By Brian Phillips The Goal: A Process of Ongoing Improvement , by Eliyahu Goldratt, was first published in 1984 and has become one of the most popular business books ever published.
Written in novel form, The Goal traces the story of a struggling factory and how its employees turned it into a profitable operation. By identifying “bottlenecks” managers were better able to manage resources and improve overall production.
The Theory of Constraints introduced in the novel states that the maximum output is limited to the maximum output of the “bottleneck”. Put into other terms, a chain is only as strong as its weakest link.
As the story unfolds we learn that managers often focus on the wrong things. While statistics and measurements can be useful tools, they are valuable only to the extent they help us achieve our primary goal. And in the context of business, all companies share the same primary goal– to make a profit.
Measurements of efficiency, for example, can be misleading. If we focus on maximizing the efficiency of each step of a process, we might actually decrease the efficiency of the overall process. That is, we must look at the big picture before we look at the details. And when we examine the details, we must always remain focused on the big picture.
In the context of a factory (the setting for the novel), this might mean keeping a particular machine idle at times. If the machine produces more than the next step of the process can handle, the excess accumulates as inventory. Both the inventory and the manpower used to produce and move increase expenses. In this situation management should focus on increasing “throughput”, that is, the amount of product available for sale.
The significant message in The Goal is the process of discovering and correcting “bottlenecks”. But this process is not a one-time event. It is a continuous process, or as the subtitle states: “a process of ongoing improvement.”
By Brian Phillips If you are like most small business owners, you frequently experience frustrations and/ or undesired results. Employees who do not always perform as you would like, deliveries that arrive late, payments that aren’t collected promptly, poor quality work, and a myriad of other problems can torment the owner of a small business.
Most problems in a small business result from 1 of 2 causes: a lack of systems and procedures, or the procedure was not properly followed.
Consistent actions lead to consistent results. If we know the results we desire, and the actions that will lead to that result, successful performance is simply a matter of following the proper course of action. In other words, if A causes B, and we want B, then we should do A. If cooking the burger for 4 minutes on each side cooks it perfectly, then we should always cook a patty for 4 minutes on each side.
This may seem like an over simplification, but the truth is, actions have consequences. And those consequences are usually predictable. Thus, our business can achieve consistent, desirable results if we consistently take the proper actions.
Undesired results are a signal that we have not taken the appropriate actions. When we experience a problem or frustration within our business, we should view it as an opportunity to correct or implement a system. If customers are complaining that their burgers are undercooked, it is very likely that we didn’t cook it for 4 minutes on each side.
By developing and implementing systems in our business, we will consistently take the actions that produce the results we desire. If we want to prepare the perfect burger, then we must cook the meat properly, toast the bun, and assemble the ingredients in the proper amounts and in the proper order. If we want to operate a successful business we must similarly assemble its “ingredients”. Systems provide the guidelines and the standards for doing so.
By Brian Phillips As business owners we are often eager to improve the operations of our business. Unfortunately, we often meet resistance from employees. This presents a challenge to the owner who wishes to improve his business. If employees will not make changes in their behavior, improvements are very difficult.
The key to overcoming the employee’s fear of change is to create an incentive for them. While money is not the only incentive, it is usually a powerful motivator. If the desired changes will result in increased profits, a bonus system to share those additional profits with employees can help them overcome their fears.
Enlisting employees in the improvement process can also help. When an owner acts like a benevolent dictator and imposes change on the employees, they often resist. However, if the employees are involved in the process of identifying and planning the needed changes–through a process like Total Quality Meetings–they are much more likely to “buy in”.
Involving employees can begin by simply asking them what improvements they would like to see. Ask them what frustrations they experience in their job. The answers may surprise you, and prove enlightening. Too often owners view the business only from their perspective. Employees however, often have a much different perspective.
Owners typically embrace change much more readily than employees. Consequently, the owner must address the concerns and fears of his employees. He must help them see the benefits of change. If he can make them willing participants the changes will be far more effective.
At the same time, the owner must set realistic expectations regarding the speed and extent of change. In this regard, slow but steady change is ultimately more effective than rapid change that is quickly abandoned.
Employees are a part of your team. If you want them to perform at their best, help them help you. If you work together they will be much more willing to help you build the business you want to own.
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