is met.
Page 92: look for policy constraints in the business.
Page 97: There are no compromises in the accurate sciences. If one person measures something at 20g and another person uses a different method and gets 30g, they don't decide it must be 25g. One or both of the methods must be wrong, they cannot both be right.
Page 98: Conflicts are the result of faulty assumptions, if there is a conflict there is always an assumption that can be challenged.
Page 124: Student Syndrome; we fight for extra safety time only to the waste it.

Page 126: The evils of multitasking; the lead time is extended for each step even assuming that there is no negative impact due to having to get up to speed with the individual parts again.

Page 172: Three steps to getting a project back on track:

1. Persuade people to cut lead times

2. Remove Milestones for individual tasks

3. Frequent reporting of lead times and issues

Page 218: If there are resource conflicts (constraints) the Critical Path becomes the resource therefore you must buffer the process steps after the resource constraint.

Page 235: Identify the resource constraint for the whole programme and schedule that resource like you would schedule a production constraint, base the other projects (start and finish) around the constraint and insert a “bottleneck buffer” to protect the resource.

Page 242: Dollar-Day investment strategy instead of payback period or NPV, don’t fully understand, try listening to Beyond the Goal and coming back.

Quotes:
Page 8: "Smart people learn from their own mistakes, wise people learn from the mistakes of others."
Page 38: "The lower the level of the person the more the finger points internally rather than externally."
Page 40: "Uncertainty is what typifies projects. It is the nature of the beast."
Page 62: "Companies are so immersed in the mentality of saving money that they forget that the whole intention of a project is not to save money but to make money."

Page 121: “A delay in one step is passed in full to the next step. An advance made in one step is usually wasted.”

Page 188: “The probability of a piece of bread falling butter side down is directly proportional to the price of the carpet.”