Top positive review
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A Must Read For Anyone Who Wants To Improve Performance
on 7 November 2016
The Goal: A Process of Ongoing Improvement” by Eliyahu Goldratt and Jeff Cox is an absolute classic book for anyone who is concerned with improving the performance of a manufacturing business or indeed with business improvement in general.
It was first published in 1984 this book introduced the world to the Theory of Constraints and explains how much of the focus on improvement is misguided at best and wrong at worst.
I first read "The Goal" in about 1990 when I was finance director of a manufacturing business. I bought it on the Saturday, finished on the Sunday and gave it my operations director on the Monday.
By 7:00 am the next day, we were in my office discussing how The Goal and the theory of constraints could be put to work in our business because he hadn't gone to bed until he'd finished it.
That’s how compelling the book is..
I think it was one of the first business novels and two stories are interlocked in our hero's life:
1. How he can save his struggling plant from closure because performance was so bad.
2. How he can save his crumbling marriage since his personal life was in crisis because he was pouring so much of himself into saving the business.
Both aspects of the story resonate and The Goal hooks it claws in deeper as you read it and recognise that the symptoms the plant is suffering, echo in your own workplace with high costs, backlogs and the frustration that things just don’t get better as fast as you think they should, despite the best efforts of your team.
The hero has help in the form of a mysterious, wise guru who teaches him the theory of constraints by forcing him to search for answers.
The essential idea is that business is a system, and just as the strength of a chain is determined by its weakest link, a system is constrained by one particular operation – the bottleneck.
The logic is that every system must have a bottleneck because otherwise, output would be infinite. "The Goal" is set in a manufacturing plant and this makes it easy to envisage the constraint more clearly than in a service based business but the ideas still apply.
The main message is that you must focus all your attention on the constraint. Doing anything else doesn't help the system to produce more.
The book is critical of how conventional accounting techniques have warped decision making by giving managers the wrong information. As I originally qualified as an accountant, I have mixed feelings about this. The criticisms are genuine but the solutions are effectively part of the long-standing tools of a management accountant in terms of incremental analysis, marginal costing and contribution per limiting factor. Sadly these common sense techniques were often not used because of the impact of Generally Accepted Accounting Principles (GAAP) and absorption cost accounting.
I have no hesitation in giving "The Goal" five stars as an eye-opening, mind-expanding, must-read book which shows how management education can be built into a powerful story.
If you are involved in performance improvement, buy the book and keep an open mind as you read it. If you are not in manufacturing, you have some work to do to imagine how the theory of constraints fits into service businesses, distribution businesses and retail businesses.
But try because unless you have a business which makes money hand over fist, your business has a constraint and your fastest way to improve it, is to focus on that constraint.
There are other books by Eliyahu Goldratt and about the Theory of Constraints but I believe this is the place to start and build your foundations.
About my book reviews - My goal is to help you to find the best business advice. I aim to be a tough reviewer because the main cost of a book is not the money to buy it but the time needed to read it and absorb the key messages. 5 stars means that I think that overall it has some vital messages in it.
Paul Simister, business coach.