So What Is Your Biggest Constraint?

by Jay Deragon on 09/26/2013

weakest_linkAsk any business leader what their biggest constraint to progress is and they simply could not tell you rather they will tell you a host of issues holding things back. Their answer to the question represents the real constraint.

The biggest constraints in organizations is how the organizations deals with constraints.  There is no one problem causing the constraints there is a series of inter-related problems. However, treating each problem, or solution, interdependent of each other is in fact the biggest constraint to progress. Oh you say, Companies don’t do that anymore. Really?

You don’t have to look very far to see companies chasing solutions that end up creating more problems than the original problem that the solutions were supposed to solve.  The latest solutions being chased include  all things labeled with “social, digital, innovative or next generation”.  It is like the God’s of business wisdom concocted a new “social drink” and organizational leaders are standing in line waiting to drink from the fountains of transformation promised by wise men, and women, who came in with their disciples preaching a new social business gospel. The problem is the social gospel won’t save a company with the wrong beliefs.

 The Wrong Beliefs Are The Biggest Constraint

Modern business leaders have a tough job. They have to create innovative products that delight customers. They have to adopt breakthrough technology. They need great marketing. They’ve got to manage complex supply chains. And they run in highly competitive global markets. And most of all they have executive management teams that are in charge of everything and everyone.  They believe that kind of structure is good for the stockholders and the stakeholders. See the constraint yet?

The reason most companies can’t remove their biggest constraints is most executives, or the entire Board, are not likely to look in the mirror and say, “I am the constraint.”  Thus the biggest constraint, a belief in a lie, remains and nothing changes because no one has the power to change anything until the company is being flushed down the toilet…J.C. Penny sound familiar?

You see, companies are run by people who believe certain things. Whether stated or not the belief systems of a company is that intangible thing that drives everything. In the United States most executives believe they are entitled to lead and their wisdom is what keeps the organization alive.

Beliefs create culture. Culture perpetuates human capital. Human capital enables creativity, value creation and strategic capital. Strategic capital fuels the possibilities that increase relationship capital with markets.  Relationship capital is scaled with the right structural capital. Human, strategic, relationship and structural capital are all components of intangible capital. Such things are the things that create all the meaningful value in the 21st century. Most executives do not pay attention to these critical components. The winners in the 21st century do!.

Now, some management consultants love to talk about all sorts of neat concepts like competency, strategy, performance, vision, planning, effectiveness, core values, execution, company culture, and change management. They’ve got all sorts of jargon, buzz words, and management fads.  However few, if any, will have the guts to tell the CEO that his/her beliefs are the biggest constraint to the organizations growth and prosperity.

I wonder if the big and even smaller consultant firms would dare say such a thing to the hand that feeds them.

{ 2 comments }

Jeannette van Dongen September 27, 2013 at 5:12 am

Jay,

Your article is spot on.
In Europe we have a fine tradition of works councils and social dialogue to improve the communication within the company directly with the leadership.
Many times very brave members of a works council have started an open dialogue with the leadership on the very issue you address.
The different results in response by the leadership shows the answer on the question that also Matt presents.
Leadership with no fear, or should one say with no ego limitation, embraces the open dialogue and has a focus on development. The leadership that gets angry and emotional is also the leadership that limits the company and has only got a focus on costs and the economical crisis.
The European possibilities of employee involvement could also be interesting for American companies. So far American leadership is not very amused when they encounter the system of works councils and social dialogue with trade unions. In a way it is a practical answer to the challenges Joyce also writes about in his book Megachange.
Maybe leadership needs to learn that labour relations have changed and free innovation and new ideas are many times available inside the company, they just need to listen a bit more. Constraint in my view is pure fear.

Jeannette van Dongen

Matt Alston September 26, 2013 at 7:37 am

Jay,

For the last 15 years as a business development consultant it has been my approach to sit down with the Ceo/ owner and ask them very directly;

“The limit on the amount of growth and change your organization can achieve is the amount of growth and change you are willing to go through yourself. Are you willing to change yourself first?”

The range of answers to that have been diverse and the depth of commitment varied but it sure puts the cards on the table right up front.

I my career to date it has been my opportunity to guide and manage 12+ reorganization / change management projects brought about by merger and acquisition activity. The impact of keeping the team, product, staff, and market while just removing the executive management team and replacing it with another is a graphic example of how the beliefs of the executive team frames and constrains the entire organization. This opportunity allowed me to demonstrate how removing these constraints was able to generate 100%+ increases in results.

Yet here we are in 2013 with American management still running companies with the same management technique that was developed at the beginning of the industrial revolution over 100 years ago based on command and control for compliance.

The real constraint is beliefs and experiences about why they are there. If you want to know why this happens it requires looking at what motivated them to get into this position of control in the first place. If they are given a choice that will significantly grow results, but they have to give up some control over how it gets done, will they let go and allow the result to take place.

My strategy starts with building trust, trust leads to teamwork for the right reasons, and fully functioning teams generate synergy where incredible things happen. That first step of building trust is where it most often dies.Compliance based top down authority models do not build trust effectively because compliance is the opposite of trust.

Matt Alston

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