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Scarcity, Flow and Great “Glugs”
Subtitle: Deep Dive: Theory of Constraints: Human History
Warning: A bit of a longer and more theoretical read. I’m mostly trying to think through this broader contexts.
tl;dr: Flow is always constrained. What if we sought to balance constrained flow even in the context of scarcities that define ages in human history as well as the transitions between ages?
I read USV Partner Albert Wenger’s book The World After Capital for my first reading retreat. I read it, took notes, wrote out responses to journal prompts and explored old town Tacoma and the waterfront of the Puget Sound. It had a real nice time.
In the back of my mind, I’ve been trying to elide these two books ever since.
Wenger defines three overarching, abstract ages of human history by that which was, or currently is, most scarce. Goldratt points to a system’s constraints as their defining feature. Scarce. Constrained. They don’t sound the same, but all this time, I’ve felt they’re very similar ideas but I’ve had the hardest time seeing and articulating each in light of the other. I’m going to try to do that out loud here so bear with me.
But first a little background. Let’s throw all the puzzle pieces on the table and flip them right side up. Later we can start grouping them together.
Liquid poured out of a bottle
Traffic on roads
Products through a manufacturing plant
Products/features through a software company/team
Scarcities + Constraints
I’m trying to figure out: What is the difference between these two frames? In the following table I start to map the scarcity or constraint to the context. I’m not doing any mental gymnastics at this point, just stealing from the books mentioned above.
Wenger claims that 1) food was the defining scarcity of the Foraging Age, 2) land the defining scarcity of the Agrarian age, and 3) capital the defining scarcity of the Industrial age (however, he defines capital less colloquially as buildings, materials and roads for production). Much of the project of his book is arguing that attention is the defining scarcity of the knowledge age we’re on the cusp of or have been entering for the past few decades. In other posts, I can try to digest how true or maybe, oversimplified his viewpoint is. For now, I’m just going to take it at face value.
To draw on, what I think is an important analogy that helps me to connect and extend all these ideas, I’m going to throw some wildcard puzzle pieces out on the table. They might wreak havoc as we put this all together, but let’s see. These wildcards I’m borrowing from Thiago Forte’s posts on applying the Theory of Constraints to knowledge work. Most people have poured a liquid out of a bottle hearing it glug a few times before pouring smoothly and/or sat in traffic wondering wtf. I’m not sure the best scarcity or constraint to point to for traffic, but I’ll keep it in here anyways since we’ve all experienced it.
Then we have very very vivid examples of scarcity or constraints in The Goal and The Phoenix Project about manufacturing plants and software companies respectively. Each book identifies a clear and central constraint listed in the table.
What do these two frames have to do with each other?
Let me try to translate each in terms of the other. To do so we have to have a clearer understanding of what is scarce or constrained.
While for the Ages + Scarcities, we’re taking what Wenger says is scarce, but I want to get a bit more specific and say what is important in these human systems during these ages is the calorie. Calories are in food and in the beginning there was nothing mediating a group or system of humans consuming calories except for their own movement over land as they foraged for more of it. As human systems began to use agriculture to grow their calories, land, became the defining scarcity.
And later, as we automated the tilling of the land and concentrate it in certain places while concentrating our lives in others, more and more mediates between us and our calories like capital, which, to Wenger, as stated above, thinks of as buildings, materials, and roads. Another important dynamic in this flow is demand. As the size of the human system grows, so does the necessary supply of calories and all the means around growing and transporting those calories. Ideally supply and demand are nicely balanced without glugs that might look like famine or malnourishment.
Now what is flowing through the bottleneck of a bottle? Fluid. Wine. Water. Molecules in liquid form. What constrains the flow? The neck of the bottle. Space. The same is true for the traffic down the highway, I suppose. When suddenly too much liquid appears at the bottleneck or at the bend in the road, we hear a “glug.” We get a jam. Demand for space and the supply of it jerks us around and we have to live with the imbalance.
What about the flow through a manufacturing plant or a software shop? Products flow through the plant. Products/features/bug fixes flow through the software company. What do “glugs” look like in these contexts? Not famine or traffic jams but running around putting out fires, expediting a customer order at the last minute, rushing, poor quality/defects, late orders, and what Domenica DeGrandis calls the 5 Thieves of Time in her book Making Work Visible,
Too Much Work In Progress (WIP)
Neglected Work (never paying tech debt)
The imbalance of supply and demand and what we can do about it
[Jonah] says, “Yes, but as you already know, you should not balance capacity with demand. What you need to do instead is balance the flow of product through the plant with demand from the market. This, in fact, is the first of nine rules that express the relationships between bottlenecks and non-bottlenecks and how you should manage your plant. So let me repeat it for you: Balance flow, not capacity.”
Striving towards this glug-less balance is, in some contexts, a solved problem. Namely, the last two in the list we’ve been working off of. I’m going to try to work up the list in the hopes that by explaining to myself how others have solved this problem in these contexts I’ll have something interesting to say about the Knowledge age and scarcity of attention.
In this post by Thiago Forte, he enumerates the evolution of the solution to this problem over time. He points out that Ford used conveyer belts to limit work in progress and later Ohno of Toyota used actual cards to represent readiness for a new task, a method now known as kanban. In the 80s Eliyahu Goldratt reformulated the way to limit work in progress using time. All of these methods are some application of having a drummer keeping time, a buffer to absorb normal, everyday fluctuations, and a rope for pulling the units of flow through the system at the correct rate (in accordance with the drummer). This is known as Drum-Buffer-Rope or DBR.
More recently, in Agile Project Management with Kanban Brechner of Microsoft, extends this evolution even further with kanban boards full of cards that describe software tasks obviating the need for the complex orchestration of “DBR”. For Brechner it comes down to the question of how do you cope with the chaos of the context you’re in. The magic of Brechner’s proper kanban for software development approach is in limiting the number of cards in a column or stage of work (e.g. design, code, test) or in other words, strict work in progress limitation.
What do these mechanisms for “coping with chaos”, imbalanced flow, “glugs” in manufacturing and software development have in common? Limits, yes. But it’s more about getting the right amount at the right moment in time. “Just in time,” you might say.
Think about the example of pouring wine out of a wine bottle. If you tip the bottle very very slowly it is possible for you to pour without any glugs. The same, I think, is true if you let cars onto the highway very very slowly. Smooth flow of fluid through the neck of the bottle and smooth flow of cars through the highway. But this changes when there’s less liquid that gravity is pushing through the bottleneck. So the tipping angle is something that varies over time and, I assume, can be calculated with the volume of liquid and the dimensions of the bottle. The same, I bet, is true for cars on a highway.
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Flows of Ages
Skipping the flow of attention in the Knowledge Age for a moment and jumping to the flow of capital in the Industrial Age Wenger claims that the market managed to optimally spread the flow of capital around society to meet caloric needs.
As it turned out, competitive markets, combined with entrepreneurialism and the strategic deployment of state support (e.g. in the form of regulation), were better at allocating and accumulating capital.
While the debate over fine-tuning to get the best possible regulation will always continue to rage on, Wenger’s argument points to a new age in which the market is not best placed to allocate the flow of the defining scarcity, attention. I’ll leave you to take a peek at his argument yourself (it starts here) so I can skip to some of his thinking about how to cope with the chaos of attention allocation. He categorizes what’s needed to best allocate our attention into three buckets (starting here) with the common thread being freedom:
Let’s use the frame of constrained flow for a second. What is the unit of flow in the Knowledge age? Attention. That’s what’s flowing even if it’s not easy to cut it up into units like an individual’s attention or an individual’s lifetime of attention or hours of attention or attention sessions given everyone sleeps. All possible ways to cut up the attention into more measurable units.
What constraints the flow of the supply of human attention toward what demands attention (for the survival and thrival of human society)? First, the jobs we must work to make money to trade for… calories (economic). Second, the information we need access to to move toward truer and truer understanding of what needs our attention (informational). Third, our self-imposed regulation and limitation that might look like fear, worry, social anxiety, perfectionism, that limit what we create and put out into the world about what needs attention.
✅ Units of flow identified
✅ Constraints to balanced flow identified
❓How to balance the flow (conveyer belt, cards, time, drum-buffer-rope, WIP limits)
Wenger is basically claiming that we just legislate and educate away the first of those two constraints. But if Goldratt or Jonah were here they’d say, like the poor, Constraints will always be with you. You define attention as scarce but that will either resolve with the new freedoms or will Russian doll down to another layer of limitation. It doesn’t mean it’s not worthwhile to take up Wenger’s legislation and education recommendations but maybe they’re only a step along the way to the uncovering the next constraint and indeed the next age.
What are you reading at the moment?