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.
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.