Review #1 – The Goal: A Process of Ongoing Improvement

Author: Eliyahu M. Goldratt.

Genre: business fiction.

Target Audience: business professionals, particularly those interested in improving performance.

Length: 337 pages.

First Published: 1984.

Review: 

This is by far one of my favorite business books. It’s one of the few books that I’ve read more than once. It was the first book published by Eli Goldratt, in which he articulates the Theory of Constraints. TOC may be the most effective management philosophy you have never used (or have never heard of for that matter). Without a doubt, this book changed and improved the way I approach business problems.

There are many other management methodologies aimed at ongoing improvement, including but not limited to Lean, Six Sigma, and Agile. These and TOC are not mutually exclusive. They are complementary. However, TOC is exceptional in that it provides guidance in answering all of the following questions:

  1. What to change?
  2. What to change to?
  3. How to cause the change?

Lean, Six Sigma, Agile and other continuous improvement methodologies can be effective regarding how to cause the change. However, they are not as helpful in answering the questions what to change and what to change to.

Essentially, TOC emphasizes focus. It states that businesses are systems (in the most general sense; not in the software sense), which can be viewed as chains. The products or services a company provides to its customers are the output of those chains. The chains are only as strong as the weakest links or constraints. All systems or businesses have constraints. If they didn’t have constraints, then their potential profit would be infinite. Therefore, the focus should always be on the constraints. Improving the strength of a link other than the weakest link does not improve the strength of a chain. Therefore, time spent improving non-constraints is time wasted.

In the book, Goldratt outlines the five focusing steps:

  1. Identify the system’s bottlenecks or constraints
  2. Decide how to exploit the bottlenecks
  3. Subordinate everything else to the above decision
  4. Elevate the system’s bottlenecks
  5. If, in a previous step, the bottleneck has been broken, go back to Step 1

TOC is based upon the scientific method. While the effectiveness of the scientific method is proven, it is applied infrequently to business problems.

In the book, the main character Alex makes the observation, “It’s how physicists approach a subject; it’s so vastly different from what we do in business. They don’t start by collecting as much data as possible. On the contrary, they start with one phenomenon, some fact of life, almost randomly chosen, and then they raise a hypothesis: a speculation of a plausible case for the existence of the fact. And here’s the interesting part. It all seems to be based on one key relationship: IF … THEN.”

Goldratt was trained as a physicist. Don’t let that deter you. TOC is simple, and it is powerful. Also, while the book is written in the context of manufacturing, it applies as well to all other types of business.

Lastly, this book is written as a novel, which makes it much more fun to read than most business books. This was intentional. Goldratt realized that most people don’t like reading most business books so he crafted it as a novel. Also, the character Jonah uses the Socratic method, which makes the main character Alex – and the reader – really think.

If you have not read it already, I strongly recommend you read it and begin applying the principles of TOC.

Related Books:

  • Critical Chain (Goldratt)
  • Necessary But Not Sufficient (Goldratt)
  • The Phoenix Project (Kim, Behr, and Spafford)

Buy It Here!

 

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