Mba Miniboekje Eli Goldratt Hr

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Interview
Eli
Goldratt

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MBA in één dag | Eli Goldratt

MBA Miniboekje Eli Goldratt.indd 1 04-05-10 09:28

CV Eli Goldratt
• Eliyahu M. Goldratt werd geboren in 1948 in Israël.
• Hij studeerde natuurkunde en filosofie aan de universiteiten van
Tel Aviv en Bar-Ilan.
• Daarna werkte hij een paar jaar in de VS, waar hij ondermeer een
bedrijf leidde dat software ontwikkelde voor productieplanning.
• Sinds Eli Goldratt in 1984 het boek Het Doel schreef,
is hij internationaal vermaard als bedrijfsadviseur en
managementgoeroe. In Het Doel introduceerde hij zijn Theory
of Constraints die hij in de jaren daarna in verschillende
boeken uitwerkte naar allerlei vakgebieden, onder andere ICT,
Eli Goldratt
MBA in
projectmanagement en marketing.
• Goldratt verkocht inmiddels meer dan vijf miljoen boeken in meer
dan 20 talen.
•

•
Een van Goldratts hobby’s is het provoceren van managers. Hij
schept er een groot genoegen in om de bestaande ideeën over
bedrijfskunde en management op de hak te nemen.
Inmiddels is Goldratt al enkele jaren met pensioen. Hij verlaat zijn
één dag®
woonplaats, een dorpje onder de rook van Tel Aviv, nu alleen nog
voor de dingen die hij écht leuk vindt. In Goldratts geval betekent
dat het verzorgen van ruim twintig seminars per jaar.

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MBA in één dag | El i Goldratt MBA in één dag | Eli Goldratt

MBA Miniboekje Eli Goldratt.indd 2-3 04-05-10 09:28

Dr. Eli Goldratt –

Interview
Unplugged
This is part one of SCDigest editor Dan Gilmore’s interview with Gilmore: What are the key concepts Gilmore: Yes, or they lack enough
behind the Theory of Constraints? information to know.

Dr. Eli Goldratt, father of the Theory of Constraints, and author of “The
Goldratt: There are two pillars to the Theory of Goldratt: No – they believe the change is
Constraints. One is the starting assumption likely to hurt them.
Goal” and several other influential books on business and supply chain
of all the hard sciences, which is that in all
real-life systems there is inherent simplicity. Sometimes they are wrong because of a lack
topics. “The Goal,” first published in 1984, is a novel that tells the tale of If you can just find that inherent simplicity, of information, but usually they are right!
you can manage, control and improve the Most changes might be right for the company,
plant manager Alex Rogo, who factory is a disaster and on the verge of system. but are not right for the majority of people
from whom they are asking for collaboration.
being shut. With the help of a Goldratt-like consultant named Jonah, he The other pillar is “that people are not stupid.” So no wonder there is a lot of resistance.

turns things around by focusing on eliminating a series of bottlenecks Gilmore: (after a pause): I was waiting for Gilmore: There is a certain logic there, no
some further explanation of that second question.
(constraints) that are barriers to efficiency and service. point (laughter).
Goldratt: Because of that, it means the
Goldratt: Have you ever heard the concept emphasis of change must be on win-win-
“people resist change?” And that the bigger win for all of the parties which you need
the change, the more the resistance? Doesn’t to collaborate.
this in essence say that people are stupid?
Gilmore: Well, that sounds great in
Let’s do a “for instance.” If someone comes theory, but for example if you have to do a
up and suggests a change that is good for restructuring…
you, do you automatically resist it?
Goldratt: What you are saying is that you don’t
So, if I say you will resist the change just think it’s feasible, and what I have tried to
because it is change, I am actually saying demonstrate in my books and hundreds of
you are not very bright. People certainly projects is that it is always possible – always.
do, however, resist change that they have a
reason to believe will hurt them. Let’s take your restructuring example, where
a lot of people will get hurt. This means the
4 5



books and our own consulting is huge. One Since they control the entire system, they are

Interview
solution is wrong! There must be a better
way that will get you what you want, but will time a top executive from a U.S. company the constraints of the system, and therefore
be a win-win. wrote to me and said, “Dr. Goldratt, your also the levers. If you can figure out what
book is no longer a novel any more, it is a they key constraints of the system are, and
Gilmore: That would be great, if it is true. documentary! Because I’ve done what you what are the cause and effect relationships
Goldratt: Have you read any of my books? propose in the books, and I’ve achieved all between these constraints and the rest of
the results. The only difference between the system, now you have the key!
Gilmore: Just “The Goal” what’s in “The Goal” and our story is that
my wife didn’t come back yet!” [The main However, what you have to be able to do in
Goldratt: Did what was said in that book character in the novel, Alex Rogo, also has order to successfully change the system is
seem true, even simple? Common sense? some marital issues.] to look to the other pillar and recognize that
only a win-win solution can be implemented.
Gilmore: Yes… Everyone who attempts it achieves the results. And in terms of all the options that exist,
Every one. It’s amazing. there is always at least one win-win solution.
Goldratt: Do you want a bigger proof that it is The key is described in my second book,
possible? Let’s say there is a manufacturing Gilmore: “The Goal” is really plant/ which in most places is called “The Goal II.”
plant, where everything is against it. It’s on manufacturing focused, and many people Now, Alex isn’t a plant manager but a vice
the verge of collapse, it looks impossible to associate the Theory of Constraints as president, involved not just in production
do anything in the time of three months, dealing largely with production issues. but supply chain, marketing, sales, etc. Still,
which is all the time there is to fix it. How do we tie this all together, both the the same concepts are demonstrated. How
factory and the larger company issues and do you find the controlling factors, and
Nevertheless, it is so possible, providing opportunities? create winwin? How do you unearth the false
you find the simplicity, and be careful to assumptions that lead you to believe that
look for win-win solutions. Goldratt: Bottlenecks are just a prime example the only way out is a compromise, which
of inherent simplicity. If you are looking at a means someone will lose?
The problem is that the win-win solution is system, what makes it complex is that if you
usually blocked by erroneous assumptions, are touching one place, it has a ramification Then, usually there is so much resistance
and that’s why it’s hard to find it. But when in other places. that even if you can implement what you
you find it, it’s obvious, because your own intended, it will be so diluted that most of
reaction and that of everyone else is “Isn’t In other words, it is the cause and effect the results will be lost.
that obvious. Why didn’t we see it before?” relationships that make it seem so complicated.
This means that if you realize that the fewer Gilmore: The results of many company
Gilmore: I’d still like a more concrete the number of points you have to touch to initiatives and strategies illustrate that
example… impact the whole system, it actually has point.
fewer degrees of freedom.
Goldratt: “The Goal” is an example, my Goldratt: Illustrate it beautifully.
other books are examples, because each The more complex the system is, the less the
one of them are based on things that really degrees of freedom, which means that if you
happened. can find the few elements that if you touch
them then they impact the whole system,
The real-life validation we have had from the you’ve found the key elements of the system.

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Interview
Gilmore: It seems to me that originally or three. We haven’t done a thing. of effort to reduce the development time. this. As a result, you see top companies
the Theory of Constraints had a theme But it hasn’t worked very well. So they think with great technology losing their pants!
that for any system at a given point in But there is another definition of complexity, there is only one way out - if we can’t shrink All because the supply chain time exceeds
time, there was a single constraint. Is that which is the degrees of freedom of the the development time, than you have to the market cycle time.
notion evolving? system. If the system has even five degrees have more than one wave of development
of freedom, that is very complex to manage. on-going. But that’s very difficult to do. First, So everyone is also trying to shrink the time
Goldratt: It depends on how you define a If we have only one degree of freedom, that it’s very expensive. Then companies have to of the supply chain. But the joke is they are
system. For me, in most companies a system is so easy. learn how to build cement walls between the always trying to do it in production, when
is a one-directional flow, and therefore in most teams, because if they talk with each other, they don’t realize that 80% of supply chain
companies you have only one constraint. In The problem is that people look at simplifying nothing will ever be finished. But there are time for many is in the wholesalers and the
conglomerates, there can be more than one the system not by reducing its degrees of a few companies that have managed it. retailers. And they aren’t doing a thing about
constraint but this is because there is more freedom, but by the first definition, which that. In PCs of course, Dell is an exception.
than one system. is a total waste of time. Many haven’t. The best example is probably
Digital Computer. It was ultimately killed by So, we aren’t looking at what the constraint
But the fact that in a system there is one this problem. But still today, most companies of the system really is, which in this case may
constraint that makes it simple. Gilmore: Let’s get back to a supply chain in this situation have more than one team be how inventory flows thru the channel. We
example. developing the same types of products, have to look at how we exploit and subordinate
Gilmore: I talk with lots of supply chain because that is the only way to effectively shrink that. Instead, we get all this mumbo jumbo
executives, and right now for many Goldratt: In the past decade, all we hear the lead time of new product introduction. about “simplicity” here, “simplicity” there.
of them there is a strong focus on about is supply chain, supply chain, supply
simplifying their supply chains… chain. Before that, there wasn’t a peep Gilmore: There are supply chain factors Gilmore: OK, we started out with one
about it. So let’s analyze this for a second. as well. of the two pillars being “people are not
Goldratt: Good grief! OK, there are two Consider that product lifecycles are shrinking stupid.” But this makes it sounds like
different definitions of complexity. The rapidly in almost every area, but especially Goldratt: Yes, in the electronics and other maybe we don’t have especially bright
mere fact that both exist serve to confuse electronics. As product lifecycles shrink, we markets, as the product lifecycles keep people out there, when we know there
everything. hit the first huge barrier, because the lifecycle shrinking, they are often now also equal are.
of products in the market is shorter than the or shorter than the supply chain lead time.
One definition is that the more data elements time to develop the product. Goldratt: We all act according to patterns
needed to define the system, the more complex If you make electronics and need a custom and inertia. And it’s very hard to get out
it is. So, if you can describe the system in five Gilmore: This is true often in the apparel chip built, it will take 6, 7 or 8 months from from under that, because it seems we have
pages, that’s a simple system. If you have industry as well, and I suspect an the time you order to the time the first unit to recalculate everything. When you show
to take a hundred pages, that’s complex. In increasing number of others. goes out the door with that chip in it. Longer them how it can be done, the reaction is
this regard every company and process is than the product lifecycle. Now I order this usually “That’s not realistic,” or “But we’re
amazingly complex. Even in a small company, Goldratt: Correct! Suppose I have an excellent component, and before I can even ship the different.”
how many pages would it take to describe company and a winning product. If your product, there is a newer, better version of
how to make every part, how to work with development time is longer than the lifetime the component. So what do I have to do? I But I’ll tell you, most companies if they follow
suppliers, manage channels, etc.? of the product, it means there will always be have to reduce the price or I can’t sell it at all. these principles in four years can have net
a window of time when the competition has profits equal to their current sales.
So, if it is enormously complex and we try a better product than you. So, you will lose. So now if I am in the channel I will eventually
to simplify it, there’s not much point. It demand higher margins, or maybe even Bron: SupplyChainDigest 2006
would be a million complexities minus two As a result companies spend an awful lot consignment inventory to protect against

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Dr. Eli Goldratt –
So, we have things that are good in the
If Jonah would have told

Interview
normal course of things, patterns and inertia,
in the case of paradigm shift, is killing us. Alex in “The Goal” what the
performance of the factory really

Unplugged part 2
Gilmore: It seems to me that the Theory
of Constraints has some strong parallels
should be a year or so down the
to concepts like Lean and Six Sigma. road, Alex would have fainted.
Right or wrong?

Goldratt: Let’s put it this way. In almost every step down the path, almost by the nose. I
implementation of the Theory of Constraints, am actually sick of that approach.
This is part 2 of SCDigest editor Dan Gilmore’s interview with Dr. Eli
we also force in the concepts of Lean and
Six Sigma. The techniques themselves are That book focused at the plant level. My
Goldratt, father of the Theory of Constraints, and author of “The Goal” beautiful. What is lacking is the mechanism assumption was that if I showed top
to use them. In other words, Lean and Six management the whole thing up front,
and several other influential books on business and supply chain topics. Sigma will never force you to examine the they’d say “It’s unrealistic,” We’re different,”
policies of top management. all the usual things, and they will not move.
“The Goal,” first published in 1984, is a novel that tells the tale of plant
And that’s why they have a limited effect. Even at a more local level, it can be hard. If
manager Alex Rogo, whose factory is a disaster and on the verge of Once you have used Theory of Constraints at Jonah would have told Alex in “The Goal”
a higher level to really understand what you what the performance of the factory really
being shut. With the help of a Goldratt-like consultant named Jonah, he need to do, at a lower level these techniques should be a year or so down the road, Alex
are fantastic. But you need to know where would have fainted.
turns things around by focusing on eliminating a series of bottlenecks to use them and where not.
And this is the problem. You go into a
(constraints) that are barriers to efficiency and service. For example, the U.S. Navy has an RFP company, you use Theory of Constraints to
last year for all its logistics operations, a make progress, move someone one step
huge undertaking. In the RFP, they said the then another, they get fat and happy again,
umbrella for the operator must be Theory and then they just want to stop. But you’ve
Gilmore: You’ve said “inertia” is a big How do you know what assumptions you of Constraints, and underneath that Lean. just started!
problem in many companies. What do have to re-examine when you are facing an That’s exactly what I am saying.
you mean? intolerable compromise? So – this is the marketing part – I’ve started
Gilmore: When you are working with with a new thing called “Viable Vision,” where
Goldratt: Inertia is related to the patterns of But most companies just accept the companies, what is typically the “Aha” I am showing company execs the whole thing
how a company does business or executes a compromise, rather than realizing they just moment, when the light bulb finally goes for the first four years. And again, I tell most
function like supply chain. But when there is got the gift that can point to us the wrong off ? of them that in four years they can have
a paradigm shift, or the need for significant assumptions and the wrong patterns. Instead net profit equal to their current total sales.
change, these patterns are what kill you. of working to find the correct pattern that will Goldratt: If you really want an answer to
remove the conflict, and by that generating that, I am going to have to market myself. Of course, the first reaction is “This is totally
So you have to go back and re-examine the a win-win solution, we still compromise. Let’s look at “The Goal.’ In that book, the unrealistic,” but then we say back, “Give us
basic assumptions. The tough question is: That’s a huge mistake. consultant, Jonah, leads Alex Rogo step by the data, and we’ll show you how to do it.”

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It doesn’t matter to me that in Goldratt: Let me give you the truth. In order the inventory, with almost no unavailability.

Interview
to minimize risk and best enable my people to Do you understand once you are doing that
general they order from you once execute this, I have eight generic solutions. If you are taking the market?
a week. What I want to know is it fits one of these eight, we take the project.
If it doesn’t, we don’t. A retailer or wholesaler’s key metric is inventory
for each specific product how turns, and its main concern unavailability.
frequently they order. And if the Those eight templates cover 80% of the If you solve both these problems, that’s it,
physical products companies, including the customer is yours.
answer is they order once in two
manufacturers, retailers, wholesalers, etc.
weeks or more than two weeks, Gilmore: Ok, I think the basic issue is well
that’s it - I have the solution. Gilmore: Can you describe a common understood. We’ve been trying to solve
template? that with many things, from collaborative
planning to RFID and lots of other
Goldratt: Well, to do this in half a page technologies and strategies.
or whatever this will be will probably be
We show them how to do it, and then we mumbojumbo, but fine. Goldratt: These are all hard. This solution
take on the implementation plan. is so damn simple.
Suppose that we are producing manufactured
Gilmore: Net profit in four years equal to products that are sold through distribution, Do you know that I have put in the public
current sales? wholesale and retail, ok? domain computer courses? Because I found
that in a manager wants to get buy-in from
Goldratt: That’s right. Not every company. Then the question the question I am really his people, a computer course is far more
Right now, I know how to do it with about interested in is “How frequently those channels effective than a book. Exactly what I have
80% of them. are ordering from you the same SKU?” It told you about how to do that solution is
doesn’t matter to me that in general they in one of the computer courses.
Gilmore: What’s the barrier at the other order from you once a week. What I want
20%? to know is for each specific product how Gilmore: Procter & Gamble is among the
So save two cents there so
frequently they order. And if the answer is companies trying to solve this, and is you can pay 20 cents over
Goldratt: I’m stupid – I don’t know enough they order once in two weeks or more than doing so in part by trying to make their
here. Very smart. Let small
yet. I am restricting myself now, for example, two weeks, that’s it - I have the solution. factories more flexible to shorten the
to physical products. Not hospitals, banks, length of production runs and enable warehouse concerns override
etc., even though we know in general Theory Because what happens is that if say they are more SKUs to be made each day…. smart business decisions.
of Constraints works beautifully there, but ordering the same product once a month,
we have less data and don’t want to take on that means the total order lead time – from Goldratt: First, so you know, the Procter
Think about what you’ve just
too big a risk because all of our contracts are when the sell a unit to when they order a unit & Gamble soap and detergents division said. Rather than pick a carton
based almost totally on realizing the results. – is one month. This is enough to kill them. implemented my distribution solution in 1989!
But it as just that division, as far as I know.
or two instead of a full pallet
Gilmore: When you look at the issues and It will typically create big problems with excess and have a few more pennies
plans across companies after you do this inventory, along with frequent problems with Gilmore: Procter & Gamble is of course of warehouse cost, I need to
analysis, what are common themes or unavailability. So now, the standard solution better than most, but they are committed
opportunities? shows them how to do this with less than half to this further improvement, though invest in flexible plants?

12 13



whether the manufacturing economics override smart business decisions. Think software. You’ll get killed trying to do it on

Interview
will allow them to make tubes of Crest or about what you’ve just said. Rather than pick spreadsheets. You also need software for
whatever in much shorter runs, as even a carton or two instead of a full pallet and big project management activities.
they have said, remains to be seen. have a few more pennies of warehouse cost,
I need to invest in flexible plants? Gilmore: Let’s talk about manufacturing
Goldratt: But at the same time I think you’d in Europe and North America. There
find the P&G or at least most consumer Gilmore: Well, part of the issue of course is a lot of general concern and political
goods manufacturers give big discounts is that most companies in the end are heat around “saving” manufacturing in
to retailers and wholesalers for ordering still siloed, and the distribution director the west, amidst low costs and pressure
in large quantities. That’s part of what kills is in fact primarily concerned with DC from China and other low cost countries.
them all. If they would refrain from that, operational efficiency, and transportation Can adoption of Theory of Constraints
then they probably wouldn’t need to make managers their metrics, etc. principles help revitalize those
their plants more flexible. manufacturing companies?
Goldratt: No you understand why in the
Let’s consider an example. You are a shop. Theory of Constraints that the number one Goldratt: I think that question doesn’t consider
And let’s say I say to you, you have to buy thing we attack all the time is called “Local what is really going on. What is this “save
minimum of 100. And you are selling two Optima.” Someone tries to optimize a piece western manufacturing?” Let me talk about
per day, on average. So immediately I have of the system, and you kill the system. That’s China and India – these are the two you are
elongated your cycle by 50 days. Because why again we now focus up front on viewing afraid or, right?
now you will wait to order until you have run the whole picture. Goldratt Interview Part
down the first 100 and then order another 2 Ó 2006. All Rights Reserved. 5 I work a lot in China. You know the biggest
100. I have put into the replenishment problem in China is right now? Getting
time 50 days. Gilmore: People and companies have people – for the 2nd shift. Can you imagine
taken the Theory of Constraints and not enough people in China? Salaries are
Gilmore: The response, I would think, taken it in all kinds of different directions. now skyrocketing. Statistics say that in 2004
is that there are trade-offs between Are they doing this well, or is it being salaries rose by 24%. When they are finalized
inventory and transportation, and my misapplied? in 2005, it will be much higher.
costs of shipping the two I sold that day
are way too high. Goldratt: I would say most of them are valid. Have you been in Shanghai, for example? You
may have had images like I had of rickshaws
Goldratt: Since when are we allowed to put Gilmore: Some software vendors have and bicycles – No! This is a western town.
only one type of product in a truck? So, where adopted at least in part a Theory of With the best cars everywhere, and fewer
is this argument coming from? Constraints orientation, especially in bicycles than in Holland. I sent an assistant
“optimization” products. What is the role to go and look in some shops for bargains.
Gilmore: Let’s take it back further then. It of software in TOC? She said, “Sorry Eli, the prices are the same
costs a lot more per unit to pick and ship as in Amsterdam.”
say two items than a pallet of them. Goldratt: It depends. There are in fact cases
where I don’t know how to solve a company’s So, China is not only becoming a big producer,
Goldratt: Your right – so save two cents issues without the software. For example, but a huge consumer. If what we see now
there so you can pay 20 cents over here. if you are dealing with large distribution continues another 5-6 years, China will be by
Very smart. Let small warehouse concerns networks of course you have to have the then the largest consumer market in the world.

14 15



Interview
Does the VP of Supply Chain have Goldratt: They are open right now. Fine, it and say “Let’s do this right.” have to lay a bunch of you off? That’s the
still takes 3-4 months of bureaucracy – what’s problem, and why you eventually need a
influence on marketing strategies
the big deal? As if there is no bureaucracy Think about it. Does the VP of Supply Chain more comprehensive view.
and policies? If that answer is No, to overcome in Europe or the U.S. have influence on marketing strategies and
then immediately you are working policies? If that answer is No, then immediately Gilmore: You are talking about radical,
China and India shouldn’t be looked on as a you are working with one of your hands tied almost unbelievable performance
with one of your hands tied behind threat but as a fantastic opportunity. behind your back. improvements. Most companies are
your back. happy with and struggle just to achieve
Gilmore: Our audience is a supply chain For example, in the consumer goods example continuous, incremental improvement.
audience. How do they best understand we had, if I was the VO of Supply Chain and
and get started with these concepts? I was making these improvements, but the Goldratt: Incremental improvement is
What’s happening in India is even more And from what you’ve said earlier, is this policy was to still give big reductions for nothing. This is exactly what I am crying
fascinating. I can say without blinking an eye something that really only makes sense to ordering in large quantities, rather than about. Incremental improvement generally
that in India they have the best management start at the CXO level with? selling in big quantities, then I will fail in does not lead to more and more but to a
of companies in the world. Better on average achieving results. crash, because one of your competitors is
than I have seen in Europe of the United Goldratt: When I start with a company, yes not taking an incremental approach but
States. There problem was that they had put I start from the CEO down, because from a Do you understand what that last sentence a breakthrough one, and eventually they
chains on themselves, in terms of regulations, business perspective, “grass roots” is just means? It’s fine to say that as long as you crush you.
tariffs, etc. This is gone. usually too hard. sell 500 a month, you get the reduction in
price, but it does not mean you have to Gilmore: There really are companies
Because of it, the biggest boom is happening. It’s also because if you start in one function, order 500 at a time. Because if I still have achieving these kinds of results.
India is also growing at 8-10 percent per you improve that, but then immediately the to order 500, I can kiss away much chance
year, and salaries are also rising rapidly. So constraint just moves to another function. of improving my supply chain. Goldratt: Yes!
again, in just a few years you will see a huge
consumption market. Gilmore: But in “The Goal,” Alex was a Gilmore: Can the principles not be applied Gilmore: When you present this, do CXOs
plant manager. There was something in within a function? want detailed, specific examples?
Do you understand what together this the TOC constraints for him.
means? In a few years, we will triple the Goldratt: Let’s take R&D or new product Goldratt: Sometimes, but not usually. It’s
world consumption in 5 to 6 years. You will Goldratt: He was quite lucky. If you remember, development. Let’s say you have used TOC like reading “The Goal.” Does not that make
see supply chain bottlenecks everywhere in if he hadn’t have had the VP of Marketing to radically reduce development time. But simple, logical sense that you are convinced
the world. The best thing that ever happened on his side because of the problems he if the other strategies of the company have contains truth? It’s the same way when we
to us is what is happening now in China and was also facing, Alex would have crashed not changed, you will not know how to explain the principles to a CEO, with their
India. It is time to stop complaining about into the wall. effectively use this stream of new products data. Usually the first reaction is “Let’s do it!”
Chinese producers and focus on how to you can develop, and because of that the end Sometimes at an enterprise level, it’s even
enter the Chinese market or export to China Gilmore: So does TOC work for the VP of result will be you have too many engineers simpler than it was for Alex Rogo.
and India. What huge, beautiful markets. Supply Chain or not? and you will have to lay some of them off.
How would you like to be in the situation Bron: SupplyChainDigest 2006
Gilmore: Yes, if they continue to open Goldratt: Absolutely yes, because you have to where you get buy-in from the engineers to
their markets…. assume his or her boss is not an idiot. They do this in a much better way, and then come
should drag the CEO to one of our seminars back and say as a reward for this effort, we

16 17



An interview with Eli Goldratt

Interview
What led you to turn from manufacturing I said, ‘No, what we call irrational behavior
to product development? is simply the person behaving according
“If you look at my work as a whole, you’ll to another set of assumptions. But within

On Saddam Hussein, see that I started in production, then went to
finance and accounting, then to marketing
and sales, then to distribution, and, finally,
that he is very logical.’ So we took as an
experiment the most illogical person you
can imagine—Saddam Hussein—and we

milestones, and how
with Critical Chain, to projects. In Theory built the future scenario of his actions. And
of Constraints you start to believe more he was behaving so logically that we knew
and more that there is one constraint that what he was doing before he
is limiting the leap of the company. But did. Many times we claim that people are

the theory of constraints when you open that constraint, of course,
performance does not jump to infinity.
Some other constraint jumps to the center
behaving irrationally because we put them
into a conflict and we are looking at only one
side of the conflict. So of course it looks to

applies to project
for performance improvement. us as though they are behaving irrationally.”
“Many times, it is simply moving from one
function to another. The problem is, when it You seem to say that a key part of
moves to another function you don’t know planning is to really focus on a few key

management
how to handle the new constraint. Then constraints. One of these is resources.
you start to stagnate. Unfortunately, what How does an organization get the kind
happens is not really stagnation because after of internal collaboration needed to move
awhile the stagnation turns into common resources where they are needed, when
practice. Then you may ruin the company. they are needed?
With his latest novel, Critical Chain, Theory of Constraints pioneer So if you improve production what happens “You must always go for a win/win solution.
many times is that the constraint moves to What we usually do is act out of a culture
Eli Goldratt tries to do for project management what he did for distribution or sales. Then you improve that that teaches us to think the cake is finite.
and it moves to engineering. And then what? Then you have lose/lose: if I win, you must
manufacturing in his 80s best seller The Goal. In a largely favorable That’s what led me to product development lose. You can always find resources, if you
and project management.” really want to. Look at the peace process
Harvard Business Review critique, Jeffrey Elton and Justin Roe [Middle East]. They argued about three
The ideas in Critical Chain sound great—if percent and then they found it in the Judean
argue that Goldratt’s book presents powerful suggestions for only everyone was that rational! Desert. There is always a way the question
“Everybody is rational. Unfortunately, not is do you want to do it?
individual project management, but falls short when it comes to everybody starts from rational assumptions. I “It’s much easier in an organization. If you
had this debate once with Israeli intelligence. look at my books, you’ll see that I show
overall portfolio management and overlooks what they think may They wanted to use my methods. After four that the thing that needs to be sacrificed
or five days, when we had analyzed many are some policies that nobody wants to
be the greatest constraint: a shortage of skilled leaders. We spoke things, they said, ‘Wait a minute. We have here protect. Nobody. The size of the batch, for
a preconception problem. We’re analyzing example. Everybody thinks it’s stupid, but it’s
with him about these and other issues: everything logically. But some of our enemies convention. Or look at how we do projects
are not logical. So whatever we do in terms of in a multi-project environment. It looks like
predicting what they are doing is worthless.’ four people trying to rush through the same

18 19



Interview
door at the same time. Eventually they will How do you respond to those who Is it a correct reading of your book that lot of education, particularly of managers.
come out--a little bit crippled! say the biggest constraint in product you don’t favor formal milestones? After it’s done once, the whole environment
“If they go one at a time, there is no problem. development is lack of executive decision- “I hate formal milestones! It’s one of the changes because everyone gains so much
But there is a stupid assumption that says making discipline? diseases. It’s nobody’s intention to get control confidence.”
the earlier you start, the earlier you finish. Of course! How can you make a decision in such a way that you definitely lengthen the
That’s not always the case. And once you when the things on the table are so big and project, yet that’s what formal milestones What do you say to those who see the
explain the whole cause and effect logic, you whoever you ask says, ‘I don’t know’? Even do. The problem with milestones: if you book as mostly suited to individual
don’t have a problem. It’s not as though when you ask, ‘When are you going to finish, have a milestone two months from now projects?
we are trying to sacrifice something holy.” in two months or four months?’ you get you immediately get the student syndrome. “Before I wrote the book, I knew I was dealing
‘I don’t know.’ And the same people who ‘There’s time, let’s waste it.’ You’ll get some with two distinct markets: the single-project
GOLDRATT’S DISCIPLINE refuse to give the data complain about lack surprises and the safety’s gone. Then, when market and the multi-project environment. I
“Part of the discipline Goldratt offers of decisions from the top. What happens if you achieve the milestone, it’s ‘Now we can told myself that it would take a long time for
involves the proper use of measurements. you sort things differently, by sacrificing one relax.’ Then another week is gone. All in the the multi-project environment to move on
He reminds managers of two criteria: of the assumptions, is that all of a sudden name of control! my ideas. The cultural change needed would
measurements should induce the parts you can give reliable estimates and the same be tremendous--it would take longer than it
to do what is good for the whole, and person can make a decision on the spot.” Buffers are a key element of your Critical took to change production. I wrote The Goal
measurements should direct managers to Chain thinking. What about the tendency in 1984, for example, and only now are the
those parts that need their attention. Many Jeffrey Elton and Justin Roe, writing to pad? ideas being widely implemented.
managers rely on milestones to monitor about Critical Chain in Harvard Business “Today, we put a buffer in for each activity. “Because cultural change in product
a project’s progress (and individuals’ Review, suggest that more often than not Everyone is protecting his own activity. development in a multi-task environment
performance, but that practice violates the big constraint is a real shortage of His ‘realistic’ estimate means he has a 50 is so much bigger, I decided to focus on
both of the above principles. Following leadership skills. percent chance of finishing, which means the single project. The person in charge is
the maxim, How you measure people is “I disagree. I find that in most organizations, he’s already padded, he already has a buffer. a single manager. He’s already in trouble
how they’ll behave, the book [The Critical when we are dealing with the more tangible The idea I’m proposing--and it’s known to so he’ll do anything to save his project. I
Chain] points out that management by constraints, the constraint ends up usually every student of statistics--is that statistical was surprised by the intense interest in
milestone motivates members of project being friction in human relationships.” deviations average out. the book that came from the multi-project
teams and their managers to insert safety “Which means that if you strip the safety from environment. I immediately wrote another
time before each milestone. Once safety How does the time it takes to implement individual tasks and put it at the end of the book called Project Management the TOC
time has been added to each task, various Theory-of-Constraints thinking in product path you need much less safety to handle Way in which I show exactly how to implement
mechanisms arise that waste that time. development differ from production? the same amount of deviations. “You don’t in a multi-project environment.”
So, Goldratt concludes, the fewer the What key behaviors change? Is it about really care if each task, on its own, will be
milestones, the fewer the delays. We have eliminating waste? early or late. What you care is whether the Is it available?
found such dysfunctional behavior occurring “It takes six weeks in production, six months project will be early or late. So the whole idea “I’ve distributed about 4,000 copies personally,
when milestones are set as artificial review in product development. Behaviors that is to swap all the safety to the end. so the pressure’s off. Hopefully it will be
points tied to the end of a development change? Better communication, increased “This is not so easy because you have to published by the end of the year, but it’s
phase or task stream.” trust, greater pride, and people not running convince people to give up covering their not at the top of my current priority list.”
around like chickens with their heads cut ass in order to protect the company. You’re
Jeffrey Elton and Justin Roe off. You call it eliminating waste, I call it asking them to trust their managers not to What is at the top of your priority list?
“Bringing Discipline to Project Management” eliminating ingrained stupidities!” crucify them and most people don’t trust “When I talk to managers, I find that one of the
Harvard Business Review March-April 1998 their managers very much for that sort of biggest problems in most companies is that
thing. So, to implement this idea means a most of their people don’t see the company

20 21



as a whole. They see fragments. Because of this, you
get localized optimums, many wrong decisions, and
much miscommunication. So the question I’m currently
MBA in één dag:
focused on is: can we educate the entire management
of the company, in one shot, in a short time, and very
ultrakort en tóch volledig
effectively? I don’t know.
“But next March I’m doing an eight-session satellite Wat verklaart het succes van MBA in één dag? Waarin zit de
program starting from the same base and covering kracht? MBA in één dag biedt antwoord op twee fundamentele
all functions. I’ll show exactly how to change each vragen van managers:
function to common sense rather than the prevailing
view. We’ll look at how everything ties together, hoping Vraag 1: Hoe blijf ik bij?
that this will generate a common language, much better U heeft een méér dan volle werkweek. Het bijhouden van de management-
communication, and a slew of correct initiatives that literatuur schiet er dan bij in. Dat is logisch, maar ook zonde. Want juist met de
can lift the company.” inzichten uit managementboeken kunt u effectiever en slimmer werken. En dat
bespaart weer veel tijd. Maar welke boeken zijn écht goed en relevant voor u als
Will you share your thinking about this at MRT’s manager? Hoe scheidt u het kaf van het koren? Wat moet u lezen en wat niet?
conference? Iemand moet een selectie maken.
“Yes, yes, yes. Project management was the last piece
of the puzzle. Now all the parts are covered by the Vraag 2: Hoe zat het ook alweer?
same logic. You’ve seen how Critical Chain works with Tijdens uw opleiding heeft u de boeken van goeroes als Henry Mintzberg,
the concept. Now I can show how everything is tied Philip Kotler of Michael Porter gelezen. Maar dat is alweer een hele tijd geleden.
together and how every function can understand and Terwijl u juist nú deze kennis zou kunnen toepassen: hoe geef ik beter leiding?
help the other functions.” Hoe organiseer ik mijn bedrijf het beste? Hoe communiceer ik de strategie van
mijn organisatie? Eigenlijk zouden Mintzberg, Kotler, Porter en al die anderen
Key Learnings: eens opnieuw voorbij moeten komen.
• When you open one constraint, some other
constraint is likely to take its place Bijblijven + opfrissen = MBA in één dag
• Often constraints merely move from one function In ‘MBA in één dag’ smelten deze twee vragen samen in een wervelend
to another seminarprogramma. Ben Tiggelaar behandelt de greatest hits in management.
• The best way to get collaborative resource sharing Hij selecteerde de beste inzichten uit acht meter managementboeken met maar
is always to go for win/win één criterium: wat kan een manager hier praktisch mee? Morgen al! Daarmee is
• It’s about “eliminating ingrained stupidities” MBA in één dag uitgegroeid tot de snelste manier om managementkennis op te
• When it comes to buffers, don’t focus on individual frissen en aan te scherpen.
tasks; keep your eye on the end of the project
• The big problem in most companies today is Een MBA-opleiding in één dag: dat kan toch niet?
getting people to see the company as a whole Uiteraard is dit seminar geen volwaardige MBA opleiding. En u krijgt ook geen
titel om achter uw naam te zetten. Maar toch: managen is een praktisch vak en
MBA in één dag is ontdaan van alle fratsen die veel opleidingen zo onnodig
Bron: Management Roundtable, 1998 hoogdravend maken. Méér dan de inzichten uit dit seminar heeft u niet nodig
om effectief te zijn als manager.

22

MBA in één dag | El i Goldratt


MBA in één dag®
Eli Goldratt
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artikelen van of over Eli Goldratt.

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MBA Miniboekje Eli Goldratt.indd 24 04-05-10 09:28

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