The Goal: A Process of Ongoing Improvement [Paperback]

This novel succeeds in being outstanding at so many levels that it could receive a multiple of five stars. It is hard to imagine a management book in novel form ever approaching this one in usefulness. Most people will learn more that they can apply from this book about management than many people learn to apply from an M.B.A.

The basic story is built around the dilemmas facing Alex Rogo, a newly-appointed plant manager. The plant can't seem to ship, it's losing money, and bad things can happen to good people if all this doesn't change soon. Alex is at a loss for what to do until he pulls out a cigar that Jonah, a physicist from Israel, had recently given him. That cigar reminds him to contact Jonah for possible help. From there, the path to recovery begins.

Let me describe some of the many levels on which this novel is valuable.

First, the book explains how to see businesses as systems as well as any other book on this subject. It compares favorably in this area to such important works as The Fifth Discipline and the Fifth Discipline Handbook. The metaphor of how to speed up a slow-moving group of boy scouts will be visceral to anyone who has done any hiking with a group.

Second, the book helps you learn how to improve the performance of a system by providing you with a replicable process that you can apply to analyzing any human or engineering system. The primary metaphor is improving a manufacturing process, but the same principles apply more broadly to other circumstances.

Third, you will experience the power of the Socratic method as a way to stimulate your mind to learn, and to use Socratic questions to stimulate the minds of others to become better thinkers and doers.

Fourth, the authors also use problem simulation as a practical way to help you experience the learning process they are advocating.

Fifth, the book is unusually good in bringing home the consequences of letting your business process run in a vicious cycle: Your family life may also.

The pacing of the book is especially good. You are given time to stew with issues and come up with your own ideas before sample answers are provided by Alex and his staff in the novel.

Unlike many books that take complicated ideas and oversimplify them so the ideas lose their meaning, this book simplifies ideas in ways that enhance their meaning by making the ideas easier to see and employ.

If you do not understand all of the ins and outs of typical factory accounting, you may get a little lost from time to time. But that's not a problem. That accounting just distorts common perceptions of what needs to be done. You can safely skip anything you don't understand if you don't have to deal with such issues.

While I did not observe any overt errors in the book, companies that do not put an asset charge on operational assets could make the mistake from this book of seeking too little profit. You need to earn on-going returns that exceed your cost of capital, too.

You will get the most from this book if you read The Fifth Discipline following it (if you have not read that book already). The discussion of the beer game simulation in The Fifth Discipline will add to your understanding of system dynamics.

Following that book, I suggest that you then read The Balanced Scorecard and The Strategy-Focused Organization for ideas about how to use goals, measurements, and rewards to concentrate attention onto the highest leverage areas for your system.

After you have finished employing what you have learned and helping others around you to learn more also, I suggest that you think about how to optimize the full upside potential more rapidly through the use of irresistible forces and 2,000 percent solutions to speed your progress. That should leave you with even more success and more time to enjoy it.

Unblock the constraints on your progress!

Everyone can spot a myriad of problems within any business and in too many cases people try tackling all of them. This amounts to a huge game of 'whack a rat', that circus game where plastic rodents appear out of holes and you bash them with a big rubber hammer to make them go away. Only each time you get rid of one rat, or problem, another appears from a different hole and before long there are loads of problems springing up all over the place. You end up running round in circles trying to fix a never ending growing list of problems. Sound familiar?

The Goal is a business novel set at a manufacturing plant. Don't let this put you off if you're in a business or department that doesn't manufacturing! The physical nature of the problems described in the book helps you to visualise the core message that Goldratt's putting across: The Theory of Constraints (TOC) in which any system can be viewed as a 'chain' and somewhere in that chain is a weak link that limits the throughput of the entire system. Using TOC to correctly identify the weak link, or 'constraint', is a vital first step to solving a multitude of problems. The book goes on to explain how to work with the constraint from a holistic perspective enabling you to focus your activities where they will have the highest possible beneficial impact on your business for the least amount of effort. In other words, TOC tells you which rat to whack!

I've now encountered a few people who've read this book and somehow come away with the impression that it's telling you to focus on local optima -this is certainly not the case. If, after reading the book, you have this view then I'd highly recommend reading The Logical Thinking Process by Dettmer.

TOC in itself is obvious - once you understand it. You'll wonder how you managed to get anything done in the past and recount countless unnecessary endeavours that you would have avoided had you known about TOC sooner.

Other highly recommended books include:

* Goldratt - It's Not Luck (sequel to The Goal)
* Goldratt - The Choice - the simple reasoning that underpins both TOC and also The Logical Thinking Process
* Dettmer - The Logical Thinking Process - one of the greatest works on TOC and TLTP in my opinion
* Various authors - Velocity - great explanation of how to make Lean and Six Sigma deliver results by focussing them with TOC
* Klarman - Release the Hostages - one of the few service orientated TOC books I've found

But before reading any of those, start with The Goal - it's a great introduction to TOC.

There aren't too many 'interesting' management books out there. This one is. By creating characters in a manufacturing plant and putting them in a story, that I'm sure we can all relate to, the author has produced a bit of a masterpiece. It is an old book - written before mobile phones and computers ran the world - so some predicaments are no longer valid. Also, it may teach you to suck eggs in places and some of the situations are a little too contrived.

But, on the whole, an excellent management book. A real page-turner.