Beyond The Goal: Eliyahu Goldratt

In this audiobook, Dr. Goldratt builds his premise on this sentence: 

“Technology can bring benefits if and only if it diminishes a limitation.”

Reread it and think about it for a minute. 

Do you agree?  

Disagree? 

Why?

He goes on to explain that the limitation might be an unrecognized limitation. 

Here is an example: 200 years ago people had to work within a few miles of their home. This was due to the time it took to travel these distances on a daily basis without cars was too far. People back then didn’t see this as a limitation because it was the same for everyone. This mobility limitation was obvious and thus not recognized because it was seen as a fact of life. And yet this fact of life was a limitation.

We developed rules to help accommodate the limitation. The unwritten rule and accepted understanding was that you must work close to where you live.

What benefits will any technology bring if we neglect to break the rules that accommodate the previous limitation?

None.  

If we obey the same rules that helped accommodate the limitation then the technology brings little to no benefits.

Here is an example: If we have cars but still obey the rule to work within a few miles of our home, then we are not gaining the added employment opportunities of owning that car. The old rules must be shed with the new technology to get the most value from that technology.

This seems obvious and yet it’s often missed. When selling a new technology how often are the salespeople addressing old ways of thinking and changes that must be made to get the maximum value from that technology? 

This challenging of old rules or old beliefs is what makes the Challenger Sales Person so effective.

Here are a series of questions to ask yourself in sequence to ensure that your technology once implemented will bring bottom line benefits:

1. What is the power of the technology? (Don’t be impressed with the power. We must ask the next question or we will be bound by same rules as before and waste it.)
2. What limitation does this technology diminish?  (We must identify precisely what limitation it diminishes.)
3. What rules helped us to accommodate the limitation? (If we don’t identify these rules then the chances that we will live within them is huge. It is part of our fabric and how we behave and must be removed.)
4. What rules should we use now?  (This is not always the opposite of the old rules.)

Asking these questions will help any provider or user of technology maximize the benefits they gain from that technology. The orders of magnitude improvements come when you have a powerful technology coupled with a change in the rules that were in place to accommodate the previous limitation. I equate the change of rules to a challenging of assumptions as often the unspoken rules we live by are just assumptions that need to be continuously challenged when new technology is introduced.

New Technology + Changing Old Assumptions (Rules) = Maximum Value

Following this sequence with technology solutions will help clients realize the bottom line results they expect. Both sales reps and buyers should be aware of these questions and ponder them before making a sale or a purchase.

Local Optimization vs Holistic Optimization

Another big lesson from Goldratt is the idea of Local Optimization vs Holistic Optimization. Local Optimization is the practice of making decisions based only on local goals and information. It neglects to view the company or system as a whole and instead focuses on a small part of the whole system. 

Here is an example: In a manufacturing plant a machine will have different work orders that it will need to perform. This is only one machine in a system that produces finished goods. When local optimization is the process, the managers will look only at their machine and the orders in queue and make a decision based on that local information. This is much better than just randomly choosing which tasks to complete but much worse than the holistic approach. In contrast a Holistic Optimization will look at the system as a whole and make decisions on the local levels that are best for the system or company. The local level will look at the system and if they see that a machine in the system is down, then producing parts that need that machine will just cause an excess in inventory and a larger back up at that machine. It’s best not to push parts to that machine until it is caught up. This holistic view helps the local silos make decisions that are better for the system as a whole. This will positively affect the company's bottom line.

Can you think of an example in your organization where a group of people (sales, marketing, CSM, Development, Operations, Customer Service, etc) is only looking at local data to make decisions?

How does this affect the rest of the organization?

There are great insights and actionable items to help better any organization by moving from a Local Optimization focus to a Holistic Optimization focus. Some thought on this will be time well spent.

This 8 part audio series has loads of great leanings and paradigm shifts. It’s in the form of a lecture where Eliyahu Goldratt builds his premises in a very logical and scientific manner with lots of relevant examples. His way of teaching can be described as the Socratic Method where he leads the listener down a path of self discovery through his guidance. I think this series is highly valuable and I would recommend reading The Goal before hand. Having that base knowledge will help you understand the full implications of Goldratts’ ideas. This is a very interesting listen that I will be reviewing for some time to come.

Enjoy!