The Goal: A Process of Ongoing Improvement

The Goal: A Process of Ongoing Improvement

by

Eliyahu M. Goldratt and Jeff Cox

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The Goal: A Process of Ongoing Improvement: Chapter 40 Summary & Analysis

Summary
Analysis
Lou and Alex drive home from headquarters together, as they have every day for the last two weeks. Each day, they’ve been meeting with Peach to get a true idea of how poorly the division is performing and, other than Bob Donovan’s plant, how at-risk every plant is. Alex and Lou bicker.
Alex and Lou’s realization of how dismally the division performs implies that they have plenty of work ahead of them to turn the division around, as they did for their plant.
Themes
The Importance of Goal-Setting Theme Icon
Alex fears that all they are doing is collecting data, but Lou insists data collection is not inherently bad. The problem is that their measurements are still bad—plants have been making products but never selling them yet still counting them as income rather than inventory. No one is considering their actual throughput, and people are reticent to accept new metrics, since that would expose their poor performance and reveal that they are not making money but losing it. Lou wants to see if their five-step process can help with these problems too, but Alex tells him he has plans for the evening.
Lou’s inference that people don’t want to use new metrics if they will reveal their own failures suggests that managers’ egos may keep them committed to traditional, though failing, metric systems. Though Lou wants to keep working, Alex’s statement that he has plans for the evening implies that he will spend the evening with Julie and is thus prioritizing their relationship, even in the midst of his work.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
Later, Lou and Alex meet to analyze their issues: Lou believes that bad metrics are the division’s chief constraints, but Alex is unconvinced. He thinks some more basic principle is at work. They continue to bicker and grouse about corporate issues like selfishness and greed. Lou remarks that the plant’s process had physical bottlenecks, but the organization’s bottlenecks might not be so concrete. Their five-step process still appears legitimate, so long as they can determine their new constraints or “core problem.”
Again, Lou’s claim that the division has its own bottlenecks to address and utilize suggests that Goldratt’s Theory of Constraints works not only for manufacturing, but for managing any complex, multi-stage system. However, Alex’s recognition of interpersonal problems like selfishness and greed suggests that managing at the division level involves solving human behavior problems along with logistical problems.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
As they continue debating about constraints and core problems, Alex realizes that they are fundamentally asking “what to change,” “what to change to,” and “how to change.” He realizes that these are the same questions Jonah uses, but now they will have to learn to be “[their] own Jonahs” and figure it out for themselves. Lou puts an arm around Alex and tells Alex that he is proud to work for him.
Alex’s belief that he and Lou must be their “own Jonahs” suggests that despite their promotions and the things they’ve learned, they will continue to learn and grow as managers.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
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