S4 E16 - Angela Montgomery - Integrating Deming and Goldratt for Organizational Transformation

In this insightful episode of the Profound Podcast, I speak with Angela Montgomery, co-founder of Intelligent Management and author of the upcoming book, The Human Constraint. Angela shares her unique journey from a background in arts to collaborating with physicists. The conversation delves into the artificial barriers within organizations, the importance of systemic thinking, and how integrating Deming's System of Profound Knowledge with the Theory of Constraints can drive meaningful change.

Angela highlights the critical differences between bottlenecks and constraints, emphasizing the strategic value of identifying and managing constraints to enhance organizational flow. She also discusses the challenges of adopting a systemic approach in traditional hierarchical structures and the role of mental models in limiting or advancing organizational potential.

Through practical examples and narrative, Angela illustrates the transformative power of the Decalogue Method, which combines scientific rigor with literary storytelling. She also touches on her collaboration with renowned playwright Donald Freed to ensure the book's narrative is engaging and accessible.

This episode is a must-listen for business leaders and practitioners interested in continuous improvement, conflict resolution, and embedding innovation into daily practice. Angela's insights offer a fresh perspective on leveraging systemic thinking to achieve sustainable organizational success.

Transcript

John Willis: [00:00:00] Hey, this is John Willis again, on the Profound Podcast, and I get, you know, I just love doing podcasts because you get to meet, you know, really interesting people, and, and this is going to be a really interesting podcast because it's somebody I've sort of known for a while, you know, just through correspondence, and then we're going to talk about her, like, I think, fabulous new book that's coming out, so, Angela, you want to go ahead and introduce yourself?

Angela Montgomery: Thank you very much, John. And I'm really happy that you enjoyed the book, especially as you are a renowned author in this field. So it's, it's a great, it's a great opportunity to meet like minded people. I am Angela Montgomery, co founder of Intelligent Management with Dr. Dominico Lepe that you interviewed on the podcast a while ago.

and Dr. Giovanni Siete, and we are a [00:01:00] consulting firm that works with organizations who essentially want to overcome a situation of blockage and do fundamentally more than what they're currently doing. So the interesting thing there is that I find myself working with both Domenico and Giovanni, who are physicists.

And I, in fact, come from an arts background. So I studied literature and also went to drama school, worked in theater. But through conversation with physicists, as I had met several friends who were scientists We got talking about author Samuel Beckett and theory of relativity, and that set me on a whole new path of research.

Five years later, I had a PhD in literature and science. But what was interesting there was the idea of artificial barriers in this case between art and science [00:02:00] and When you take that into the field of organizations, then we all know that there are plenty of artificial barriers that don't need to be there silos.

And so I find myself working in a field we also over the years developed a methodology which is called the Decalogue Method. 10 step method for transformation working with a team over the years of physicists, mathematicians engineers, philosophers we came to the conclusion that these 10 steps, and we were able to test them in many, many different environments, are a solid path for transformation towards An organization as a whole system.

 So that is the field that I work in. I I'm a Londoner of Scott informed parents. And now can, I am Canadian. I lived in London, Milan, Brooklyn, Toronto, Victoria, bc but now I live in [00:03:00] Ottawa and I. wrote this book, The Human Constraint, which is set in USA, Canada, and Italy, which are countries where I've lived in, in order to tell stories about implementations of the decalogue method, because I was witnessing over the years a pattern.

of events. And I wanted to capture that because I wanted people to be aware of this incredible potential for transformation through a Deming and a Theory of Constraints approach, and also the problems that arise when we engage in the effort of transformation, which is not an easy sport. 

John Willis: Yeah, no doubt.

You know, it's interesting you know, I, you know, I'm not as expertise as in, in Goldratt, you [00:04:00] know, I won't rehash my story, but my good friend Gene Kim was writing, Halfway Done was a book that was going to be a modern day, it's a Phoenix Project, a modern day rewrite. And before he would give me a copy, like he, it was actually a gift.

He said to me, he said, no, I really need you to , read this book before you read mine, you know, and it was like, you know, four versions from what the final was anyway, but, but it was a gift because I think, you know, if I would have read him in the opposite order, I would like, like, I wouldn't. I wouldn't have had the sense to even get to where I was with Deming, but you know, the, the, the thing is, is, you know, I, I, the story was I read the goal and I'm like, who is this guy?

Okay. And I think I read it. Not luck and it's critical. You know, I, I, I consumed a bunch of those books and And, I've read a few over the years, and then there's the Phoenix Project, and there's some others, you know, there's quite a few, like, other authors who sort of follow that "Goldratt-ian", and I call "Goldratt-ian" style [00:05:00] of, you know, like, storytelling, you know, and I don't recall any of them, of those sort of novels.

Including Deming as a citizen in the story. In fact, I don't think I recall him being mentioned in most of the books. And so I, I opened up your book and it should have made sense to me that, you know, of course, based on a decalogue, right? Like, that, you know, that was the sort of only book I think out there that's actually really talked about the two and how you and like my heart, like, Jumped, right?

Like, Oh, like Deming is a first class citizen in a "Goldratt-ian" style novel. This is great. So and it all made sense to me later as I thought, of course it would, it would be. And, but I think that's like, I want to drill in on that. Cause that is the sort of like beauty is. You know, when I started getting Goldratt, which was like 10 years ago, right, and, and I couldn't understand why, you know, nobody else was talking about, like, how these two [00:06:00] overlap, because I got into Deming from Goldratt, 

right?

And so as I you know, I, I was wondering, like, why, you know, they're really so like, I mean, they fuse, like you've done brilliantly, you know, the TOC and System of Profound Knowledge, right? Like, yes. 

Angela Montgomery: Yeah, I think that obviously the goal is the inspiration for this business novel, because without the goal and it's not luck and critical critical chain, We wouldn't have the idea of presenting what is essentially management science through narrative, but because of my literary background, I just couldn't resist the temptation of having all this material, all these case histories, and all this human experience of working with these approaches, which are.

scientific in their basis, and both Deming and Goldratt were physicists like Domenico and Giovanni, so there is that [00:07:00] shared background. And I also, I, I couldn't help feeling that these stories needed to be told or written in From my perspective, in a way that was a little bit more literary, in the sense that, a little bit more of quality narrative.

And I was very fortunate to be introduced to Donald Freed, who is a renowned American playwright in Los Angeles, and he mentors writers. So I was really lucky to be able to go to his home and Oh, I'll be part of his workshop where there were as he's in Beverly Hills. It was a really interesting group.

And and then at distance as well. So I wanted to make sure that the story was fast paced and kept people's interest. So it was wonderful to have his insight into, you know, how to be able to achieve that. With the story that I wanted to tell. But Deming is actually where we start. Because it was back in the [00:08:00] mid nineties that Domenico who was at the time tasked with designing courses for smaller medium enterprises in Milan, Italy.

 He on quality, which was something that at the time was new to him. So he started reading, Deming started. studying Deming and got completely immersed in it and enamored of this body of work as a scientist and developed the very clear idea that this was the way to help companies really make a jump in performance.

While he was doing this work, he was introduced to the theory of constraints and had the brilliant intuition that you can actually, you know, Do Deming, in inverted commas much more effectively through the theory of constraints. Because everybody loves Deming and they find him inspiring, but try and do it.

You know, practically in a company, and [00:09:00] through the implementations of the theory of constraints, we found that we could accelerate that way of absorbing the idea of a company as a whole system. a common goal and having a constraint was the focus point that really helped that to happen. So that was the innovation that our company was able to introduce was a complete way, a method of actually achieving that.

John Willis: You know, there's so many places I want to go here now, but the, well, first let's let's mention the name of the book and then we'll definitely come back to it, you know, cause I think all the other questions I'll have will tie, you know, anybody who's listening, who listens to this podcast will immediately get, but it's the human constraint, right.

Which is sort of a brilliant. But the thing, I guess, you know, you, you hit on something that's really interesting, which is that, you know, you know, I, well, I fell in love with Goldratt first, right? Like, it, like, I [00:10:00] felt like it was part of like, who is this guy? How does he understand me so well, everything I'm doing, and then I got sort of navigated into Deming.

It was sort of a backdoor, right? Somebody came to me and at a conference and said, you know, hey, John, it all goes back to Deming. I'm like, no, no, man, like this Goldratt guy. He's great. And then I, he challenged me to just look at Deming's 14 points, which is just a surface level view, but. How did this guy understand what we think is brand new in DevOps?

It's like but, but, but the common thing I hear, you know, system profound knowledge makes so much sense. Like I, you know, read your book and like, and like, I know it makes so much sense to you. Anybody who's, you know, like in, in Jerry Maguire, you had me at systems thinking, right? But I guess the thing that pops up a lot, especially people who sort of go back, this just happened the other day.

Somebody said to me, why did You know, Deming was so popular in the 90s, but why did it just fail or why did it not [00:11:00] like adopt? Why didn't we have the adoption? and and to me like it sort of twists my brain because I think anybody who Thinks about system through epistemology and system thinking right and everything in between like how could you not?

implement that in a way. Like all you have to do is sort of spend a little time understanding those two, at least the two, you know, variation obviously and, and psychology. But I, I, that, you know, you just pointed out something like, like, I guess it is hard for people to implement. System of found knowledge or new economics, right? 

And, and so I guess the first part is like, why and how come and I totally get the constraint, right? That's I grew up on this, this management science on, you know, understanding the constraint. And, you know, I mean, I worked that through Gene's book, right? And he does a good job. Like, but why, why do people have a hard time understanding what I think you and I or your husband and most people who spend the [00:12:00] time to peel the onion on this stuff have a hard time implementation of that?

And why? And I guess part Why, why do you need the constraint to make it happen or, you know? 

Angela Montgomery: Yeah, and well, I think there are several things there. Deming never created a school as such, right? Where people could go and be educated in this. And very sadly, neither Deming's work nor the theory of constraints at taught in business schools.

So it's completely alien to the majority of people who go and get an MBA so that they. think that that's their best way of getting on in the world. And therefore, the kind of not, the kind of teaching which is really antithetical to this systemic approach is what is perpetuated, what makes money, what is then the continues to be the, the cash cow, as Dr.

Goldratt pointed out, of many universities. So why would they ever want to change that? So, The major problems, I believe, [00:13:00] when it comes to introducing a systemic mindset comes down to the fact that it doesn't mesh at all with the kind of measurement system or the kind of organizational design that most companies have.

So If you are in a large company, inevitably you are going to be built into silos, you're going to be in functions, you're going to be not allowed to work in a way which is the way that Dr Deming taught us, which is the organization viewed as a system where everything is based on process and flow, which is the most effective way of transforming an input into an output, which is what any company essentially does, right?

 They, they just don't see it because they're so blindsided by the fact that they are kept in their boxes and in a traditional hierarchy. So the traditional hierarchy doesn't encourage you to to think systemically, encourages you to think of your career as a ladder [00:14:00] that you go up, not as an expansive activity or one that is based on a different vision of not just companies and business, but a worldview which is not based on just the individual.

It's based on the big picture. Where do we all fit into this? Where do we fit into society? How do we build a society that works for everyone? If we are instead stuck in this zero sum game mentality, which sadly today still predominates, and we're seeing worse and worse effects of that, then trying to introduce a systemic worldview is difficult.

Add to that that then you have accounting methods, which don't like the idea of things being measured systemically. They like things to be broken up into pieces, because the illusion is that if we break things down into pieces and into segments, we have more control. Missing completely the [00:15:00] point of what system science has been teaching us for decades now.

So, in other words, there's a whole new body of knowledge which came in from the 70s, the 80s, a new mathematics that came with Mandelbrot's fractal mathematics. These are all teaching us that Reality and nature is not the way we thought it was up until not that long ago, and which we still just relied on a Newtonian way of understanding interactions, we now live in a world that we understand is.

immersed in complexity, which means that multiplicity of interdependencies that we're all part of. If we don't learn that and we don't absorb it, then we really struggle to find a better way. The better way exists, we believe, and that's what we've been dedicating the last almost 30 years to, is to bringing this to companies. 

It's just a struggle to make this voice heard when people are [00:16:00] still looking at the wrong measurements. And looking at a career path, which is based on individuals and individual progress, which is not part of, seen as part of a whole. 

John Willis: That's, yeah, that's brilliant. You know, it's like, again, it's, I think you said somewhere in the book, I was trying to find it and I couldn't before the call, but like something about like innately as humans, we know these principles are correct, but we can't seem to like exercise them in a way.

 Yeah. And I think but I guess the second part, the second part of that question I, I'm thinking is really the core of sort of intelligent management, right? Which is that, you know, like that you, that you've decided that this way to understand the constraint and how to work through the constraint evolves into the full practice of what we would call system profound knowledge or 

Angela Montgomery: Yes, absolutely.

 In an organization that decides to adopt [00:17:00] this approach and work systemically and have all the incredible benefits of that. We identify a constraint, not a bottleneck, a constraint, which is a strategic leverage point in the company. And by having that focus point. We can carry out all the the things that Dr.

Deming taught us, all the concentration on mapping out the processes mapping the interdependencies, lowering variation, but we have a focus point that makes that work so much more It's never simple, but it does make it more focused. The issue that we bump into, obviously, all the time, and that's why I called this book The Human Constraint, is something which is both a limitation and an opportunity, and that is essentially how we as humans live.

So we live within this world. incredible paradox that we allow ourselves to be artificially limited [00:18:00] by a set of mental models and assumptions. And that leads us to live within a reality, which is not ideal, but it's what we feel comfortable with at the time. For the time being, but we also have the possibility to leverage that limitation and expand our horizon of what we are able to conceive and achieve.

Continuously, and thanks to Dr. Goldratt, we have actually a method to be able to do that. So, we can be, we can choose to be limited by the way we organize work, the way we measure work, the way we measure people, the way we make people work. And this is a huge topic for HR because which we've been working with just recently here in Italy.

The the, the, the task of HR is becoming more and more difficult. The more people change what their expectations of work is. They no longer want [00:19:00] to work in the way that people did in the eighties or the nineties, you know? How do you reconcile that with a traditional style of organization, which is top down and which sees the individual as a, a, a part and not a a as, as an individual or instead of part of a much bigger whole.

John Willis: That's you know, that's another interesting this could be a three hour podcast if I'm not catching. It's interesting that there's sort of a back pressure now that, you know, fingers crossed, could actually be creating the opportunity to force organizations to think differently. The HR one is great.

There are so many, like, you think about, like, not just remote work. The hierarchical structure seems to, doesn't work. I mean, even the new AI stuff is sort of changing, like, how, what a role is. The, I, you did say something, though, and, like, I guess I'm feeling guilty that I don't really, or I either understand it or sort of a little confused.

You emphasized the difference between a bottleneck and a constraint, and I could say why [00:20:00] listeners probably would be confused, but I'd have to admit that I'm, you know, I can't sort of get in my mind why you made that emphasis. 

Angela Montgomery: The bottleneck is something which you, you don't necessarily want to have.

It's something which slows down a process. So in terms of machines or flow of machines it's something that you that is causing a, a, a, a slowness in the flow. Okay. But a constraint in looking at the organization as a whole is something that we can use, we can choose it, we can look at the company and say, what is the area of activity? 

That we want to choose as our leverage point. Where do we think that most of the greatest value is perceived by our customer? And once we make that choice, then we organize everything else around it in order to [00:21:00] subordinate to that constraint. So we, it becomes clear in the mind of everybody in the company what they need to be doing because it has to be helping the constraint.

John Willis: I knew I understood the difference, and then I just, when you said that, I immediately went to, because I've been, I've been writing about like Asprey's Law, and, and obviously feeling like Asprey's Law, which was all, and, and, you know, Harding's, you know, tragedy comes, like, it's all about creating constraints to enable flow.

Speaker 4: So 

John Willis: I think what you're saying is, like, that, you know, like, I, I got sort of stuck in an old mindset about, like, a bottleneck constraint, aren't they the same thing? And, and no, the constraint actually can create flow. So they can be a part of it. So, and then I'm reminded of the Goldratt about finding, so it, you know, it, it like to create, you know, sort of better, or, you know, optimize systems.

I guess the idea is looking at the constraint as the opportunity, as the 

Angela Montgomery: Exactly. 

John Willis: Brilliant. 

Angela Montgomery: Strategically British point. 

John Willis: That's right. That's right. [00:22:00] That's right. Like for whatever, how you sort of subordinate this. Like, that's really good. You know, I, I think we've been around this a little bit but I, I, you know, I think I've always been amazed that And this is sort of question and statement.

So like if you sort of disagree or had some that one of the things I found really interesting is I was studying a little bit about systems thinking before I got into Goldratt and Deming, right? Complexity, right? Because if you're in IT or anything, but certainly everything is a complex system. And, and then I, you know, I'm going back and I'm reading some of his stuff Deming's stuff and, you know, you clearly get it with Goldratt, like this is why I fell in love with him, you know, this sort of, you know, you know, global optimization over local, all that stuff, right, the understanding, the constraints. 

But then like you look at Deming and literally, you know, if you sort of read his Harkani speech in 1950, where they said, what, 80 percent of the controlling wealth in Japan is in this room. And if you sort of read that a [00:23:00] couple of times, the transcripts and that, it's all about systems thinking, and it's 1950, and I don't think, you know, like, this is where I may be wrong, but I start thinking about the real science of complexity You know, the stuff that sort of became sort of for the every person understanding was like in the late 60s and early 

70s.

This guy was, he understood this. And then like, to me then it becomes like a fundamental, like if you asked me, I've had CEOs or CIOs, sorry, ask me, you know, John, you know, we're just at, you know, and I'm like, you know what? And the type of CIOs who I believe can take this kind of knowledge and not just, you know, like they're, they're thinking is they're calling me for.

John, I've got this thing. What do you think about this? Right? So I'm like, you know, I wouldn't say this to any potential CIO client, but if there was one thing I was going to do in my organization, I would create a systemic, a plan to create systemic [00:24:00] understanding of system thinking. In the organization, there's one thing to do.

And I, you know, I, and I, you know, I do think that, you know, the, the theory of knowledge is very important, obviously variation, psychology, but it seems to me, boy, you can start with so much around, you know, systems thinking and our systems view of sort of your organization or the world. 

Angela Montgomery: Absolutely. And the CIO is in a unique position because they are one of the few people that has the end to end vision of the of the company.

We've actually written quite a lot of stuff about that because we do see the CIO as a really key person. They should be in the C suite making, they should be informing the business because they have that, that, that, that, knowledge and they have that overview. Systems thinking is something which not everybody agrees about.

So I personally prefer to talk about systemic thinking, because if we start talking about systems thinking and then some [00:25:00] people say it's this or it's that or I think that Dr. Goldratt's massive contribution to humanity is this, the creation of the thinking processes. They are a systemic approach to thinking.

And just today I came across this fantastic quote, too late to put it in the book, unfortunately, which is from Niels Bohr. And he says, no, no, you are not thinking, you are just being logical. And I love that quote because If you look up the thinking processes on the web, you'll find a lot of people talking about them as logical tools.

In fact, The logic which is in the thinking process is not the kind of mathematical algebraic logic that people think about. It is something that we came to learn about thanks to a private conversation that Domenico had with Dr. Goldratt. So Domenico asked him, physicist to physicist, you know, what do I need to do [00:26:00] to really deepen my understanding of theory of constraints?

And Goldratt's answer was completely unexpected. He said Go to your rabbi and study the Talmud. So at the time, Domenico, you know, grew up in Italy, had no clue what he was talking about. But that again was one of those. event, life events that set us on a whole path of learning that we never imagined would have happened.

And so we started to look into this. What did that mean? The whole cultural background that Dr. Goldratt's knowledge comes from his family background, his the, the, the kind of studies that he would have done, not just of science, but of the Talmudic background and Talmudic thinking is something which has been around for centuries.

And as he put it, you know, scientific thinking is a baby compared to [00:27:00] this. So the thinking processes are a systemic, they teach people to think systemically, but they go well beyond what people call logic, because thinking is only partly logical, there's very little rational about humans. And that's the other reason why I wanted to write the novel is because, you know, people think, I used to think that the world of business, because I was in the arts, and the world of business, it's rational, people make decisions with numbers.

And, and then you discover that there is so much that is connected with emotion, with personal circumstances that influence the decisions that are made. And, So, Dr. Goldratt has created a method for harnessing our emotions in a positive way towards making really important transformative decisions that can be completely transformational or they can be [00:28:00] used on a more day to day way.

But they invite us to And they guide us in a structured way to elicit what the mental models assumptions are that we are making it around any situation where we need to make a decision or solve a conflict, and, and they guide us. To to use those emotions and mental models and challenge those assumptions so that we can come up with breakthrough solutions and new ways of seeing things.

And what we realized through our, we were very fortunate in New York to study with the, some of the best in Pacific philosophy. And the three phases of what to change, what to do, what to change to, and how to make the change correspond with three Aspects of the intellect, which in Hebrew are called Chochmah, Binah, and Das.

So there's a complete correspondence in these phases of understand, which have to do with intuition, [00:29:00] understanding, and implementation. And so we, For, for several years we, for many years we've been studying these things and we continue to do so and they continue to enrich our understanding of where the theory of constraints come from, and why it is so powerful, and why these thinking processes are so powerful, and helping us to frame a situation of blockage and find a breakthrough solution and move forward and find a way to implement the solution that we have found.

And so our job at intelligent management is to do that, is to take people to identify where they are stuck in that gap between what they, where they are today, what they know that they can achieve, but that they're not because something is blocking them. And we can analyze where that's coming from, find a precise way of overcoming that situation of blockage through injections, as Dr.

Goldratt calls them, and [00:30:00] and then map out a very solid implementation path right down to the nitty gritty of the tasks that then can be scheduled into a project at finite capacity with critical chain. So, you know, it's a cycle, it's a complete cycle, it never ends. 

John Willis: You know, there's so many things to like I think about, so one of the questions I get a lot, you know, people, you run into somebody, Oh, I've been listening to your podcast for a, and they'll talk about the the podcast with Domenico.

And the one thing they're like, you know, that last piece, cause they only got to it near the end, like, like the whole thing. And then he's just been, Oh, by the way, you know, at the end of Goldratt's life. And he tells the story about how he sort of implied that a lot of what he understood and he was diving more into.

And to to Talmud and all that, and so like that, I, I think people are going to be now fascinated about this and, you know, sort of a promo for the book, right? Like a little teaser one of your characters may, right? Actually goes to a rabbi to get advice. So that [00:31:00] that's kind of right. 

Angela Montgomery: Yes. 

John Willis: I don't, the other thing I think, which is also, I, you know, I think one of the reasons I got hooked.

On Deming, you know, I, I sort of, I was challenged to understand how his influence is, you know, sort of shoulder of giants influence on everything, including Dr. Goldratt, but the the, in, in Goldratt's Beyond the Goal, it's like, it's so burned in my brain. I, I try to listen to that once a year. It's just so, you know, the, the, the audio book is like, so it's gold, right?

And, and yeah. He's explaining the difference between, like, the social science and the, you know, the, the physicist, right? And, and he gives a great explanation about the, you know, the difference of how they think and all that. And then he says, oh, by the way, like, just in a little quick passing, you know, myself and Dr.

Deming were both physicists. 

Angela Montgomery: Right, 

John Willis: you know, and then I did some more research turned out, Shewhart, was a physicist, right? Like, like, like this whole, like, [00:32:00] and it started making me think about like, and I think I did an early presentation called Deming to DevOps, right, which was really sort of going all the way back, you know, to, you know, to going back to like Boltzmann and like how, like, this whole change of this second scientific revolution happened, and why these, out of everybody had read, I, you know, I had already been, you know, Leading in, in it for you know, this is 1980.

I mean, so I was almost 25 years working in large organizations and, and why everything I learned, you know, from management classes at GE, you know, and like all this stuff, you know, Crotonville stuff, you know, all this stuff that I had been exposed to all of a sudden. These two guys made more sense to me than anybody I'd read or understood.

You know, I'd met people, then I'd been an independent consultant, and when he said that in that, in Beyond the Goal, I was like, that's gotta be, that has to be the thing. Yeah. [00:33:00] Like, like the way, the way those, the way he described the way a physicist thought. And then, and I had a good friend who was a physicist and I literally just went, like, you got to explain to me, like, you gotta like walk me through this.

And and I think, and then, you know, I, I guess I knew that Domenico was a physicist too. So it's just, there's something so interesting about. And I've just did, I know I, I, I yak for a little bit, but I just did these podcasts with this Beth Blankenship and man, you should listen to this. She's, she is just something else.

And she, her whole thing is about like Shewhart and, and, you know, all these sort of physicists, you know the, and, and, and I think there's just so much there that maybe helps us understand Why don't get like, we, we can't see the difference. Like most of us are not physicists. Most of us are not, you know, educated to think that way.

Speaker 4: Right. 

John Willis: And, and like, and maybe there's some magic that no magic, there's no such thing as magic, but, but there's something [00:34:00] that can help us because that, that turned everything over to me. I'm I'll never be, you know, I'll be you know, a physicist played on TV. Right. But, but the point is once I understood.

the core of the difference of why he explained how physicists think differently. That opened up a whole new world to me. 

Angela Montgomery: Yeah, the difference between the approach of a physicist and the approach of I guess most management theorists or people who teach management is the physicist is trained, is educated to ask fundamental questions about nature and why things are the way they are.

So part of our work has consisted in asking the fundamental questions, what is work? And the conclusion was that either you're doing a repeated process or you're doing a one off project. So if we understand how to manage projects using critical chain, because you have to [00:35:00] understand that the capacity is finite, nobody has infinite capacity.

Speaker 3: Right. 

Angela Montgomery: And you get your processes under, you know, well sorted out and you're lowering variation, then you have the key to managing an organization effectively. Sadly, management is just not considered to be the most attractive of activities and so I think in the 80s, you know, it was all about finance. 

People were attracted, talented people, intelligent people, were attracted to that field. They were not attracted to working in industry. And I think management was kind of left to its own devices. And so much of management is based on faulty ideas. And the idea that experience is something that you can create a theory from.

Which is the wrong way around. Instead, when we work from the science background, then we know that there is theory has to, there is no good practice that doesn't come from a [00:36:00] solid theory. So we have to have the theory first. That implies you have to learn it first. You have to understand it and then you can apply it.

And as we have done over the years test these this approach in many different settings and many different environments over the years, constantly refining it. So there is a problem of may I say ignorance in the sense that people just don't learn certain things that they could benefit from enormously.

But one of the great things about working with smaller companies is that they are so connected with the business. They are so connected with this thing has to make money so that we, you know, can keep going and growing. That they latch on to things that make sense. And they see, exactly as you did, that these things make sense, these things bring out the results, these things allow us actually to achieve things we didn't even imagine that we could achieve.

These things, this systemic approach, gives us a [00:37:00] big picture that allows us to see our role as the supply chain, within a supply chain, within a value chain, in a much bigger picture. Bye bye. We don't have to just compete. We don't have to beat people on price. We can actually work together. We can become a real partner of the people that we that we serve through our services or our products.

We can make their lives better if we ask the right questions, if we have the right approach, we can involve them in it. So we have to get beyond that idea that we are individuals and we only have to think about our own little thing. And We are stuck in our silos or we are stuck in our competitive mode.

We can work together. It sounds idealistic. It's actually just science. This is what works. This is what is sustainable over time because the way most people are behaving at the moment and in business and beyond is just not sustainable, right? [00:38:00] 

John Willis: It's hard to grasp too, though. I mean, I, I've done a bunch of startups and companies, you know, and I, I, you know, when I read out of the crisis, right, you know, I mean, it, you know, it's there, you know, like, okay, Love this, love this, love this.

And then I, you know, I still struggle, but I know it's right. Fundamentally is, you know, when I have a software company, I want my sales people to make more money than it can possibly be made. And I know that's fundamentally wrong, but like, you know, I, you know, when I, when I'm a small startup and I'm trying to sell to like the Federal Reserve and JP Morgan Chase, it is so incredibly hard.

To get a deal, you know, a company that's only existed for a couple of years and, you know, get on a purchasing and there are, you know, and I don't even agree with this idea that there is such thing as a 10X or, but there are these people in sales that treat it like a science and are, and the only way you can, you know, hire these people is you have to give them, you know, You [00:39:00] know, just sort of disgusting commissions.

Angela Montgomery: But that's only, John, if you see sales as an activity which is in isolation. When you understand that sales is just the end point of the entire system that then has to feed back into the system, then you don't need a traditional salesperson. You need somebody that goes to the customer, finds out what their undesirable effects are, and, you know, Designs a solution for them goes back and helps them to understand that what you have designed is exactly what they're looking for.

And you can't, it doesn't make sense to motivate sales without understanding what production is capable of producing because then they sell something and you can't deliver it. So unless you see everything as being interconnected. Then you could be shooting yourself in the foot. 

John Willis: I've just realized I just had this sort of enlightenment in that.

One, one is the, the top, top salespeople that I want hire that I work with are people who completely understand that it isn't about just selling you and it is about [00:40:00] creating a relationship. It's about working on a project together. You have a problem. I have a problem and so on. But, but I just realized, you know, where I get disconnected, which is.

You could have all those philosophies, but if you're still working with the classic Tayloristic or sort of not, you know sort of a zero sum organization after working within those constraints. And in those constraints, you have to deal with not just the commitments, the chief of staff, the CIO, but then even when you get through that, you got to go through purchasing and right.

And then that's unfortunately siloed in a like, terrible, terrible, then has to deal with legal and then you have to deal with other sort of parts. Anyway, so I think therein lies sort of, but here, let me go back. I don't want to go too far, but I, I fundamentally agree on the principles of systemic thinking.

I just think there's a calibration problem between certain organizations that you're dealing with that are like, unfortunately, they are, you know, zero sum. And, [00:41:00] but, but the but the point going back to why it is, so here I, I'm, you know, I am a sycophant, I try not to be a sycophant of Deming, but I am.

And, and I still on that one subject struggle. So imagine somebody who hasn't done the homework To try to understand these. But a CIO who has gone through classic MBA training and stuff, right? Like, like that's why it's so hard, right? Like, cause they, like, like I said, I'll say this again, I, you know, I understand this and I've studied this and I've worked hard to, so I don't understand why at certain things I don't understand what's, what am I missing?

And we're dealing with a lot of CIOs who haven't taken any. effort to understand this, and we're trying to convince them to think in, like, what is almost a communist way of thinking.

Angela Montgomery: That's why we created a method, because the, the upstream studying and level of understanding that is required in order to have this kind of approach, we've [00:42:00] done that for people, as it were. They then need to just follow the steps. And see the results that they get with it. And then people, there are those people who become totally passionate about it and want to learn it and want to study it more and more, but that is not necessary.

 When you design the system and you design the organization in What we have come to discover as to be the most appropriate form of organizational design, which we call a network of projects. So what we have come to understand is that an organization is essentially one people like to talk about team, it's one team of people with different competencies, and those competencies need to be engaged.

in the to deliver the tasks that are part of the projects that are required in order to be able to produce an end result. So when we begin to understand that, we begin to understand much better what people are in a company for. They're [00:43:00] there to lend their competencies. They're not there to climb a ladder or to be squeezed into a, some kind of functional box.

They're there because there are tasks to be carried out that require certain competencies. So then we know who to hire, how to use them much more effectively, and how to, how to allow people to interdepend much more effectively, which is much more satisfying. And we can help people to develop either in terms of going more vertically into the competencies that they exert or in taking on more and more responsibility for larger and larger projects or Projects or projects.

So that is the radical approach that we have to seeing the organization. It's radically simple because, as I said, there's either they're doing projects or they're doing process. So that's how you, that's what you want to figure 

John Willis: out. That's the one thing I loved about sort of Goldrattt, right, which was, it was all just, like, even his explanation of how physicists think is very simple.

Like, in other words, like, [00:44:00] it's like you said, it's radically simple, right? Like, and I, you know, this is another sort of question, as you were talking about, you know, we were, you were sort of explaining, you know, why the whole idea of a physicist, You know, understanding change or being able to deal with change.

I've been like toying with this idea of an article that I've been wanting to write for years and I just, I, I, I'm still not sure. A, it's gonna make sense to anybody, but B it's actually correct. And, and so since we're sort of, we we're like hovering over this, I'm thinking about the relationship between sort of like correlation, inductive, and like, you know what and pragmatism of A Priori, right?

Versus causation, deductive reasoning, and A Posteriori. And I wonder if that's like sort of all related to like this, this whole radical thinking or, you know, how does that make sense or? Well, 

Angela Montgomery: let me put it like this. We like to sometimes talk to people in terms of [00:45:00] an analogy of a pilot, right? So we now live in an age of complexity.

There is no two ways about it. Our nature is complex. Whether you understand it or not, you're in it and you are suffering from the the effects of it. And the fact that our decision makers are not equipped to make decisions and take actions with an understanding of complexity. So it's like when pilots learn to fly a plane Domenico flew a little plane when he was a student when we first met, and my eldest brother was a pilot, and Domenico and I were actually in Trieste when John John Kennedy's plane went down.

If you remember, that was the first time I ever saw CNN. They just kept saying nothing for, 24 hours a day and trying to find something to say. And we we asked my brother what he thought and about it. And he said, yes, he said he wasn't qualified. He didn't have the license to fly [00:46:00] at night, right? So they took off late.

There comes a point where you cannot distinguish the sea from the horizon. And that is presumably what tragically happened. Now, If we are in an age of complexity and we don't understand that we can't navigate the plane as if we were in daylight, you can't look out the window to see where the, you know, where the runway is, you have to rely on instruments, you have to learn to fly.

By instruments, and it's the same thing we live in an age where we need to learn to understand how to fly our planes, how to manage an organization design an organization with the right kind of knowledge that allows us to. To operate and flourish within a world of complexity. 

John Willis: Yeah, no, I, I think that is the you know, I, I think, look, like, I think we've all, like the world has always been complexity.

It's just that [00:47:00] we've raised the profile of it with different, you know, particularly in IT, right? I mean, one of the biggest struggles we have in IT is You know, good friend of mine you know John Allspaw and Dr. Richard Cook, you know, we'll talk about above the line, below the line. So, and, and this ties into another sort of, I love that you use mental models and I go, right, sorry, that, that's like brilliant.

A plus plus. And they, they said you know, the way that they like show a picture of what you think And not even just like individually, but like, let's say this is the classic, like, you know, what are the components of our system? Well, we got databases, we got servers, we got, you know, we got some like network equipment and and then they'll show a picture of like the lower half is just blank screen.

And it's like, you really don't have a clue what is going on, right? There's a temporal nature of like, even if you thought you knew, like the nanosecond when you knew it's changes. Right. And so like [00:48:00] that, that has been sort of a large discovery of a lot of discussions now going on, particularly in incident management about sort of understanding that complexity is the, the, the sort of the overarching that you don't really know you're in this thing where you can't, I love the sort of.

Good. the John F. Kennedy, John Kennedy, the junior, whatever analogy of there's a, they're like, just assume you can't tell where the horizon is, right? You have to you literally like have to, and you gotta be careful about instrumentation, of course, but, but, cause that's a constraint into, you know, a sort of distraction.

But anyway, I'm rambling, but the, the point is I, like, I love that idea. Like, you know, Instead of trying to explain it in complexity science and all that and even big words like, you know, that I use, not too big, but that, that example is perfect, right? Because like, just like the, the below the line, above the line examples from Dr.

Cook and, and, and John Ospar is that, [00:49:00] like, what you think And what you think, what you collectively kind of think you think, it's not really there. So I mean, that's a really good example that you gave on you can't, no, go ahead. No, I was done. 

Angela Montgomery: No, no. I think that what I would like people to take away from this book, and I hope they read it is that we are artificially limiting ourselves.

If we don't, appropriate us the right kind of knowledge, the right kind of information. And if we don't take the incredible opportunity that Dr. Goldratt gives us of using this method to really look at what are the mental models, what are the assumptions that we are making that are keeping us stuck.

Most people, most companies have this sensation that there is something more that they can achieve. And they're not, they don't know why they're not getting there. And it's what we have come to call the cognitive constraint. [00:50:00] It's that set of mental models and assumptions that is keeping you stuck. But it's an incredible opportunity because if you have the discipline to.

elicit those assumptions and challenge them, you can come up with a breakthrough that will take you to a whole new level. And I came across another amazing quote, I think it was yesterday, which I wish I had found it in time for the book, but from T. S. Eliot. Who I mentioned in the in the book several times, but the poet said it says, only those who will risk going too far can possibly find out how far one can go.

So,

we have to keep challenging ourselves not limiting ourselves artificially through mental models through old thinking through being not being willing to take on board new knowledge that is out there it's available. And for people to. really take the leap into where are we going to be as 21st century organizations, as 21st [00:51:00] century citizens, we have the opportunity, as Dr.

Deming said, we're here to make a new world. Let's do it. But we need the knowledge to do it, and we need to be willing to put in the effort to get there. And 

John Willis: that's why I'm such a big fan of system profound knowledge, right, you know, because I, you know, I, I, I've gotten criticized for this, but, because they, there is no order and I get that all the, all the elements have to work in, in conjunction, right?

 But I think there's a caveat to that, but, but the point is, I think of like, like, if I was to sort of. Or when I do teach until I'm challenged to tell me a real good reason why this is wrong is I think it starts with theory of knowledge, like how do we know what we think we know it turns into sort of understanding variation, which is OK.

Now, how do we understand what we think we know? Now we, we know, right. And then wait a minute, hold on. There is the human constraint, right? Sorry, [00:52:00] squeeze in there. But like the psychology, like bias, you know, intrinsic motivation, all those things, right? Like what motivated, like we could have everything perfect from all the sort of, but if somebody, you know, like just doesn't fundamentally believe this because they are completely blocked.

On a, you know, on a bias, you know, about like, no, no, I'm sorry. I'm not going to change. This is, you know, how do we sort of, like, dive into that as a science? And then finally, the wrapper, which again, people get upset when I say there is a There's like a fourth discipline, I've gotten slammed for that, is the system, you know, system thinking or systemic thinking, right, which is, you put it all together, and you have a model.

I think the thing that's interesting that you proposed in the book and through the intelligent management is, even that, it's a load, a heavy lift for a lot of, you know, CIOs and organizations. So the idea of coming in through, you know, Optimizing [00:53:00] on a constraint to learn all that, I think, is pretty brilliant, honestly, so, 

Angela Montgomery: yes, it's all connected, so you start at one point, and you can just keep digging. Okay, going deeper into this. But most importantly, these things work. I mean, they produce results. So it's not just about philosophizing and wishing for a better world. We can build the best world because we have ways of actually doing management of building companies of operating companies that make sense.

And that have incredible results. And we will always have this tension between what we know is achievable and where we're actually stuck today, because that's just part of human nature. It's how how we're built. And that is what helps us to grow. If we as long as we take on the challenge and the burden of wanting to evolve and grow and go beyond where we are today.[00:54:00] 

John Willis: Yeah, I mean, I think, like I definitely want to wrap up, but, like, I think that the other problem is, as humans, we sort of, like, we live by heuristics, right? So there, there's the sort of the double edged sword, right? Which is understanding which of the things that really are part of like you know, sort of a daily, like, okay, I can't overthink this too much.

This is something I do. You know, if I had to go through the physics of how to read an email, every time I read an email, email, so there's a whole year, but at the same time, where's the line. And I think it's, it's like, it sounds like a lot through your methodology or just putting all this together. You can find that line of the things that you just have to always question.

Every time. Versus the You know, it's sort of what they, you know, and some people It always comes down to flow, John. 

Well, you're right. What 

Angela Montgomery: we're focusing on is getting, keeping the flow smooth. So inevitably, we don't have to overthink everything. We just have to concentrate on the flow [00:55:00] and make sure that the inputs are going through and becoming outputs.

And when we get stuck, nine times out of 10, it's going to be because there's a conflict between a person, two people, or somebody who has a dilemma with themselves. Or a conflict between authority and responsibility. So, these are things which we can work through, and we have a means to do it, and we just want to keep that flow going.

 It's all very practical at the end of the day. 

John Willis: I'm thinking, like, you should write a daily devotional, because every time I say something, you kind of tell, and I'm like, oh, I knew that. Did you get a flow? What was I thinking? Like, so yeah, it'd be next book be a daily devotional and I could just read every morning.

 Where do people find? This is great. I'm telling you the book is like off the chart. Good. I mean, like, if you people who know me, I don't, I wouldn't say that, you know very rarely do I sort of go on and on about a book. And this is definitely a book worth going on about it. I, I know people. One who [00:56:00] listened to my podcast or listened to my presentations who have read my book or have stayed this long on this podcast, I guarantee you, you will love this book.

So a couple of things. Where will people find the book? And then like, how do people learn more for people? I'm sure there's a bunch of people are going to want to talk to y'all, you know, that may or may not known the connection between, you know, what y'all did with Deming and Goldratt. How did they find you?

So where, where do we find the book? How do people find your organization? 

Angela Montgomery: Okay, so the book is called The Human Constraint, and the subtitle is How Business Leaders Can Embed Continuous Innovation, Conflict Resolution, and Problem Solving into Daily Practice. It's a business novel. It's going to be available from Taylor and France's Routledge at the end of August this year, so it will be coming out shortly.

And you can find us and our work. We have tons of material on our website. We've published, this will be [00:57:00] our sixth book so far. So we have a lot of work and a blog available for people who want to know more. And you can find us at www. intelligentmanagement. ws. 

John Willis: Brilliant. Yeah. I won't put all this in the show notes, but very much.

This was a pleasure. It really was. I mean, I I, I just, I, I love the way you explain stuff, the way you wrote the book, the way you sort of, like, you, like I said, the whole daily devotional. I, I love how you sort of concisely put some of my ideas that are all over the place, you know, in a, like a good example or a good perspective.

So I, I really, really enjoyed this podcast. So 

Angela Montgomery: Me too. John, thank you so much for the opportunities for the chat.