Authors Eliyahu M. Goldratt and Jeff Cox
North River Press
Hardcover, Paperback, Audio CD, Multi-Media CD and Kindle editions
Audio.com audio book
I liked The Goal because it’s not only a good, informative business book, but it’s written as a novel, taking the reader through an adventure of discovery, while rendering complex management theory into readable prose.
An intriguing story
The story centers around Alex Rogo, a newly promoted plant manager who discovers that his plant has only 90 days to improve production before the ax falls on him and the employees. To complicate matters, Rogo’s marriage is on the rocks, because his focus on plant operations has alienated his wife, who feels Rogo abandoned her.
Eliyahu M. Goldratt
Enter old friend Jonah, a former physicist now a business consultant, a near mythical mentor who uses Socratic questioning to point Rogo in the direction of solving his own problems.
The Theory of Constraints
Jonah, introduces Rogo to his Theory of Constraints which states that for an organization to maintain ongoing improvement, it must identify and answer three fundamental questions: What to change, what to change to, and how to cause the change?
Probing questions lead to discovery of the real problem
Jonah asks Rogo if he knows what an organization’s goal is. Rogo replies that the goal is to increase efficiency and productivity.
If that were the case, Jonah counters, Rogo’s company would be making money instead of sinking into financial oblivion. The actual goal is to make more money, accomplished by:
- Increasing throughput or sales
- Reducing inventory processes and sub component investments to be sold
- Reducing operating expenses – money spent to convert inventory into throughput.
So begins the tale. Jonah, like all mystical mentors, takes off, promising he’ll keep in touch, confident that Rogo will eventually figure things out on his own with his occasional input.
Throughout Rogo’s struggles, Jonah remains just out of reach, forcing Alex and this management team to confront his company’s traditional way of thinking that’s stifling true growth and economic success.
Rogo and his team works together to form a solution. They develop a new manufacturing and accounting system that increases efficiency, which allows the sales department to develop new campaigns, promising unheard of delivery dates.
There’s a kind of tug of war between Rogo’s team and the sales department, but Rogo is able to pull it off, resulting in upper-level management’s cancellation of the plant’s closing
What Alex and his team learns is that the Theory of Constraints is actually a new way of analyzing his plant’s manufacturing processes, that the process itself consists of several links daisy-chained together, that can and do fluctuate statistically, limiting the capacity of the entire manufacturing process by slowing down the mini-processes at every step.
After identifying several key links that are affecting production, Rogo’s team implements changes, which work for a while. They increase performance of each bottleneck by looking at each not as part of the process, but at what stage of the manufacturing process each occurs and why.
They discover that bottlenecks shift at any time, requiring new methods to quickly identify and overcome them, by making quick changes bypassing traditional committee thinking. In so doing they not only increase efficiencies, but make money. Something which upper-level management must be reminded of that is the actual goal, not just proficiency stats that look good on paper, but suck in the real world.
The Goal has its share of unexpected plot twists
Goldratt and Cox don’t weave a nail-biting thriller, but they work in unexpected twists, occurring when the team overcomes one obstacle only to discover another has popped up in its place.
The authors illustrate how we sometimes stumble into serendipity, such as when Rogo is on a Scout Troop hike and discovers that an overweight Scout named Herbie controls the rate at which the entire troop walks.
Herbie is the bottleneck that must be controlled. His solution works and Rogo successfully applies it to his production team’s on-going process.
The Socratic method used illustrates how Rogo’s team challenges and breaks the mindset of traditional thinking by focusing on the real goal of any company.
They learn not to focus and maintain efficiencies in light of diminishing returns, but to prosper by deducing actual wisdom achieved by tossing consensus thinking out the window.
A winner and highly recommended
What I especially liked about The Goal, is that Goldratt and Cox never specify what is being produced in Rogo’s plant. They encourages the reader to find his or her own solutions by using the same Socratic method to identify obstacles and constraints in their production process.
The solution is to develop a duplicatable step-by-step discovery process that can be applied to any engineering or manufacturing challenge. In fact, this process can be applied to nearly any business model, from the small business online seller, blogger or brick-and-mortar business owner. There’s virtually no limit as to which type of business The Goal’s Theory of Constraint applies.
I enjoyed seeing how a typical manufacturing team approaches a problem initially paralyzed by traditional we’ve-always-done-things-this-way assumptions, only to discover that what they thought was true was all wrong. It was the interaction of team members that I found especially interesting.
This is a remarkable textbook/novel penetrating traditional management which is actually the main constraint. Anyone in management or in any university business program should invest in a copy of the book and keep it as a reference tool. It’s also required in many MBA programs. So if you want to further your studies and expertise.
I highly recommend The Goal.