Read The Goal: A Process of Ongoing Improvement Online
Authors: Eliyahu Goldratt
Sometime after the sun has set, Lou decides to go home. I stay. After Lou has gone, I sit there at my desk with a pad of paper in front of me. On the paper, I write down the three measurements which Lou and I agreed are central to knowing if the company is making money: net profit, ROI and cash flow.
I try to figure out if there is one of those three measurements which can be favored at the expense of the other two and allow me to pursue the goal. From experience, I happen to know there are a lot of games the people at the top can play. They can make the organization deliver a bigger net profit this year at the expense of net profit in years to come (don’t fund any R&D, for instance; that kind of thing). They can make a bunch of no-risk decisions and have any one of those measurements look great while the others stink. Aside from that, the ratios between the three might have to vary according to the needs of the business.
But then I sit back.
If I were J. Bart Granby III sitting high atop my company’s corporate tower, and if my control over the company were secure, I wouldn’t want to play any of those games. I wouldn’t want to see one measurement increase while the other two were ignored. I would want to see increases in net profit
and
return on investment
and
cash flow—all three of them. And I would want to see all three of them increase all the time.
Man, think of it. We’d
really
be making money if we could have all of the measurements go up simultaneously and forever.
So this is the goal:
To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.
I write that down in front of me.
I feel like I’m on a roll now. The pieces seem to be fitting together. I have found one clear-cut goal. I’ve worked out three related measurements to evaluate progress toward the goal. And I have come to the conclusion that simultaneous increases in all three measurements are what we ought to be trying to achieve. Not bad for a day’s work. I think Jonah would be proud of me.
Now then, I ask myself, how do I build a direct connection between the three measurements and what goes on in my plant? If I can find some logical relationship between our daily operations and the overall performance of the company then I’ll have a basis for knowing if something is productive or non-productive . . . moving toward the goal or away from it.
I go to the window and stare into the blackness.
Half an hour later, it is as dark in my mind as it is outside the window.
Running through my head are ideas about profit margins and capital investments and direct labor content, and it’s all very conventional. It’s the same basic line of thinking everyone has been following for a hundred years. If I follow it, I’ll come to the same conclusions as everyone else and that means I’ll have no truer understanding of what’s going on than I do now.
I’m stuck.
I turn away from the window. Behind my desk is a bookcase; I pull out a textbook, flip through it, put it back, pull out another, flip through it, put it back.
Finally, I’ve had it. It’s late.
I check my watch—and I’m shocked. It’s past ten o’clock. All of a sudden, I realize I never called Julie to let her know I wasn’t going to be home for dinner. She’s really going to be pissed off at me; she always is when I don’t call.
I pick up the phone and dial. Julie answers.
"Hi,’’ I say. "Guess who had a rotten day.’’
"Oh? So what else is new?’’ she says. "It so happens my day wasn’t too hot either.’’
"Okay, then we both had rotten days,’’ I tell her. "Sorry I didn’t call before. I got wrapped up in something.’’
Long pause.
"Well, I couldn’t get a babysitter anyway,’’ she says.
Then it dawns on me; our postponed night out was supposed to be tonight.
"I’m sorry, Julie. I really am. It just completely slipped my mind,’’ I tell her.
"I made dinner,’’ she says. "When you hadn’t shown up after two hours, we ate without you. Yours is in the microwave if you want it.’’
"Thanks.’’
"Remember your daughter? The little girl who’s in love with you?’’ Julie asks.
"You don’t have to be sarcastic.’’
"She waited by the front window for you all evening until I made her go to bed.’’
I shut my eyes.
"Why?’’ I ask.
"She’s got a surprise to show you,’’ says Julie.
I say, "Listen, I’ll be home in about an hour.’’
"No rush,’’ says Julie.
She hangs up before I can say good-bye.
Indeed, there is no point in rushing home at this stage of the game. I get my hard hat and glasses and take a walk out into the plant to pay a visit to Eddie, my second shift supervisor, and see how everything is going.
When I get there, Eddie is not in his office; he’s out dealing with something on the floor. I have him paged. Finally, I see him coming from way down at the other end of the plant. I watch him as he walks down. It’s a five-minute wait.
Something about Eddie has always irritated me. He’s a competent supervisor. Not outstanding, but he’s okay. His work is not what bothers me. It’s something else.
I watch Eddie’s steady gait. Each step is very regular.
Then it hits me. That’s what irritates me about Eddie: it’s the way he walks. Well, it’s more than that; Eddie’s walk is symbolic of the kind of person he is. He walks a little bit pigeon-toed. It’s as if he’s literally walking a straight and narrow line. His hands cross stiffly in front of him, seeming to point at each foot. And he does all this like he read in a manual someplace that this is how walking is supposed to be done.
As he approaches, I’m thinking that Eddie has probably never done anything improper in his entire life—unless it was expected of him. Call him Mr. Regularity.
We talk about some of the orders going through. As usual, everything is out of control. Eddie, of course, doesn’t realize this. To him, everything is normal. And if it’s normal, it must be right.
He’s telling me—in elaborate detail—about what is running tonight. Just for the hell of it, I feel like asking Eddie to define what he’s doing tonight in terms of something like net profit.
I want to ask him, "Say, Eddie, how’s our impact on ROI been in the last hour? By the way, what’s your shift done to improve cash flow? Are we making money?’’
It’s not that Eddie hasn’t heard of those terms. It’s just that those concerns are not part of his world. His world is one measured in terms of parts per hour, man-hours worked, numbers of orders filled. He knows labor standards, he knows scrap factors, he knows run times, he knows shipping dates. Net profit, ROI, cash flow—that’s just headquarters talk to Eddie. It’s absurd to think I could measure Eddie’s world by those three. For Eddie, there is only a vague association between what happens on his shift and how much money the company makes. Even if I could open Eddie’s mind to the greater universe, it would still be very difficult to draw a clear connection between the values here on the plant floor and the values on the many floors of UniCo headquarters. They’re too different.
In the middle of a sentence, Eddie notices I’m looking at him funny.
"Something wrong?’’ asks Eddie.
When I get home, the house is dark except for one light. I try to keep it quiet as I come in. True to her word, Julie has left me some dinner in the microwave. As I open the door to see what delectable treat awaits me (it seems to be some variety of mystery meat) I hear a rustling behind me. I turn around, and there stands my little girl, Sharon, at the edge of the kitchen.
"Well! If it isn’t Miz Muffet!’’ I exclaim. "How is the tuffet these days?’’
She smiles. "Oh... not bad.’’
"How come you’re up so late?’’ I ask.
She comes forward holding a manila envelope. I sit down at the kitchen table and put her on my knee. She hands the envelope to me to open.
"It’s my report card,’’ she says.
"No kidding?’’
"You have to look at it,’’ she tells me.
And I do.
"You got all A’s!’’ I say.
I give her a squeeze and big kiss.
"That’s terrific!’’ I tell her. "That’s very good, Sharon. I’m really proud of you. And I’ll bet you were the only kid in your class to do this well.’’
She nods. Then she has to tell me everything. I let her go on, and half an hour later, she’s barely able to keep her eyes open. I carry her up to her bed.
But tired as I am, I can’t sleep. It’s past midnight now. I sit in the kitchen, brooding and picking at dinner. My kid is getting A’s in the second grade while I’m flunking out in business.
Maybe I should just give up, use what time I’ve got to try to land another job. According to what Selwin said, that’s what everyone at headquarters is doing. Why should I be different?
For a while, I try to convince myself that a call to a headhunter is the smart thing to do. But, in the end, I can’t. A job with another company would get Julie and me out of town, and maybe fortune would bring me an even better position than I’ve got now (although I doubt it; my track record as a plant manager hasn’t exactly been stellar.) What turns me against the idea of looking for another job is I’d feel I were running away. And I just can’t do that.
It’s not that I feel I owe my life to the plant or the town or the company, but I do feel some responsibility. And aside from that, I’ve invested a big chunk of my life in UniCo. I want that investment to pay off. Three months is better than nothing for a last chance.
My decision is, I’m going to do everything I can for the three months.
But that decided, the big question arises: what the hell can I really do? I’ve already done the best I can with what I know. More of the same is not going to do any good.
Unfortunately, I don’t have a year to go back to school and re-study a lot of theory. I don’t even have the time to read the magazines, papers, and reports piling up in my office. I don’t have the time or the budget to screw around with consultants, making studies and all that crap. And anyway, even if I did have the time and money, I’m not sure any of those would give me a much better insight than what I’ve got now.
I have the feeling there are some things I’m not taking into account. If I’m ever going to get us out of this hole, I can’t take anything for granted; I’m going to have to watch closely and think carefully about what is basically going on . . . take it one step at a time.
I slowly realize that the only tools I have—limited as they may be—are my own eyes and ears, my own hands, my own voice, my own mind. That’s about it. I am all I have. And the thought keeps coming to me: I don’t know if that’s enough.
When I finally crawl into bed, Julie is a lump under the sheets. She is exactly the way I left her twenty-one hours ago. She’s sleeping. Lying beside her on the mattress, still unable to sleep, I stare at the dark ceiling.
That’s when I decide to try to find Jonah again.
Two steps after rolling out of bed in the morning, I don’t like moving at all. But in the midst of a morning shower, memory of my predicament returns. When you’ve only got three months to work with, you don’t have much time to waste feeling tired. I rush past Julie—who doesn’t have much to say to me—and the kids, who already seem to sense that something is wrong, and head for the plant.
The whole way there I’m thinking about how to get in touch with Jonah. That’s the problem. Before I can ask for his help, I’ve got to find him.
The first thing I do when I get to the office is have Fran barricade the door against the hordes massing outside for frontal attack. Just as I reach my desk, Fran buzzes me; Bill Peach is on the line.
"Great,’’ I mutter.
I pick up the phone.
"Yes, Bill.’’
"Don’t you
ever
walk out of one of my meetings again,’’ rumbles Peach. "Do you understand me?’’
"Yes, Bill.’’
"Now, because of your untimely absence yesterday, we’ve got some things to go over,’’ he says.
A few minutes later, I’ve pulled Lou into the office to help me with the answers. Then Peach has dragged in Ethan Frost and we’re having a four-way conversation.
And that’s the last chance I have to think about Jonah for the rest of the day. After I’m done with Peach, half a dozen people come into my office for a meeting that has been postponed since last week.
The next thing I know, I look out the window and it’s dark outside. The sun has set and I’m still in the middle of my sixth meeting of the day. After everyone has gone, I take care of some paperwork. It’s past seven when I hop in the car to go home.
While waiting in traffic for a long light to turn green, I finally have the opportunity to remember how the day began. That’s when I get back to thinking about Jonah. Two blocks later, I remember my old address book.
I pull over at a gas station and use the pay phone to call Julie.
"Hello,’’ she answers.
"Hi, it’s me,’’ I say. "Listen, I’ve got to go over to my mother’s for something. I’m not sure how long I’ll be, so why don’t you go ahead and eat without me.’’
"The next time you want dinner—’’
"Look, don’t give me any grief, Julie; this is important.’’
There is a second of silence before I hear the click.
It’s always a little strange going back to the old neighborhood, because everywhere I look is some kind of memory waiting just out of sight in my mind’s eye. I pass the corner where I had the fight with Bruno Krebsky. I drive down the street where we played ball summer after summer. I see the alley where I made out for the first time with Angelina. I go past the utility pole upon which I grazed the fender of my old man’s Chevy (and subsequently had to work two months in the store for free to pay for the repair). All that stuff. The closer I get to the house, the more memories come crowding in, and the more I get this feeling that’s kind of warm and uncomfortably tense.
Julie hates to come here. When we first moved to town, we used to come down every Sunday to see my mother and Danny and his wife, Nicole. But there got to be too many fights about it, so we don’t make the trip much anymore.
I park the
Mazda
by the curb in front of the steps to my mother’s house. It’s a narrow, brick row house, about the same as any other on the street. Down at the corner is my old man’s store, the one my brother owns today. The lights are off down there; Danny closes at six. Getting out of my car, I feel conspicuous in my suit and tie.
My mother opens the door.
"Oh my god,’’ she says. She clutches her hands over her heart. "Who’s dead?’’
"Nobody died, Mom,’’ I say.
"It’s Julie, isn’t it,’’ she says. "Did she leave you?’’
"Not yet,’’ I say.
"Oh,’’ she says. "Well, let me see...it isn’t Mothers’ Day...’’
"Mom, I’m just here to look for something.’’
"Look for something? Look for what?’’ she asks, turning to let me in. "Come in, come in. You’re letting all the cold inside. Boy, you gave me a scare. Here you are in town and you never come to see me anymore. What’s the matter? You too important now for your old mother?’’
"No, of course not, Mom. I’ve been very busy at the plant,’’ I say.
"Busy, busy,’’ she says leading the way to the kitchen. "You hungry?’’
"No, listen, I don’t want to put you to any trouble,’’ I say.
She says, "Oh, it’s no trouble. I got some ziti I can heat up. You want a salad too?’’
"No, listen, a cup of coffee will be fine. I just need to find my old address book,’’ I tell her. "It’s the one I had when I was in college. Do you know where it might be?’’
We step into the kitchen.
"Your old address book...’’ she muses as she pours a cup of coffee from the percolator. "How about some cake? Danny brought some day-old over last night from the store.’’
"No thanks, Mom. I’m fine,’’ I say. "It’s probably in with all my old notebooks and stuff from school.’’
She hands me the cup of coffee. "Notebooks . . .’’
"Yeah, you know where they might be?’’
Her eyes blink. She’s thinking.
"Well... no. But I put all that stuff up in the attic,’’ she says.
"Okay, I’ll go look there,’’ I say.
Coffee in hand, I head for the stairs leading to the second floor and up into the attic.
"Or it might all be in the basement,’’ she says.