Dr. Eliyahu M. Goldratt, 1947 – 2011

by Sean on June 14, 2011

On June 11, the world lost a giant in the world of business transformation. Dr. Goldratt entered the world of business with a background in theoretical physics. Over the years he challenged conventional wisdom and introduced many concepts that are being used successfully every day. His body of work was codified in what is now called the Theory of Constraints (TOC). Anybody who has looked at our web site or worked with us knows the tremendous influence he has on us.
Dr. Goldratt was a master of not only content, but with message delivery. Instead of dense textbooks, he revealed his concepts in business novels. His most famous ones:

  • The Goal – The story of Alex Rogo’s struggles and ultimate triumph in saving his manufacturing plant. Here he explains the 5 focusing steps, drum-buffer-rope and the fact that sales drives profitability and cash flow, not operational efficiency.
  • It’s Not Luck – Rogo, now a division vice president, must choose what businesses to sell, what ones to keep and how to sell them. Here current reality trees and mafia offers help Rogo vastly improve the company.
  • Critical Chain – Goldratt explains how project management using critical path is designed to fail. Critical chain deals with the student’s syndrome as well as the manager’s tendency to negotiate as much time as possible for projects.
  • The Race – A workbook where students can work on practical problems with drum-buffer-rope.
  • The Choice – Goldratt describes how TOC has formed his philosophy and how it is his contribution to society.

Dr. Eliyahu Goldratt, 1947 - 2011

Many kind words have been written about Dr. Goldratt in the past few days. My perspective is he gave me structure to the intuition I felt about business. TOC is a model just like thermodynamics or quantum mechanics. One can use these principles and apply them to countless situations. Goldratt has done for business what Newton did for engineering: delivered a sound set of principles for the design and operation of virtually everything. Like Newtonian Physics, TOC isn’t exactly correct, but is vastly superior to anything else available. Eventually, Einstein’s theory of relativity was needed for design of things like satellites and GPS’s, but even after 300+ years, Newton’s equations are still extremely effective. Time will tell how long TOC will last, but I don’t see it going away any time soon.
One characteristic of a great model is it makes seemingly complex situations very simple. This elegance has beauty and Seth Godin’s Linchpin describes it as art. Instead of trying to convey this by paraphrasing, I’ll just quote Dr. Goldratt from The Choice:

“I smile and start to count on my fingers: One, people are good. Two, every conflict can be removed. Three, every situation, no matter how complex it initially looks, is exceedingly simple. Four, every situation can be substantially improved; even the sky is not the limit. Five, every person can reach a full life. Six, there is always a win-win solution. Shall I continue to count?”

If you would like to send condolences, thoughts or stories to the Goldratt family and the rest the TOC community you can do so at www.eligoldratt.com/messages.

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The Benevolent Dictator: A Review

by Scott on June 6, 2011

The Benevolent DictatorThe Benevolent Dictator is the new book by Michael Feuer, who was the founder and CEO of OfficeMax until it was sold to Boise Cascade in 2003. Feuer now runs Max-Wellness, a company that sells medical and personal care supplies. The company has 4 stores but Feuer has plans to grow it into a national retailer.

This book is not a biography. It does not tell the tale of the founding and building of OfficeMax in its entirety. Instead, Feuer uses examples from his personal experience to illustrate 40 lessons for entrepreneurs. He sorts these 40 lessons into 4 phases:

  1. Start-Up
  2. Build Out And Put The Idea To The Test
  3. Constant Reinvention
  4. The Payday

Although the latter two phases cover areas of importance to large corporations, this book is really written for entrepreneurs. Feuer is one of the rare people who has the ability to found, build and manage a company as a large enterprise. From reading the book, it is evident that he maintained an entrepreneurial mindset throughout his journey.

One of the more interesting insights into Feuer’s process of building businesses was that a significant amount of research and planning was undertaken before making major decisions. He cautions not to become paralyzed by endless analysis but he credits a lot of his success to having a methodical approach to building businesses. This flies in the face of those who believe that an entrepreneur is a modern day gunslinger who makes decisions with his gut without regard for the risks involved. Feuer takes risks but they are calculated risks.

Another insight was how much time Feuer spends on the floor of his own stores and those of his competitors. He makes a big effort to make sure that he is getting information directly from customer facing employees. I am always amazed at how the bosses in the TV show Undercover Boss don’t seem to know what their own organizations do. I doubt Feuer has this issue.

There is a lot of good advice in this book. Some of the writing was a little rough in spots but I think reading the book is worthwhile. You may not have an interest in starting or building a national retailer but I think there is a lot that can be learned from entrepreneurs outside of your own industry.

In the interest of full disclosure, we received an advance copy of the book, free of charge. We were asked to give it an honest review, which we have.

 

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Small Message, Big Impact: A Review

May 23, 2011

Terry L. Sjodin has written Small Message, Big Impact: How To Put The Power Of The Elevator Speech Effect To Work For You. Sjodin is founder of Sjodin Communications, a firm that specializes in communications training for business. When I first starting reading this book, I had my doubts. I’ve never been a big fan […]

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Technology Use – A Golf Case Study

May 10, 2011

As everybody knows, we live in a technological society. Technology has come into every part of our lives. Sometimes it’s a great thing. Other times we implement technology that doesn’t help anything at all. This blog is about how I’m using technology to improve my golf game. I’m pretty much self-taught in golf, but I […]

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John Warrillow – The Glenn Beck of Canadian Business?

April 27, 2011

Like our readers, we keep our eyes open for business insight on the web. We came across John Warrillow, a writer for the Globe and Mail. He comes with the credentials of a newspaper writer – published author, successful businessman. It’s quite shocking to read his blog. Each post contains a statement that is either […]

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Don’t Compromise

March 23, 2011

Why do people think that compromise is the best solution? More often than not, it is the worst solution. Here’s why. I was sitting in on a mediation hearing last week about how to settle an outstanding invoice with a building owner whose lessee went bankrupt. The details of the case don’t matter to this […]

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Surviving Your Serengeti: A Review

March 3, 2011

The new book, Surviving Your Serengeti, teaches 7 essential skills for success in life and business through the metaphor of African animals on the Serengeti. Written by businessman and real estate expert Stefan Swanepoel, the book draws from the author’s experience growing up in Africa and applies the lessons he learned from the animals to […]

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Killing the Goose that Laid the Golden Egg – Another Curling Rant

February 23, 2011

As reported by Bob Weekes, the Canadian Curling Association is looking at changing the format of the Brier, as well as their other national championships. They are experimenting with moving to a 14-team system. Team Canada, Northern Ontario and separate Yukon and Northwest Territories entries plus one team from each Province. The field would still […]

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We Just Need 2% Of The Market

February 17, 2011

I don’t know how many times I’ve heard entrepreneurs say this or how many times I’ve read it in a business plan. It seems simple, right? How could the business not get such a small percentage of the market? And given that the market it huge, they’ll be doing 8 figures by their third year. […]

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Air Canada Part 2: Customer Service on $200 Per Year

February 8, 2011

On my earlier rant, I described how Air Canada made me choose between the right airport, wrong date and wrong airport, right date. I sent an email to their website to complain about how they handled the situation. Here is the email: From: Sean McAlpine Sent: 24/01/2011 11:52 AM Subject : Is San Diego the […]

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