Alex Rogo, the new executive vice president of UniCo, must turn around three newly acquired companies, knowing that if he succeeds, they will be sold off and the new owners will replace him, and if he fails, the companies will be closed–in either case, he will likely be fired.
Using the unique business-novel format, It’s Not Luck continues the story of The Goal. Alex Rogo navigates a new set of challenges with the now over-diversified and under-profitable UniCo, where he has risen to the rank of executive VP in charge of the diversified group.
With an engaging voice and dynamic plot, Goldratt shows how to apply his Theory of Constraints (TOC) to achieve ongoing improvement in sales and marketing, inventory control, and production distribution.
But, the most insightful passage is at Chapter 30:
Alex is talking with J. Bartholomew Granby, Jim Doughty and Brandon Trumann, three key Directors:
… “Let me review what we have agreed on. We agreed that we should, ‘Make money now as well as in the future,’ ‘Provide a secure and satisfying environment for employees now as well as in the future,’ and ‘Provide satisfaction to the market now as well as in the future.’ The first one represents the traditional view of people who own companies. The second is the traditional view of the unions, the employees’ representatives. And the third expresses the message that all new management methods are zealously advocating. We, as top managers, must make sure that our companies provide all of them.”
“Easy to say,” Granby sighs. “The problem is that so often there are conflicts between them.”
“No, there aren’t,” I say. “There are modes of operations that apparently conflict with one of them. These same modes in the long run conflict with all of them.”
“What you are telling us,” Jim is trying hard to digest, “is that we have to realize that there is no conflict between them. That they don’t contradict but in fact supplement each other.”
“Alex is probably right,” Brandon joins me.
“As people who believe in making money as the goal we are also awakened to the fact that the other two entities are absolutely necessary conditions for achieving our goal.”
“The same awakening is happening in the other camps,” I add. “Show me a union leader who believes that there is job security in a company that constantly loses money. Show me a quality zealot who thinks that a company can provide good service to the market while constantly losing money.”
“So you claim that these three entities are actually important to the same degree?” Jim is on to it. “If that’s the case, how come everyone is talking about making money as the goal?”
“Maybe in Wall Street circles, everyone is,” I can’t resist the opportunity. “But you have a point. Making money is much more tangible than the other two. It’s the only one that can be measured.”
“I knew that we were right,” Brandon smiles.
“Don’t fall into the trap that the first entity is more important,” I warn him. “Making money can be measured just because of a coincidence. You see, somewhere in prehistory a genius invented a way to compare wheat to goats.
“He or she invented the abstract unit of money, a currency. No one yet has invented a unit of measure for security or satisfaction.”
“I’m three-point-seven X secure, and Jim is fourteen and a half Y frustrated.” Brandon demonstrates my point.
“I think that we’d better order dinner,” Jim says. “This conversation is deteriorating.
While we wait for our appetizers, Jim presses on. “Alex, this is all very interesting, but you still haven’t told us a thing either about strategy or how you suggest investing the money.”
“I don’t agree,” I say. “I think that we have actually defined what makes a good or bad strategy.”
“Maybe we did, but if so, it escaped me.”
“Do you agree that strategy is the direction we take to reach our goal?”
“Naturally,” he agrees.
“Do you also agree that if we violate any of the three entities that we outlined before, we are bound not to reach our goal? Remember, whichever of the three you choose as a goal, we agreed that the other two are necessary conditions to achieving it.”
“So a good strategy must not clash with any of them,” Brandon concludes.Dr Eliyahu Goldratt – It’s Not Luck
This is the foundation of a High Performance through Engagement Strategy – HPtE Strategy®.