Context: I watched Elliot write examples of writing questions on stream a couple of days ago. I tried to ask more questions while reading this article and Optimize Limiting Factors. I rewatched it today and managed to write lots more today. I think I raised my standard for what I consider understanding. Often I will read and I’ll think “i can see that” and “I agree”. But those doesn’t really mean I understand something. So I tried to question more and try to explain for myself more as well. I think the stream examples were useful. Maybe I should dig up those emails and try to answer them myself.
Cost accounting is based on local optima. It’s a bad approach for big, complex organizations that are trying to work as a synchronized team.
So Goldratt says companies shouldn’t keep track of every little cost they spend? Should they only keep track of what the expensive machines they bought cost for example?
Isn’t cost accounting useful to figure out where to cut inefficiencies? How does TOC handle cost cutting? Don’t we need to know the cost of things in order to know whether they’re profitable?
Now we have much better data and communication using computers and other technology, so we can and should pay more attention to global optima.
What type of information could that be? And what type of action could be done instead of cost cutting? Are typical ones about like: shipping buffers to plants that need it, which plants need rapid replenishment of buffers, taking advantage of high demand for a product so you would spend more producing per product but you earn more because of larger volume?
Directly state a conflict. Then consider the assumptions behind each side of the conflict. At least one is wrong. There are no inherent conflicts of interest. Apparent conflicts of interest are caused by incorrect assumptions.
Does resolving apparent conflicts of interests often mean that at least one person has to lower their standards. They still win from the win/win interaction but not by as much they first had hoped for?
I can imagine one person having unreasonable desires which would require sacrifice of someone else, but in reality they can’t actually fulfill those desires. Either the best thing for them would be to not interact or an interaction where the guy gets not as much as he originally hoped for.
Also directly state the common purpose that both sides share. This helps figure out what assumption is wrong. There’s a mistake somewhere, otherwise people with a common purpose wouldn’t be in conflict.
The theory doesn’t say whatever people subjectively desire never are in conflict. It says that people’s interests are objective. And their true interests are to mutually beneficially cooperate or not cooperate. But it’s never in their actual interests for any party to sacrifice or compromise.
Stop compromising and thinking there are no solutions. Accepting compromises is a huge obstacle to finding great solutions.
Compromising means not figuring out the win/win solution, that would be missing out. We would miss out on knowledge we could’ve created.
Figuring out the win/win solution means creating knowledge. With new knowledge both participants are likely to change their opinions. Changing their opinions is not compromising. Compromise means going along with something you don’t think is good or not the best option. When a win/win solution is found both parties now think it’s in their best interest.
Maybe I’m wrong about both thinking it’s in their best interest. Maybe just a pretty good solution is good enough for both parties. Maybe compromise is strictly going along with something you think is a bad solution.
When you focus on the important less than 1%, then the situation is much simpler and you can find a simple solution.
Why does that make the situation necessarily simple? Sure, less stuff to deal with is simpler, but can’t the 1% be a really complex thing? Can’t it be the most complex percent of the system?
They should look for simple general principles and simple solutions.
Can we always look for general principles? Don’t some situations require specific solutions. Aren’t specific solutions sometimes quicker and all we need?
My guess is that Elliot is talking about complex systems. And in order to actually deal with complex systems you have to use general principles, otherwise it’s too complex.
Complex “systems” where there are no general principles are chaos. Chaotic systems means we can’t really deal with them. So we should rather avoid them.
Simple situations could be solved with simple specific solutions. Specific solutions are too difficult in complex systems, but can work fine for simple situations.
“What is the minimum number of points you have to touch in order to impact the whole system?”.
So that would be improving a bottleneck and thus increasing the throughput? Or is “whole system” more like saying it lets the other stations work at higher capacity, not just talking about the throughput?
He says they’re often a better way to look at complexity than counting the number of elements.
So complexity would be about what you need to change in order to make an impact on the system. You want to achieve a goal through a system. How many things do you need to change and how difficult are they to change is the complexity of the system.
If many elements are dependent on one other element then we can just focus on that one element. It doesn’t really matter how many elements are dependent so long as we only need to think about that one element.
You’re smart enough
Don’t lots of people Elliot have talked with have too low skill level in logic, grammar and other things in order to make progress?
Intuition is valuable but underrated by people trying to be “rational”. However, verbalizing ideas (putting them into spoken or written words) is also valuable and underrated.
Is verbalizing not the same as fully explicit, reasoned and developed ideas? Is verbalizing explaining more of your intuition whereas developed ideas includes answers to criticism and implications? I’m saying explaining your intuitions could involve some peculiar stuff about you whereas developed ideas are more about the abstract properties of the idea.
Don’t give up and compromise. Don’t make excuses like blaming others.
How does this relate to being smart? Is because being smart is solving problems and blaming others stops problem solving?
Aren’t people irrational sometimes, or often even? You can’t force them to do the correct thing (and you shouldn’t want to) and lots of people are not very receptive to reason. What can you do then? Must you not just give up then?
We’ll be able to create unifying, simplifying theories when we learn more.
Aren’t General Relativity and Quantum Mechanics more complex than Newton’s Gravitation theory?
Goldratt talks about this most in The Choice. You can also read arguments against inherent conflicts of interest between people in my article on liberalism or in Ayn Rand’s article The “Conflicts” of Men’s Interests.
I find it impressive that Goldratt understood conflicts of interest while not being a moral or political philosopher. Or am I underestimating the degree to which Goldratt was a moral philosopher?
Which liberal philosophers before Rand said there were no conflicts among rational men? Did they say it not as strong as Rand, something like: “in general there is harmony among men’s interest, it’s good enough to build a society around”?
I think it’s a pretty unintuitive and difficult idea. I certainly need to study it more.