The Evaporating Cloud is one of the five Thinking processes in the theory of constraints initially developed by Eliyahu M. Goldratt to enable the focused improvement of any system (especially business system).

The Evaporating Cloud is suited to finding a solution to conflict between two parties or two points of view. The method requires the participants to find 'win-win' solutions because it emphasizes that both parties are trying to reach the same ultimate goal.

This understanding of conflict can be diagrammed as follows:

 B <- D
 / |
A X
 \ |
 C<- ~D

When writing the cloud, the arrows should be read as “in order to” or “because” or “so that.”

Steps in problem solving:

1. Decide that you really must solve the problem.

2. Draw the cloud and define clearly the conflict, the common goal, and the intermediate assertions.

a. What does each party want? This will be boxes D and NOT D. Clearly identify why they can’t both be met.

b. Identify the root causes--the reason why each party wants what they want. These are boxes B and C.

c. What is the common goal that ties B and C together? This can be difficult to determine, but unless there is a common goal there would be no conflict! Maybe it’s as simple as “we both keep our jobs”; but there has to be something.

3. Obtain agreement that the definition is correct.

4. Look “under the arrows” and review the causal assumptions.

5. Challenge each of the boxes.

and is read:

In order to have objective A, we must have requirement B...
In order to have requirement B, we must have prerequisite D...
In order to have objective A, we must have requirement C...
In order to have requirement C, we must have prerequisite D'...
But prerequisites D and D' are in conflict...

One of the tenets of the Theory of Constraints, reflecting its roots in the application of the techniques associated with scientific method to those "soft sciences" like management and behavior, is that in any system that is brought together for a purpose, there is no such thing as real conflict, but only unexamined assumptions. The cloud allows a clear statement of the perceived dilemma and provides a route for the surfacing and scrutiny of those assumptions.

 source: Wikipedia