Working on the right projects is only half the battle, the other half is explaining to finance how it is successful.  The best time to make this connectivity is during the project-scoping phase. A simple tool that comes from the theory of constraints methodology is called a future reality tree. A future reality tree allows one to map future expectations given that a change will be implemented. This visual method shows the relationships between the financial results and the objective of the project. Creating the future reality tree will help visualize the benefits of making improvements on cost savings, revenue and more, but best when used with Corporate Strategy Objectives. 

The theory of constraints methodology outlines the use of the future reality tree as part of an overall analysis of weighing different options. The use outlined here is much more straightforward and it is intended to be the medium used to communicate where financial benefit will occur once the performance is achieved. Using this tool helps facilitate the conversation with the finance department to gain buy-in early, on the merits of performing the project. Getting this engagement early will help with the overall acceptance of stakeholders and provide needed financial cover once a project is successfully completed. 

The project’s objective should be an operational metric that truly reflects the performance of a process. A project objective statement should identify both the current state (baseline) and the goal of the project. For example, in a call center a project objective statement might include the following phrase: to reduce the average handle time (AHT) from 118 seconds to 90 seconds. This project objective clearly ties the process improvement to an operational metric that both customers and associates typically experience.

Building on the Project Objective statement, a future reality tree can be created that outlines the financial impact of meeting this objective. The future reality tree is created using the following steps:

  1. List the successful objective metric at the bottom.  (AHT = 90 secs)
  2. List the possible results that could be achieved with this improvement at the top. These could be reduce cost, improve quality, increase customer satisfaction, increase sales, etc.
  3. Add direct consequences that are the result of the successful project.
  4. Use arrows to connect the successful objective at the bottom to the direct consequences. These arrows represent the cause and effects of the new process.
  5. Continue adding direct consequences and connecting arrows until the top-level results are reached.
  6. When a direct consequence has a financial impact, assign a dollar sign ($) to it.
  7. When a direct consequence is actually a risk, assign a minus (–) to it. Direct consequences are not always positive and adding these foreseeable risks provide insight into the risks associated with achieving the project objective.


SBTI reality tree

The above example represents a call center. It might be obvious that when calls are handled faster the center would potentially have a need for fewer resources. However, the above highlights that additional financial benefit could show up in reduced employee attrition, less variances in staffing, less overtime, etc. The idea is this is used to have the conversation. The map also calls out that it is easy to lose this capacity if we don’t address the risk.

The goal in performing a future reality tree is to begin with the end in mind. Peering into the future and assessing what the process will look like once the level of performance is attained allows one to articulate both the good and bad of taking on the problem. Performing this during the project-scoping phase of a project can provide both financial context and possibly highlight potential negative branches, as in the example with Customer Service Representatives (CSRs) misuse of free time by going unavailable vs. answering more calls.  Also, identifying negative branches early can help resource the project more appropriately and/or identify necessary department communications.

Once the map is complete it is always a good idea to test it versus valid objections. Valid objections are how others may interpret the relationships identified in the map.

  • Clarity – I just don’t understand this?
  • Activity Existence – I don’t believe that “A” happens
  • Causal Existence – I don’t believe that “A” causes “B”
  • Added Effect – “A” also causes “C”
  • Causal insufficiency – “A” won’t cause “B” unless “C” occurs
  • Additional Causes – “A” causes “C”, but “B” also causes “C”
  • Circular Reasoning – How can “A” cause “B” if “B” causes “A”? For example: at a vinyl production facility the proposed logic was regrind causes scrap, where management said scrap causes regrind. It is a longer story, but safe to say that this was a valid objection.

Once valid objectives are satisfied, the completed map should be reviewed with both the department management and the financial analyst supporting the department.

Using a Future Reality Tree helps assure that improvements are focused on the company strategy. Improving strategy execution is a passion for Jim Longshore. A Strategy Assessment is a great way to identify improvements that can impact your organization.


1 Jerry Maguire Cameron Crowe, (1996), TriStar Pictures 

Dettmer, H. W., (1997) Goldratt’s Theory of Constraints: a systems approach to continuous improvement.  ASQC Quality Press, pp 178-235. 

If you would like to request a listening session for your business, you can contact me, Jim Longshore, by email at