Precisely Wrong

preciselyLast Thursday marked the fourth anniversary of the passing of someone who, while not typically credited as a “Lean” thinker, nevertheless had a profound impact on many Lean implementers. Eliyahu Goldratt, or Eli, was an Israeli physicist whose PhD thesis on queuing theory led him and many followers on an improvement odyssey based on his first book, The Goal, that paralleled and eventually supplemented the Lean revolution. I do not believe there is a definitive biography of Eli Goldratt, but there are many individual memories and stories. In 2011, I wrote one in my blog just two months before Dr. Goldratt’s death entitled: Epiphanitis. Here is another to commemorate a great thinker and influencer:

Eli Goldratt’s passionate and sometimes-brash approach to teaching was a hallmark, yet he approached his audience with the logic of a physicist. Holding a lit cigar while he challenged listeners to reject status quo thinking, he sometimes accented his points with profanity. As English was not his first language, I think he may not have been aware of which expletives were appropriate for which crowds – or maybe he was.   He was all about confrontation and doing battle with the conventional concepts that he considered to be the root cause of low productivity. I attended a seminar once where Eli’s TOC model was described by a participant as “too complex due to the myriad and flux of constraints in a typical factory.”   Dr. Goldratt shot back with visible anger, “If you think this is too difficult, then think harder.”

“Cost accounting is public enemy #1 to productivity,” he declared nearly ten years before I’d ever heard of Lean accounting. By 1986, with one year of production management under my belt, I began to understand his reasoning: On a daily basis, my factory’s direct labor was being scrutinized, while waste, which ran rampant, was a periodic footnote on a variance report. This confusion led me to attend a five-day Goldratt workshop to seek an alternative approach to production. When Eli entered the classroom as a guest speaker at the workshop, I approached him immediately with questions about standard costing and variances. He responded, “Traditional cost accounting is precisely wrong,” a comment that instantly and forever changed my thinking. We were measuring labor to four decimal places, yet ignoring all but the biggest production problems.   This particular practice unfortunately continues to this day as a major impediment to productivity improvement.

In 1985, Eli did not explicitly align himself with the Toyota Production System. His Theory of Constraints, TOC, was seen by many as competitive to TPS. But his emphasis on the defective underpinnings of traditional manufacturing were mostly in concert with TPS. He focused at a deep level on the root causes of poor performance: behavioral, logistical and managerial (policy-based) constraints. Goldratt’s TOC Effect-Cause-Effect Technique, or ECET (a topic for a later blog post) provided a powerful means for setting improvement priorities that I have used now for thirty years. In his sixty-four years, Eli Goldratt went on to publish nearly twenty insightful books, each developing his Theory of Constraints and broadening its application beyond the factory floor.

In 2007, Eli Goldratt summed up a kind of unified field theory, including TOC and TPS, as well as the Ford System. Entitled “Standing on the Shoulders of Giants,” the clip paid homage to the science of improvement, from one of its greatest if not improbable proponents: a PhD physicist who to my knowledge never worked a day in a factory. It’s seven minutes long and little hard to understand, but worth a listen.

Are you an Eli Goldratt fan? Share a personal story.


BTW: Speaking of constraints, don’t miss “Teatime with the Toast Dude,” my free monthly webinar, which this month (July 7) will discuss The Politics of Organizational Change. Sign up here.

Also, GBMP has a full schedule of summer Lean learning and benchmarking opportunities – including Plant Tours, one day workshops for manufacturing and healthcare and, as a licensed affiliate of the Shingo Institute, several Shingo Institute workshops planned for Texas, Idaho and Massachusetts. See the full line up of events on our website.

And of course you won’t want to forget about our upcoming September conference – the 11th Annual Northeast L.E.A.N. Conference. Get a sneak peek of the preliminary agenda here or visit the official conference website to read lots more and register.

5 thoughts on “Precisely Wrong

  1. Mark Graban

    When I was at GM from 1995 to 1997, there was very detailed TOC training that was given to us in the Powertrain plants… not from Goldratt himself, but from people trained by him. I had previously read The Goal as part of an undergraduate Industrial Engineering class.

    I remember one conflict being the idea of a constraint. The Lean folks at GM (yes, we had them) would say to design a line that was balanced… therefore no constraint. The TOC people would argue there SHOULD be a designed-in constraint at the first operation, to prevent too much WIP from accumulating in the line (which sounds like Lean).

  2. Tricia Sutton (@SuttonTricia)

    Eli Goldratt was one of my early exposures to lean types of concepts. I had read one of his books with great interest so convinced my employer to send me to a workshop near us in Chicago.

    Brain science has shown that memories from dramatic (or traumatic) situations are stronger, longer lasting. I still remember his workshop vividly after a couple decades as a result… I especially remember Eli walking up and down the aisle **yelling** at us: “DO YOU UNDERSTAND? YES OR NO?!”

    He’d look us straight in the eyes, demanding an honest answer. While it was initially intimidating, I saw that if someone did say “No,” he would go back over what someone didn’t understand and help change it to a “yes” …

    I also took to heart his unwillingness to shorten his sessions for executives because he did not believe they would get it if they did not give him the time to take them through whole thought process. He’d give up a client rather than not be effective or let someone believe they knew his concepts when they had not done enough.

    An amazing man.

  3. Hessel Visser

    It was in 1991 when I was invited for an Academic Jonah Course in the Netherlands. We had a great two weeks with Eli and learned more than the TOC. We did understand that his way of doing the discussion was even very special. His two secretaries did an amazing job in that time to make every day a report of all the discussions we had. I still have these discussions available. I look back to an amazing time and learned a lot of him. Be far most I did like his way of asking the right question and then listen as best as possible.

  4. Joshua Partogi

    Read Goldratt’s book “The Goal”. Still could not understand the overall idea of it. Maybe because my background is software development rather than manufacturing.


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