Goal: A Process of Ongoing

¶ … Goal: A Process of Ongoing Improvement Eliyahu M. Goldratt illustrates how large business operations, in this case a manufacturing plant, can become inefficient and lose money by not having a simple clear goal for which to strive. Goldratt uses the protagonist, the plant manager by the name of Alex Rogo, in a first-person voice to illustrate the gross inefficiencies of the plant and how his former professor, Jonah, guides him to implementing an organization-wide goal and how to alter processes, management, and decisions to achieve it.

Goldratt illustrates the company's main problem -- not having a logical goal -- in the opening part of the book by describing in detail how an upper level manager stormed into the plant one day early and turned it upside down, pulling employees off of projects and putting them to work on one that was nearly two months behind in shipment.

As the book progresses we see that delays in shipping are an ever growing problem in the plant, due in large part to the manager not knowing how to prioritize tasks, expenditures, and energy. Alex is further hampered by a "pass the buck" approach at the plant where problems are blamed on other parties rather than addressed and solved. Goldratt's observations ring just as true today as they did when he wrote the novel in the mid-1980s.

With companies like Enron cooking their books to look successful, financial advisors like Bernard Madoff devising quasi-pyramid schemes to attract investors and banks folding due to investment in sub-prime mortgages and other poisoned assets, it seems that businesses have forgotten a simple concept -- people need to be realistic and work together in cooperation, not competition, to be successful. Success should be measured by only one component, its bottom line.

It is this simple concept that ultimately saves Alex's plant from being closed and Alex's job from being sold or cut altogether. The concept of making simply stated clear goals and planning all operations around achieving that goal is easy to understand, but often difficult to execute, especially when participating parties add priorities or tasks. In the Goal, for example, Alex boasted to Jonah about the fancy robotics the company acquired to improve efficiency.

Jonah pointed out that while the machines helped improve one process, the company was no more efficient because the robots did not increase profits and, in fact, added to expenses. A similar misunderstanding happened recently at a small high school that was trying to increase the amount of time its students spent reading. The committee that was charged with creating a reading incentive program was granted a small amount of money from the district's school board for which to purchase incentives for students to read.

The money was supposed to help in the effort to increase reading, but it came with some requirements that it ended up leading to the program's failure. The money was supposed to be used for the entire school, which has students in grades seven through twelve. After some research the committee determined that a reading incentive program would be better suited for students in grades seven and eight as high school students find such programs too childish.

The board, however, refused to support a program unless all six grades were involved. Another limitation was that there was not enough money to spend for individual prizes and the logistics for school-wide incentives, such as showing movies in the auditorium or making the gym available during the last period of the day once a month, were too difficult to execute successfully.

Had the committee been allowed to make decisions based on its specific goal, to get more students to read, it would have implemented a successful progressive reading incentive program for students in grades seven and eight only. But graduates of the reading incentive program, having read more books, would have developed better reading habits. Another concept that Goldratt introduced was that of the "bottleneck" or things, processes, and people that were blocking progress toward the goal.

Goldratt illustrates the concept of "bottleneck" by describing a camping trip Alex Rogo goes on with his son. A camper, Herbie, who walks more slowly than the rest of them, slows the Boy Scout troop down considerably. Hours into the hike Alex decides to look into the reason for Herbie's slow pace and discovers that the boy has an exceptionally heavy backpack. After distributing items to other campers, the troop walks much more quickly and makes it to the campsite before nightfall. Bottlenecks come in many forms, including people.

At the afore described high school reading incentive program, one such bottleneck was the literacy coach who had been hired for the year implement the reading incentive and other literacy programs. The coach was a former elementary school teacher with very little experience working in a high school or working as a literacy coach. Her job depended on her overseeing multiple projects and fostering cooperation with other teachers but she lacked the organizational skills necessary to coordinate multiple tasks simultaneously.

In addition, her attempts to foster cooperation among the staff fell flat when news of her salary, which was nearly double what many of the teachers made, and her schedule (only three days a week) was made public. Few teachers wanted to help out someone who was paid far more and worked fewer days than them. A better approach toward this goal would have been to establish committee run by teachers from every department.

That way, more of the teachers would have been able to provide input, felt more involved in the process and had more ownership toward the project. While having more than one person in charge of a program is harder to coordinate, in the end it would have proved more successful because more people would have felt more accountability toward the outcomes and less resentment toward a "boss" who was making more and working less.

The Climb: Tragic Ambitions on Everest is a book told by Anatoli Boukreev, a head expedition guide for Mount Everest to G. Weston DeWalt, a writer, about the tragic 1996 expedition up Everest that resulted in the death of five hikers. In the book Boukreev describes the system set up by various mountain climbing companies to climb Everest. Mountain climbing expeditions are very risky and the bigger the challenge, the higher the risk.

The vast majority of people who run mountain climbing expedition companies are first and foremost climbers, with their roles as businessmen being of secondary importance. But lack of business acumen was only a small part of the reason behind the tragedy of the 1996 Everest expedition. Many of the components that led to a tragic end to the 1996 Everest expedition are similar to those that led to the near collapse of UniCo., the company profiled in the novel the Goal.

In the Climb Boukreev describes the system set in place by which expedition groups must follow to climb Everest. Climbing groups must first be granted permits by the Nepalese government to ascend the mountain. Permits are given for a very short period of time in the summer when the weather on the mountain is expected to clear long enough to allow for a safe ascent to and descent from the summit.

As Everest is the highest mountain in the world, there are many, many individuals who wish to take the challenge and are willing to pay significant amounts of money, tens of thousands of dollars per climber, to be able to stand on the world's tallest peak. While the challenge of Everest presents a great business opportunity for climbing companies, it is also a great challenge to coordinate all of the groups and people who want to make it to the top and ensure that all persons have a safe journey.

It is clear in the Climb that the leaders of several expeditions up the mountain in 1996: Scotsman Henry Todd of Himalayan Guides, New Zealander Rob Hall of Adventure Consultants Guided Expedition, and American Scott Fischer, leader of Mountain Madness, had one specific goal, get their clients to the top of Everest. The leader of another group, American David Breashears, also wanted to ascend, but did not have the pressure of pleasing paying customers. He was leading a group that was filming the climb for an IMAX movie.

Climbers ascend Mount Everest in stages. They start out at a base camp and then climb up to three different stages on the route. At each stage climbers rest and get more acclimated to the decreasing oxygen. Each stage also provides a place for climbers to assess the weather conditions and decide whether to continue or turn back.

While climbing on the mountain is reserved for the short period of time in the summer when the weather is supposed to be calmer than usual, blizzards are still known to crop up suddenly and wreck havoc on an expedition. For the owners of such companies, the prospect of having to turn back before reaching the top is nearly as devastating as an injury or fatality on the climb because customers pay so much money and expect to make it to the summit.

While climbing a mountain like Everest is never easy, it is less treacherous when the group consists of expert, experienced climbers. In 1996, however, many of the people in the three groups were inexperienced climbers who had anywhere between $10,000 to $65,000 to ascend Everest. The problem was that these people did not know what to do in an emergency and they relied on their leaders for guidance.

Had the members all been more experienced, they would have been better equipped to sense the oncoming storm and less inclined to take risks because they knew the possible outcomes and knew they'd have other chances to attempt a summit. Having a narrow, specific goal (reaching the top of Everest), not heeding the risk of a storm, and not working together more to anticipate bottlenecks at specific points or other problems on the trail were the three main factors that led to the tragedy in 1996.

Reading the Goal closely, one can see parallel mistakes made by UniCo and Rogo that led to the near demise of Rogo's plant. In the Goal, Jonahs points out to his former student.