“Success in solving the problem depends on choosing the right aspect, on attacking the fort from its accessible side.” (George Polya)
In physical terms, a single blockage of a key artery can lead to a heart attack and the death of an otherwise healthy individual. Some years ago, James Fixx, a leading authority on jogging for physical fitness, one of the top runners in America, in Olympic condition, dropped dead of a heart attack while running at the age of 52, because of a single piece of plaque that came loose and lodged in his heart.
In every respect, James Fixx was one of the healthiest and fittest human beings on the planet. But one blockage was sufficient to end his life. This same principle applies to businesses, careers and personal life as well. One fatal flaw can cost you a lot, if not everything.
Identify Your Limiting Factor
In your business, for example, there are almost always critical constraints or “limiting factors” that determine how fast you achieve your goals. Not only can a constraint slow you down from achieving the sales and profitability that you desire, but a serious constraint can bring your business to its knees.
Identifying what is holding you back, and removing it, can help you to achieve your goals faster than almost anything else you can do. Once you learn the art of constraint analysis, you can use it for the rest of your career.
Follow the Formula
You apply the process of constraint analysis to your business by following certain steps. First, you decide upon your specific business goals. Make them clear, measurable, and time bounded. Second, you then ask yourself, “Why am I not at that goal already?” What is holding you back? What is the constraint, chokepoint or bottleneck that sets the speed on how fast you achieve your specific goals of sales, cash flow or profitability in your business?
Let us return to my earlier question, “Would you like to double your sales and double your income?” If your answer is “yes”, then why haven’t you done it already? Why aren’t your sales twice as high? Why aren’t your profits twice as high? What is holding you back? What is constraining you? What is the limiting factor?
Bottlenecks Exist Everywhere
In every complex activity, from the production process of a huge factory to the job of getting from home to work in the morning, there is a limiting factor or constraint of some kind that determines the speed at which you achieve your goal. This bottleneck or chokepoint determines how fast you get the result you desire, and often the success or failure of the entire process. The elimination of a single constraint can so vastly speed up the rate at which you get the results you desire that it will amaze both yourself and everyone around you. One of the most important strategic thinking exercises you engage in is constraint analysis, learning to identify and focus on the one activity that can help you achieve the desired result faster than ever before.
Internal Versus External Constraints
The 80/20 Rule applies to constraints. Fully 80% of the constraints or limiting factors on your company’s ability to achieve its goals are internal, not external. Fully 80% of the reasons why you are not doubling your sales and doubling your profitability are inside your organization. Only 20% are outside in the external marketplace or caused by external factors.
These internal constraints may be contained in the work process itself. Perhaps it needs to be revised partially or completely so that it functions faster and more efficiently. The constraint to business growth could be the lack of a particular person or skill. Sometimes, the addition of one highly competent person in a particular area can transform the results of the whole business.
Incompetence As A Constraint
The reverse might also be true. The constraint might be an incompetent person in a key job that no one has the courage to confront or remove. It is amazing how many businesses get into serious trouble, or even go broke, because of the unwillingness to deal effectively with an incompetent person.
Your constraints may be a lack of sales or marketing ability. You may have a good product or service but you don’t have skilled people to sell it. Many companies go out of business for this reason alone.
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