The Theory of Constraints
Reading time: 3min
The base philosophy of the theory of constraints can be boiled down to:
Every system will grow up to its constraints and no further.
Why Is This Urgent To Understand For Your Business
Every system has potential and constraints.
99% of entrepreneurs and executives spend all their time and resources trying to add potential to their businesses.
In doing so, they think they’ll grow their business, but instead they only:
- Add too much new stuff
- Waste time, resources, and energy
- Lose focus
By doing all this, they think they are saving their business because they have things to do. Yes, they are developing new lanes of potential, but they don’t realize that each one of those new lanes will be capped by its own constraints.
A business is a system, and any system grows only up to its constraints, no further.
That’s why you need to focus on removing bottlenecks, not adding new ones.
Finding The Right Sequence
What makes macro-speed happen is not all the frenzies, the frenetic energy, or the hunger for shipping new stuff. It’s knowing which problems to solve and in what order.
To visualize this, we can think of any business as a chain with many links.
Each link is a piece of your business big enough to make sense on its own, like departments, sections, a specific process, a part of your delivery chain, etc.
When connected to one another, these links form the chain. That’s your business as a whole.
The point is, when you stretch that chain of yours, the weakest link will break first.
Your biggest constraint is the weakest link that allows the chain to break. That weak link is the one thing not strong enough to support the weight of more potential.
Your goal is to identify the weakest links in your chain and reinforce them in the order most relevant to your specific context.
So, like every business on earth, your business has, right now, a constraint that you have to identify as fast as possible to remove it as fast as possible.
That’s what people call growth:
Removing constraints and bottlenecks so your business can do more, better, new, stronger, faster.
How To Remove Constraints at the Speed of Light?
For this, you have to:
- Ask yourself the right questions
- Answer those questions truthfully
- Make hard choices fast
Whether you like him or not, right now, the best human on earth at removing systems constraints is Elon Musk. The following actions were Elon removing a constraint from a system:
- Firing 80% of Twitter’s workforce right after buying it (~6,000 people).
- Removing useless meetings and the management layer in each one of his companies.
- Building reusable rockets by rejecting the industry norm that rockets are single-use, enabling SpaceX boosters to land and fly many times.
- Rewriting Grok’s entire training and inference stack from Python to raw C/C++ to remove software overhead and make it run much faster on Nvidia GPUs.
To some, it is an example of horrible events; to others, it’s only businesses adapting to reality and their context.
What’s clear and undeniable is that each one of those moves made his companies grow fast.
To help you do it faster, find the business stage you’re at with the “Roadmap: Level Finder”, read about your step, identify your main constraints, and annihilate those bottlenecks of yours.