Business Success is no Accident: Here are the 5 Steps – My Takeaways from The Goal by Eliyahu M. Goldratt

Last Friday, I presented my synopsis of the business book classic, The Goal:  A Process of Ongoing Improvement by Eliyahu M. Goldratt & Jeff Cox.  It is a genuine multi-year best seller, and now I know why.  It is an incredibly useful, helpful, practical book.  Written in fable form, it is set in a factory, but, it is useful for getting any company, any organization, and really, any human life back on the “best track.”

Here are the key points that I included on my handout for my presentation:

Why is this book worth our time?  It deals with this key issue: 

We are not as productive, as profitable, as we could be.  Some thing (some one, some process) is holding us back.  Don’t let this hold you back.

And here’s the solution that the book describes, in usable detail:

• Be crystal clear about your goal.
• Identify your bottleneck – what is keeping you from your goal?
• Get rid of the bottleneck.
• Now, identify your next bottleneck.  (There will be; there will always be!; a next bottleneck).

The book lists the five steps of the process to follow:

#1 — IDENTIFY the system’s constraint(s).
# 2 — Decide how to EXPLOIT the system’s constraint(s).
# 3 — SUBORDINATE everything else to the above decision.
# 4 — ELEVATE the system’s constraint(s).
#5 — WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system’s constraint.

Here is a more complete description of the problem facing many organizations (and people):

• You are not clear about your goal.  (What is in front of your face makes you forget the bigger picture.  You may not have even ever gotten clear on the bigger picture – your “goal”).
• You (your organization) are not productive, or profitable, in all the ways you could be
• Something is slowing you down – something is causing the bottleneck
• You don’t know what this problem is
• You don’t know how this problem interacts with other problems
• Once you identify it, and “fix it,” then…  you have to repeat the process to find the next new problem.  In other words, there is always a slowest point, a “bottleneck” – that you can make much less of a bottleneck
• And, though you want to identify a machine, a piece of software, something physical/tangible, a person, as the bottleneck, it is very likely that the bottleneck is a process bottleneck.  Look for the process bottleneck.

And here are my takeaways from the book:

1. The Theory of Constraints (TOC) means:
there is a (current) constraint (bottleneck).  Find the constraint, fix it, get a better process, then find the next restraint:  (“A chain is no stronger than its weakest link”).

2.  So –
• do you have the right equipment (software; tools)?
• do you have the right people?
• do you have the right processes?

3.  When time is short, you get moving….
• Maybe we should always “pretend” that time is short.

There are reasons that books sell over the long haul.  Usually, they deal with the true “basics” of success at business (and all-of-life) endeavor.  This book does that very well, and does not disappoint.

Coming for the August 3 First Friday Book Synopsis – Platform, & Goldratt’s The Goal

Here are two important business success issues:

#1 — how do I successfully get people to listen to my message?
and
#2 — how do I find, and get rid of, whatever is slowing us down in our company?

Solve these 2 issues, and your path to business success becomes a little clearer.

At the August 3 First Friday Book Synopsis, Karl Krayer will present his synopsis of the book Platform: Get Noticed in a Noisy World  by Michael Hyatt.  (Thomas Nelson.  2012).  This book is designed to help you develop specific steps to clarify your message, refine your message, and get your message heard.

I am going to present the business classic The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt and Jeff Cox.  (North River Pr. — 3rd Revised edition:  July 2004).  We normally only present “new” books at the First Friday Book Synopsis, but we have occasionally presented books that fit in the category of “business book classics.”  A few years ago, I presented my synopsis of Servant Leadership by Robert Greenleaf.  Greenleaf coined the phrase “servant leadership,” a concept that has stood the test of time.   I believe his work should be discovered and rediscovered by every generation of business leadership.

The Goal is apparently that kind of book.

I was prompted to make this selection by an article in Slate.com by Seth Stevenson.  His article started with this:

When I began to gather information for this Slate series on operations management, I asked a few business-school professors to recommend books I might read on the topic. I expected I’d be pointed toward textbooks and manuals—perhaps written by the professors themselves, or by celebrity CEOs. Instead, I was urged to read a novel by a dead Israeli physicist.

And I blogged about the book in this post:  “The Fat Kid Is The Bottleneck!” – (Eli Goldratt’s The Goal, And A Thought About Expertise).

This will be a valuable session as you try to find out just what it is that is slowing you down now, and then how to develop the kind of powers of observation to always be on the lookout for what will slow you down once this current “bottleneck” is unclogged.

If you are in the DFW area, please join us for the August 3 First Friday Book Synopsis.  (You will be able to register soon from our home page).  Great networking; a terrific, full-service omelet bar/full buffet breakfast; and good challenging content.  It is a great way to spend an early Friday morning. (By the way, we have presented two books a month, every month, since April, 1998 — over 14 years!).

Come join us.

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ROAR! : A book review by Bob Morris

 
ROAR! Get Heard in the Sales and Marketing Jungle
Kevin Daum with Daniel A. Turner
John Wiley & Sons (2010)

How to “break through all that noise and visual stimulation to get to the core of the customer”

What we have here is another business fable, a very popular sub-genre for business book authors in recent years. In those in which their authors rely on anthropomorphism and personification, cheese keeps being moved mysteriously, icebergs are melting, and squirrels are reluctant to trust their acorns to a storage company. In others in which the focus is on human characters, the best of them include those written by Eliyahu Goldratt and his co-authors (e.g. The Goal: A Process of Ongoing Improvement) and those written by Patrick Lencioni (e.g. Silos, Politics and Turf Wars: A Leadership Fable About Destroying the Barriers That Turn Colleagues Into Competitors). Kevin Daum wrote ROAR! with Daniel A. Turner and, in my opinion, the book it most resembles is Matthew May’s The Shibumi Strategy: A Powerful Way to Create Meaningful Change.

The situation that Daum introduces is a familiar one to most business executives: Ryan Miller is the VP of sales and marketing for a well-established furniture company (Wolfson) that was previously thriving and is now undergoing a very tough period in a marketplace that is becoming increasingly ferocious. How to save the company and probably his job? The answer is suggested (not provided) by a high school classmate whom he unexpectedly encounters. Lenny Goldstein is founder and CEO of Golden Box Packaging. Over a period of several months during lengthy luncheon conversations in the NYC area, Ryan absorbs and digests what Lenny shares, then modifies the concepts (as he should) before applying them to Wolfson’s specific circumstances. How it all works out is best revealed within the book’s narrative.

Others will have their own reasons for praising this book. Here are three of mine. First, Daum demonstrates the skills of a consummate storyteller as he introduces the main characters, sets the scene, then allows the plot to develop at a reasonable pace with plausible developments. There is little (if any) tension because there are few (if any) conflicts and little (if any) doubt that Ryan will achieve his own goals as well as the company’s strategic objectives. This is a content-driven rather than drama-driven business fable.

I also admire Daum’s skill as he explains (using the Lenny persona) how to “break through all that noise and visual stimulation to get to the core of the customer.” Here is a brief excerpt from Chapter 3 on Page 43: “The message is key…It attracts the right clients, but closes only the easy sales for you…Think of sales and marketing like walking through a jungle. It’s noisy, crowded, with everything attacking your senses. Somehow, some way, we have to break through all that noise and visual stimulation to get at the c ore of the customer. Get them to clarify the need and opportunity, amid the chaos of the jungle.” Lenny walks Ryan (and the reader) through the process of formulating an appropriate Value Proposition. (Be sure to pay close attention to the material that examines “the model of pain, solution, and best provider.”) He also explains how his own company defines four buyer segments (i.e. Wise, Cynical, Simple, and “Unwilling to Ask”) and formulates strategies and tactics to maximize its appeal to those in each segment.

Finally, I was intrigued by what Lenny characterizes as a “3,500-year-old secret” that involves a process also best revealed within the book’s narrative. However, I think most readers will agree with me that it is an insight well-worth knowing.  After an Epilogue and a “Summary of ROAR! Concepts,” Daum shares this in the next section, “Integrating the ROAR! Approach”:

“The key to the success for both the value proposition and the four buys approach is to fully integrate them into your sales and marketing. What’s the point of developing powerfully compelling messaging of your web site, collateral, and salespeople are all communicating different messages and are leaving out half the potential customers?”

If there is another business fable that offers more and better advice about “how to “break through all that noise and visual stimulation to get to the core of the customer,” please let me know.

Jason Fried and David Heinemeier Hansson on embracing constraints

Jason Fried

Here is a series of brief excerpts from one of the chapters in Rework, co-authored by Jason Fried and David Heinemeier Hansson. It was published by Crown Business/Random House in 2010.

* * *

“I don’t have enough time/money/people/experience.” Stop whining. Less is a good thing. Constraints are advantages in disguise. Limited resources force you to make do with what you’ve got. There’s no room for waste. And that forces you to be creative.

For example, “Southwest – unlike most other airlines, which fly multiple aircraft models – flies only Boeing 737s. As a result, every Southwest pilot, flight attendant, and ground crew member can work any flight. Plus, all of Southwest’s parts fit all of its planes. All that means lower costs and a business that’s easier to run. They made it easy on themselves.

“These days, we [i.e. 37signals, a software company that Fried and Hansson co-founded years ago] have more resources and people, but we still force constraints. We make sure to have only one or two people working on a product at a time. And we always keep features to a minimum. Boxing ourselves in this way prevents us from creating bloated products.

“So before you sing the ‘not enough’ blues, see how far you can get with what you have.”

David Heinemeier Hansson

* * *

Although Eliyahu Goldratt introduced a similar concept in Theory of Constraints in 1990, I think his most important work is The Goal: A Process of Ongoing Improvement (first published in 1984 and most recently revised 2004). In it, Goldratt develops the concept to a much greater extent.