Sunday, March 22, 2015

Goldratt's "The Goal": Strong Foundation, Weak Structure



I haven’t read that many business books. The ones I have are usually more poorly written than the economics books I read. I know that there is often a dedicated course in business writing in the academy, but in my experience, it isn’t a focus of the program.
So when I was assigned a long business book as additional reading for my operations management class, I wasn’t too jazzed. I was pleasantly surprised though, the Goal isn’t that bad.

To talk about the Goal, I have to talk about the structure. It is a 330-page business novel.  I had no sense on going in what a business novel would be like, and it is basically that, a novel with plot and characters.

The problem is that it is a didactic novel. That means it is teaching you something. And in that role, it is often very heavy handed. The plot is that Alex, the main character who we get to enjoy present tense first person narration though, has been promoted to be the plant manager of his hometown plant. It is not producing the profits that corporate would like to see. On top of that, the orders are late and they’re always in a rush. So corporate comes down and gives Alex an ultimatum – you have three months to turn around the plant or we will look into closing it.          

So what does Alex do? Thankfully, Alex meets an old physics teacher friend of his named Jonah, who happens to be an internationally famous business consultant. The problem here is that Jonah is always busy, so he can’t handhold Alex to improve the plant. This device is here so that you as the reader and the character of Alex isn’t told straight up what changes to make. You/Alex need to find from the stated principles to improve the plant. The whole thing is based on the idea of the Socratic dialogue –where the teacher doesn’t tell you anything but the educate is a coming to knowledge of the student. It’s really heavy-handed, since the author mentions it in the introduction and also has a subplot where Alex’s wife starts reading philosophy and they have a couple dialogue exposition-dump conversations.
Ultimately, Alex does come up with a process of improvement where he takes some of the old rules off the board and looks at defining the ultimate goal of the plant vis a vis the company and what he can do to help the plant meet those goals. He and his team identify bottlenecks in the plant, reimagine them, and the plant is a success. He is promoted to district manager at the end, and he and his team start to see how they could apply the more general principles they had determined to processes that are harder to define than movement of material in a plant. For me, the end was the weakest part because I work in service and I kept trying to figure out how this could apply to me in my job. I still haven’t and I hope there was a sequel or something that applies the goal to a larger organization.
The general processes that Alex worked out by way of Jonah (who is a total stand-in for the author) are:      


1) Identify the system’s constraints
2) Decide how to exploit the system’s constraints.
3) Subordinate everything else to the above decisions
4) Elevate the system’s constraints
5) If in the previous steps, a constraint has been broken, go back to step 1, but do not allow inertia to cause a system constraint.
 
They sound like good general principles, and they work in the book. I do have some issues with the book and the idea though. First of all, the structure of the book feels entirely unnecessary. We as the reader have very little context for what the company Alex works for even makes. It is just some generalized manufacturing plant in a nameless town. That means the process described in the book cannot be fully trusted to have worked. I would like to see evidence-based material to prove that the process works. As it, it might as well be like the mystery writer who cannot really solve mysteries but just knows what he wants at the end so he can work backwards.
Second, the novel approach is just weird. It makes the book longer by three times than it could be to convey the same information. For example, there is a part in the book where the main character takes his son on a walk in the woods with the rest of the Boy Scout troop. The whole thing is just in there to illustrate that any process is only as strong as its weakest link or as fast as its slowest part. And it takes a long time to do so. The characters never really develop a secondary consideration. There’s a whole subplot where Alex and his wife are fighting and she ends up moving out for a while and it is just ridiculous. As a reader of fiction, it is horrible. You don’t know why these characters are in love in the first place and their reconciliation is unbelievable. It is also completely unnecessary for what Goldratt is trying to teach in his book. It just adds pages and I still never really cared about the characters.
Smaller things nagged as well.  For example, what is it about the impetus to restructure the company? Do you need to be close to failure to rethink your processes? Alex only went ahead with it because he had nothing to lose. That gave him reason to change. If things are working well enough at work, why change, even if efficiencies can be found? Another is that this book has been around a while now. Are efficiencies still possible? Or does every generation of managers have to relearn the same general principle here? Further – with the decline of manufacturing in the states to more labor-intensive countries, did the companies that embraced the goal succeed? There’s no indication in the book of the real world, so that bugged me.       
                
One last thing. Alex always refers to the cars he and his wife owns by their make. He has a Mazda, and she has an Accord. If he works in domestic manufacturing, why the heck does his family have two foreign cars?