Applying the Theory of Constraints

“Find and improve the constraining factor — no other work will matter.”

Eli Goldratt in his book, Goal laid out his Theory of Constraints which states that any system with a goal has one limit and worrying about anything other than that limit is a waste of resources. There is nothing fancy in understanding this but million dollar question is so how do you apply the Theory of constraints for your own success?

Lets decode: What is a constraints? Simple answer: Limits. Thinking in limits is the smartest way to identify and address the appropriate limit.

Phantom Equity

As Wikipedia calls it, Phantom stock is a contractual agreement between a corporation and recipients of phantom shares that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of shares of the corporation’s stock.

In layman terms, its a percentage of proceeds or dividends if the company gets sold. But why offer or take Phantom Equity?

Phantom 2

Phantom Equity are offered by Business Owners when they hire a CEO. This is most often similar to Royalty. When a company is already making millions of dollars in revenue, it makes more sense for a business owner to offer phantom equity than equity unless they believe they’ll sell the company in future. If you’re a CEO, and when you take phantom stocks, you don’t actually own the business but you do get many perks that comes out of the equity.

Being a CEO is a demanding job and very stressful, they are many times part of a Bad Dad’s club. If somebody doesn’t understand phantom equity, it is actually a negative incentive.

What’s your Mantra?

All of us battle with our unconscious mind almost every day. Then and there negative thoughts crops up, that slows us down or paralyze us. We pick up these negative thoughts from our experience, surroundings , people around us. How quickly we proceed from it will be determined by how often we say our mantra and how often we neutralize the negative thoughts as they come up.

woman in black tank top and blue denim jeans sitting on brown sand
Photo by cottonbro on

1. Hinduism. a word or formula, as from the Veda, chanted or sung as an incantation or prayer. 2. an often repeated word, formula, or phrase, often a truism: If I hear the “less is more” mantra one more time, I’ll scream.

Every single time a negative thought crops up in your mind, its time to state your positive alternative. Let that alternative line becomes your mantra. Say it to yourself with special dedication hundreds of times in a day if necessary. Why do this? You’re replacing a negative doom-loop thought process with a virtuous, positive one. You become what you tell yourself are.

It’s not difficult, it just takes persistence.

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