It's 2005, and I'm sitting in a conference room perched on a hill in Huntly, New Zealand. While not a towering peak, the hill's isolation creates a perfect environment for uninterrupted learning. Outside, mist rolls across the landscape, creating an otherworldly sense of separation from the everyday world. Inside, twenty-three of us are deep into day four of the Black Belt in Thinking course—a seven-day Theory of Constraints intensive that's pushing every boundary of how I think about problems and solutions.
I don't know it yet, but what I'm learning in this room will transform my entire practice.
The facilitator draws a simple diagram on the whiteboard: five boxes connected by arrows. "This," he says, "is the Evaporating Cloud. It's how we make conflicts disappear."
I'm sceptical. After fifteen years working in industrial relations and organisational development, I've seen plenty of conflict. The idea that it could simply evaporate feels naïve.
Then he walks us through the logic. And something shifts.
To understand where the Perry Approach comes from, we need to meet Dr. Eliyahu Goldratt.
Goldratt was an Israeli physicist who became fascinated by a question: Why do organisations struggle so much to improve? His insight was deceptively simple: every system is limited by its constraint—the one factor that most restricts its performance.
In a factory, the constraint might be a single slow machine that creates a bottleneck. In a sales team, it might be lead generation. Fix the constraint, and the whole system flows better.
But Goldratt went further. He realised that many constraints aren't physical at all—they're policy constraints. Rules, procedures, and assumptions that made sense once but now hold organisations back. And the most stubborn constraints of all? Thinking constraints. The assumptions we don't even know we're holding.
In the 1980s and 90s, Goldratt developed a suite of "Thinking Processes"—logical tools for identifying and challenging these hidden constraints. The Evaporating Cloud was one of them.
Goldratt's Evaporating Cloud (EC)—sometimes called the Conflict Resolution Diagram—was elegant in its simplicity. It consisted of five elements: