Theory of Constraints

A management philosophy that holds that every system has one primary constraint limiting its overall output, and that the most effective way to improve performance is to identify and relieve that constraint before optimising anything else.

Improving a non-constraint part of a system yields almost no benefit because the constraint still limits total throughput. Founders who identify and address the true bottleneck in their business make progress that compounds; those who optimise around it spin their wheels.

A founder's business is growing but profits are not. She applies the theory of constraints and discovers her bottleneck is not marketing (strong) or product (good) but her onboarding process, where 40% of customers churn before seeing value. Fixing onboarding unlocks the growth her marketing had already generated.