Evaporating Cloud

Note: This is one of the thinking skills taught by Eliyahu Goldratt in his book "It's Not Luck." This page brings together all material from that book which deals with this skill. Evaporating Clouds are used in several ways as explained below. Reading this page is not a substitute for reading the book as there is information in it that I cannot possibly reproduce here. If these thinking skills interest you, and they should, I urge you to acquire the book for yourself and read it. It is very readable and it is very affordable! The book is available in many bookstores, from Amazon, and also from North River Press.

I presume that the author introduced the Evaporating Cloud tree first because it is the simplest of the thinking skills. In fact, there are three names by which this tool is known in the book. Although all the finished clouds have the same form, and the trees can be constructed differently, conceptually they are one and the same tool. They are just used for different purposes. The three names are:

Underlying this process are two facts. Obviously our objective in the situation might be different than the other parties objective. This fact is well understood generally. It is a standard part of every negotiating situation to carefully check what the mutual objectives of the parties are, so that both understand the basis on which they are negotiating in the first place. What is not so well understood is that in such a situation, both parties are captured in a conflict. It is not the people; it is not the personalities; it is the situation itself which creates the conflict. Because of our emotional makeup, it is not uncommon for people to become upset with each other when conflicts are difficult to resolve. We start thinking the other person is being unreasonable or illogical. Of course this emotional intrusion into the problem complicates will slow or even prevent the process of resolution.

Negotiating Conflicts

The first thinking skill Goldratt introduces in his book, "It's Not Luck", is the Evaporating Cloud. He gives two early examples of how it can be used. In the first example he shows how to construct a cloud which can clarify a negotiating situation and then be used to resolve the deadlock and negotiate a solution to which both parties can and will agree. The protagonist, Alex, comes home one day and his daughter wants to go to a party. It requires her to be out at night past her normal curfew. She and her father Alex disagree and the situation rapidly degenerates into a stand off. After a phone conversation with his wife, Alex agrees to use the negotiating aspect of the evaporating cloud to resolve the situation. Alex uses the following process to create an evaporating cloud which fully describes the situation. He then uses the cloud to understand the precise nature of the conflict, and finally to resolve the situation by negotiating with his daughter.

Negotiation Cloud Process

  1. Whenever you identify that you are in a negotiation situation that doesn't have an acceptable compromise, immediately stop the dialog.
  2. Set the right frame of mind. In spite of the emotions, you must recognize that the other party is not to blame. The two of you are captured in a conflict that doesn't have a reasonable compromise. Instead of blaming the other party we need to look at the situation objectively so we can fully understand the conflict.
  3. Write the cloud which precisely describes the situation. On the top right of a sheet of paper write what you want. Below it write what the other party wants. Next, to the left of what you want write the answer to the question: To satisfy what need do I insist on what I want? Now answer the same question for the other person's want and place it to the left of their want. Finally ask: what is the mutual objective that both parties share and write it to the left and midway between the wants of the two parties.
  4. Check that the cloud you have written makes good logical sense by reading from left to right along each path using the phrase: In order to <left box contents>, I must <right box contents>. What you read should make sense. Adjust the verbiage until it does.
  5. Check the conflict. Is it clear? Are the two wants mutually exclusive? If they are not then you do not have the conflict you thought you did. You have broken the conflict arrow.
  6. Connect the boxes with arrows as shown below.
  7. Check with the other party to see if they agree with your assessment of the situation. If they don't agree, adjust it between yourselves until you both agree. Don't argue about what they want or why they want to.
  8. Examine the assumptions which are hidden beneath each arrow. If you want to understand this more completely refer to the perception process. In order to tease out these assumptions use the following question. In order to <left box contents>, I must <right box contents> because _____. Whatever we put in the blank is the unstated assumption we are making. Perform this task for each and every arrow in the cloud, including the conflict arrow.
  9. Determine which assumption is flawed. At that point one of the paths will be disrupted and the cloud evaporates. Now the negotiation can be resolved. If this is done well it becomes both parties against the problem, instead of each party against the other.

The initial cloud for Alex and his daughter looks like this:

Conflict Cloud Alex and daughter

As Alex shares his understanding of the conflict situation with his daughter Sharon, they modify one box to make the cloud look like this:

Conflict Cloud Alex and daughter with modification

With an agreement on what the situation is they then begin to examine the assumptions which are being made by Alex and his daughter. When Alex realizes that the people who will be attending are from his older son's school , and when Sharon asks her dad to come and pick her up when the party is done, Alex realizes his fears for her safety are unfounded. In other words the unstated assumptions under the top right arrow are shown to be unjustified and the conflict evaporates.

Understanding Complex Problems

An evaporating Cloud is a better way to look at, and better understand, complex problems. These problems are complex because they apparently require us to behave in two (or more) contradictory ways. The cloud graphically illustrates what the two opposing requirements are. Even if we cannot see any way to resolve the conflict, we are better informed about the problem we are faced with. If the Cloud only did this, it would be worth its weight in gold, but as I will show shortly, it can also be used to resolve the conflict which it captures and presents.

The next use of the cloud, in the book, clarifies the situation Alex faces at work. As an Executive Vice-president he had attended a board meeting at which the board of directors passed a resolution to sell the group of companies Alex manages. Alex doesn't do anything more with this cloud at this point in the book, but the cloud clearly illustrates the precise nature of the challenge he now faces at work. The question is of course, what should he do. The cloud looks like this:

Ales's job situation

A Management Example

Normally the first thinking skill used in an analysis is the Current Reality Tree. Once a Current Reality tree has been created we trace the linkages back to find the root cause all the UDEs. If necessary we even rewrite the tree to show this root cause at the bottom of the tree. Then we use the Evaporating Cloud tool to write the root problem as a conflict between two necessary but conflicting requirements. As the example below shows, there are five boxes linked by arrows. The top and the bottom paths represent the two necessary but conflicting conditions. There can be more than two, but that is rather unusual. The leftmost box presents the common objective. If there is no common objective, there is no conflict. The right side presents the conflict between the two necessary conditions. The diagram is always read from left to right using the following verbiage. In order to... we must...

For the above example it would be read:

Cost Path
Throughput Path

Other than knowing the words which should be used to read these diagrams, no special training is needed to understand them. Constructing the diagrams is a bit more difficult. In my experience people make variations of these six mistakes when using Evaporating Cloud to precisely state a problem.

Common Errors made when constructing Evaporating Cloud trees

In having students attempt to create these clouds, I have noticed the following are the most common errors made by people who are learning to use the tool. I offer them to you to help avoid these problems.

  1. They do not form a coherent cloud because they fail to make the correct logical connections between the boxes of the diagram. You must use the indicated verbiage: In order to [contents of left box] we must [contents of right box] to tease out the meaning. Without these logical connections the cloud is not coherent. If the sentence doesn't feel right, it probably needs more adjusting and polishing.
  2. They formulate both necessary conditions coherently but fail to link them properly with an objective which is common to both paths. The problem cannot be solved unless there is an objective, which is common and necessary to both conditions. That is what 'necessary' means in this context. Furthermore if you are trying to resolve a conflict the common objective must be acceptable to both sides. You cannot impose an objective from one side on the other. It just doesn't work. The objective must be shared by both sides!
  3. The conflict of the cloud is not an apparent conflict. It is the fact that we are trying to solve a problem, which has two conditions, which cannot both be true at the same time, which makes this a complex problem. It must at least appear that there is an initial conflict!
  4. We must specifically state the assumptions which are being made for each linking arrow. Stating the problem and then failing to verbalize the assumptions for each connecting arrow is a waste of time. Precisely stating the problem is a necessary first step, but it is only the first step. The cloud enables us to present a compact, yet complete, understanding of the problem, but why bother doing it if we don't perform the next step and solve the problem. In order to solve the problem we must know what assumption(s) are being made for each link.
  5. Critical examination of the assumptions is at the heart of solving complex problems. We ask ourselves if these assumptions are really true in this situation, We can also ask whether there are any relevant limitations on these assumptions. A detailed examination of these assumptions will give us the leverage to spot which assumption(s) do not hold true for this particular situation. Once we know which assumption(s) is/are false we know which condition is really necessary and which one only appears to be necessary because we made an incorrect assumption. When we know which assumptions are invalid, one of the necessary conditions has been demonstrated to be unnecessary. We have solved the problem!
  6. Some people immediately propose a compromise solution. Without the detailed examination of the assumptions (error 5 above), the problem looks insolvable. Some people do this because they don't know how to perform the analysis. Some do it because they are lazy. Some do it because it is the only method they know for dealing with complex problems. Once the parties reach an impasse, a compromise appears to be the only way out, so they take it rather than doing the work of examining the assumptions. Never propose a compromise solution! Go figure out the assumptions and evaluate them.

Now let's go back to the Manage Well Cloud from above, and perform the next step of the analysis. For each arrow other than the conflict arrow we ask ourselves, what is the assumption. In fact, each arrow may have multiple assumptions. We start with the first one we can identify but if we get stuck in our analysis we can go back and again ask ourselves what other assumption we are making. For the conflict arrow we take a careful look at the apparent conflict. We ask ourselves if these two items are mutually exclusive. They can be mutually exclusive but they can also be only partly exclusive. Goldratt states that breaking the conflict arrow often results in the most powerful solutions.With the assumptions filled in the Cloud might look like this:

This is read using the method given above with the addition of a clause which specifies the reason for the linkage. It should be noted there is often more than one reason for a given linkage. This fact can become important when dealing with difficult problems of conflicts.

Cost Path
Throughput Path

For the above example we would then examine the conflict arrow and each assumption in the linkage for its validity.

Without doing this analysis a manager tends to jump back and forth between managing by the cost world and managing by the throughput world. Things in an organization where this is occurring are very chaotic for all its participants.

Troubling Incidents

Another way we can use the Evaporating Cloud technique as a tool for examining troubling incidents in our lives. Alex's daughter, Sharon, is down in the dumps about some things in her life. Alex, wanting to deepen his relationship with his daughter, asks her what is bothering her. After much coaxing she relates three incidents.

  1. She is upset with her best friend who seems to want to monopolize her time.
  2. She can't see her boyfriend until Monday because he is studying for an exam.
  3. She has shared her homework with a friend but is upset because she did the homework with a different friend.

Alex shows Sharon how to use the cloud to get a better understanding of what is happening to her in each of these situations. They analyze the first two situations together. Alex questions Sharon to get the information he needs and does the first one himself. It looks like this:

Cloud for Debbie

Then they analyzed the issue involving her boyfriend Eric. This time Alex prompts Sharon through the process by asking several questions. What is the troubling incident? Place this answer in a box on the top right corner of a sheet of paper. Now what do you want to happen? Place this below the firs box in the bottom right corner of the paper. Now for each box ask the question: why is it important to _____ (fill in the blank with the contents of the box) and write the answer to the left of the respective box. Alternate question is: In order to satisfy what need do I _____ (contents of right box). Check the linkages by asking In order to ______ (left box contents) I must ______ (right box contents). If the sentence doesn't make sense then polish the wording until it does. Finally ask: What is the common objective? and write it on the left middle of the paper. The Cloud Sharon wrote looks like this:

Eric Cloud

Sharon noticed immediately that the two clouds were almost identical. Sharon is very pleased with the two CLouds because now that she sees it on paper she thinks she can deal with both issues. Her father asks about the third incident and asks Sharon to write the Cloud rather than telling him the story. This is what Sharon writes:

Kim Cloud

Even without the story her father has no difficulty understanding what went on. Sharon asks it if makes sense to which her father replied: "It does if you did the math homework with Chris." Friendships are important to Sharon. She had been hit with not just one issue about friendships but three at the same time. She was unable to resolve any of them because she hadn't been able to verbalize any of the problems.

Goldratt implies that those things that bother us the most may be the very things that are the most important to us in our lives. Having one such issue hit us will make us stop and think. Two similar issues hitting us will be very discouraging. If we have three or more hit us in quick succession it can really set us on our heels. In cases like these, using the Evaporating Cloud can really help us to verbalize what is bothering us. Using the rest of the technique allows us to work through and resolve these issues before they bog us down.