Applying the Theory of Constraints to Software Engineering
The Theory of Constraints (ToC) is a management philosophy that identifies the most critical limiting factor, or constraint, hindering an organization’s success. Once identified, the goal is to systematically improve that constraint until it no longer sets the pace. Although born from manufacturing and operations, ToC has proven invaluable in fields far removed from factory floors. In software engineering, where teams constantly juggle competing priorities, complex systems, and unending feature requests, applying ToC can be transformative.
This post explores how the Theory of Constraints applies to modern software development. We will also draw lessons from The Phoenix Project, the novel by Gene Kim, Kevin Behr, and George Spafford, which popularized the idea of looking at IT work as a system of flow. One of the book’s powerful messages,derived from ToC and lean thinking,is that “improving daily work is more important than doing daily work.” We’ll investigate what that means in practice and why focusing on improvement yields far greater dividends than simply plowing through tasks.
Understanding the Theory of Constraints
At its heart, ToC is based on five focusing steps:
- Identify the constraint: Determine the single part of the system that limits throughput.
- Exploit the constraint: Get the most out of the constrained resource without extra investment.
- Subordinate everything else: Align all other processes to support the constraint.
- Elevate the constraint: Invest to increase the constraint’s capacity if it still limits throughput.
- Repeat: Once a constraint is broken, another will emerge; start again from step one.
In manufacturing, this might involve a specific machine or process step that holds back the entire assembly line. ToC teaches organizations to focus on that bottleneck because any improvement elsewhere has little effect on overall throughput.
In software engineering, constraints can be subtler: a single overloaded team, a build pipeline that takes hours to run, or even an organizational policy that forces manual approvals. Identifying and attacking these constraints yields huge benefits.
The Phoenix Project and the Search for Bottlenecks
The Phoenix Project dramatizes the chaos that results from ignoring constraints. The story follows Bill Palmer, an IT manager thrust into the role of VP of Operations at a company whose new product,the Phoenix Project,is behind schedule and over budget. Bill discovers that the organization’s problems mirror those of a manufacturing plant struggling to meet demand. Through the guidance of a mentor named Erik, Bill learns the principles of ToC and lean thinking, eventually rescuing his company by applying them.
In the book, Erik frequently references The Goal by Eliyahu Goldratt, the foundational text on the Theory of Constraints. Bill sees that the biggest bottleneck is not a single piece of hardware but the way work flows through the IT organization. Too many projects pile up, approvals languish, and no one truly understands the dependencies between teams.
A memorable turning point occurs when Bill’s team maps out all the work in progress and discovers a single overburdened change management process that is delaying everything else. By focusing on this constraint,streamlining approvals, automating tests, and reducing batch sizes,the entire organization starts moving faster.
This mirrors what we see in real software teams. Often, the key constraint is not purely technical but arises from the interactions between teams, manual handoffs, or outdated procedures.
In practical terms, viewing work through a ToC lens means constantly evaluating the flow of value. Teams that embrace this discipline don’t try to optimize every step in isolation. Instead, they look for areas where handoffs pile up or rework is common, then experiment with small changes to relieve the pressure. Over time, these experiments reveal the systemic issues that slow everyone down,from redundant approvals to misaligned priorities. By documenting findings and sharing them openly, organizations create a feedback loop that supports continuous learning and faster delivery.
Improving Daily Work Is More Important Than Doing Daily Work
One of the book’s most striking lessons is Erik’s insistence that improvement should always come before the work itself. In one pivotal scene, Erik tells Bill: “Any improvement not made at the constraint is an illusion.” It’s a reminder that we must continually refine how we work rather than focusing exclusively on the backlog.
Why is improvement so critical? Every organization faces endless requests,new features, bug fixes, meetings, emergencies. It is tempting to move quickly through the list, believing that sheer effort will eventually catch us up. But if there’s a fundamental constraint, all that effort can only have a marginal impact. Conversely, if we invest time in removing the constraint, we can deliver more with less stress.
From Theory to Practice: Real-World Examples
Consider a team that releases once every two weeks due to manual QA steps. Testers are a constraint,they can’t keep up with new features, so developers wait. The team might first exploit the constraint by ensuring testers are focused on the most critical changes and by reducing unnecessary manual tests. Next, they subordinate other work: developers help build automated test suites so testers can focus on exploratory testing. Eventually, they elevate the constraint through new tools and training, enabling more frequent releases. Once QA is no longer the bottleneck, the team may discover that deployments themselves are slow, so the focus shifts there.
Most importantly, the novel’s message,prioritize improvement,becomes clear. When the team invests in automation and cross-functional work, they gain the capacity to innovate. Ignoring improvement left them stuck in endless firefighting.
Prioritizing Improvement in Your Organization
How can you embed this mindset in your own team? Consider these strategies:
- Set aside time each sprint: Reserve a percentage of sprint capacity,perhaps 10-20%,for improvement tasks. Rotate team members to ensure everyone participates.
- Measure key metrics: Track lead time, deploy frequency, and mean time to recovery (MTTR). Use these metrics to identify constraints and gauge the impact of improvements.
- Make work visible: Use Kanban boards or digital tools to visualize queues. If tasks accumulate at a particular stage, you have found your bottleneck.
- Encourage experimentation: Give engineers freedom to propose new tooling or process changes. Some ideas will fail, but continuous experimentation is the path to breakthroughs.
- Celebrate improvement wins: Recognize when the team shortens build times or eliminates manual tasks. Demonstrate how these improvements free up capacity for new features.
Continuous Improvement as a Journey
The Theory of Constraints does not promise quick fixes. Breaking a bottleneck often reveals deeper issues, just as patching one leak in a pipe may expose another. The goal is to create a culture where the team continuously surfaces problems and solves them. Over time, improvement compounds, enabling software teams to deliver faster and with fewer bugs.
The Phoenix Project concludes with the company thriving, not because they worked harder but because they learned to work smarter. Their success came from relentlessly identifying constraints and improving how they approached day-to-day tasks. This mindset is just as relevant to real-world engineering teams. The most successful organizations treat improvement as a first-class objective, knowing that it is the engine of long-term success.
Putting It All Together
Bringing ToC, DevOps, and lessons from The Phoenix Project together means focusing on continuous flow. Map your system, find bottlenecks, and devote time each week to improvement. Encourage cross-functional collaboration so constraints are surfaced quickly and teams learn from each other. With steady effort, you’ll see cycle times shrink and reliability climb. Most importantly, your engineers will feel empowered to fix problems instead of fighting fires. The payoff is not just faster delivery, but a healthier culture that sustains high performance.
Conclusion
The Theory of Constraints offers a powerful lens for software engineering, showing us that our processes are often limited by one key bottleneck. By focusing on that constraint,and relentlessly improving it,we unlock dramatic gains in throughput and quality. The Phoenix Project illustrates this principle through a narrative that many software professionals find painfully familiar. The most enduring lesson is that improving daily work is more important than doing daily work. If you devote time to refining your processes, removing bottlenecks, and encouraging experimentation, you will deliver more value with less stress.
The journey never truly ends. As soon as one constraint is resolved, another emerges. That is not a sign of failure but evidence that you’re progressing. The challenge for software teams is to maintain the discipline to keep searching for the next bottleneck and continue the cycle of improvement. Embrace ToC’s principles, prioritize improvement work, and you’ll find that your organization moves faster, adapts better, and ultimately delivers superior software.