Monday, June 20, 2005

The Goal, by Goldratt and Cox

The Goal: A Process of Ongoing Improvement, by Eliyahu M. Goldratt and Jeff Cox

Unlike most management books, instead of being a collection of anecdotes told to support a central premise, this one is a novel—a true tale of fiction. (While bookstores probably shelve this with the other business texts, my local library puts it in the fiction section which probably reduces the chances of browsing across it.) The Goal tells the story of a plant manager that takes an underperforming factory and turns it into the market leader. The business value comes from examining how and why this was able to happen. There is also a side-story about how the manager saves his marriage that I suppose is supposed to parallel the success of the plant, but I found this distracting and unneeded.

I suspect that various people will take away different things from this book, which is a good indication of why it is so popular. For me, this reinforced my belief that understanding priorities is one of the most useful (and under-used) tools that we can use to make decisions. The goal of the plant is to make money, but instead of being measured by how much money it generates, it is measured by the cost to operate the various internal machinery. Once the hero and his team realize this, they change their priorities to emphasize total throughput instead of making the individual steps more efficient. A sort of “the good of the many outweighs the good of the few” moment. The chapters where we are taken through an example of why point optimizations don’t equal overall improvements were particularly interesting, if a bit contrived. The context is watching a single-file line of hikers and examining why the gaps between them expand and contract at different rates. The boys are named in alphabetical order (Andy, Ben, Chuck, Dave, and Evan) which for some reason I found jarring in a supposed novel.

While Tom Clancy doesn’t have much to worry about, I found a novel to be a refreshing approach for discussing what is pretty dry topic. I’d recommend this to anyone that is trying to understand how decisions should get made or how to improve a process. If you are just looking for an entertaining story, though, I’d keep looking.

First Sentence:
I come through the gate this morning at 7:30 and I can see it from across the lot: the crimson Mercedes.


Anonymous said...

An accounting professor at Texas A&M and two of his colleagues have written a novel to teach accounting. I haven't read it, though.

Klobetime said...

Looks interesting. I added it to my wish list, even if it was written by aggies!

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