How do all work in sync with the company
Management Consultant Eliyahu Goldratt come to Brazil to talk about his experience in realigning production logistics firms to improve their performance
By Stela Campos De Sao Paulo
The Israeli Eliyahu Goldratt, PhD in physics, was ridiculed when he said that the university would investigate the possibility of applying the methodologies used in the exact sciences in the area of administration. "They told me it would never be possible because people are not predictable," he says. "I'd say that nothing in the world is 100% predictable." Obsessed with proving his thesis, in the '70s, he invented the "Theory of Constraints", which uses logical reasoning to map all the chains of cause and effect in the production systems of companies.
His thesis was exemplified in the '80s, the book "The Goal" bestseller consumed by two million readers, translated into 20 languages and adopted by over 200 universities. In it, Goldratt fictionalized account of how the findings of a general manager who needs to quickly boost the profits of their factory. Changing your way of seeing the workings of his company, he finds the "bottlenecks" that they jammed the company's overall performance and discover how to circumvent the situation by making all work in sync.
Now Goldratt is defending another much more controversial thesis called "Viable Vision". This time, he claimed that in four years a company applying its methodology can match their percentage of profit to its current sales. You talk to her that the "guru", quoted in renowned publications such as Fortune and BusinessWeek will come to St. Paul. He will participate in the seminar "Viable Vision", held on Wednesday at the Convention Centre Millennium.
Before leaving for Brazil the consultant, founder of the Avraham Y. Goldratt, gave an interview to Valor where he spoke about the importance of synchronizing "Gears" which move organizations and to measure the performance of people, and mainly tells them how it's done. The following are major excerpts:
Value: Having worked many years within large companies do. could tell what executives fear most when it comes to promoting changes in its administrative practices?
Eliyahu Goldratt: The principal managers fear, do not know if this is the best expression for it is its own administration. And I do not blame them because this is the hardest part of implementing a change. You must know how to synchronize all areas of the company, because everything should move the right way. You can not have some people sinking behind while others are jumping too quickly ahead. Synchronization is very important.
Value: Creating the commitment of people to change their business vision is the hardest part of the process?
Goldratt: It's probably the most difficult step. That is why before signing a "Viable Vision" we have to make sure that a step before that. At least 20 people at the top of the company have to be in consensus. Once the president understands what we do, the next step is to do an analysis to see if business is possible. Not always. Only 80% of companies have the necessary conditions.
Value: What is the importance of measuring the performance of people in these transformations?
Goldratt: We're not dealing with computers and atoms, but with people and you know what it means to measure their work. Tell me how you measure me and I'll tell you how I behave. Measurement is one of the forces that influence behavior. So if mediation is incorrect or conflicting you are creating a bottleneck in the production and unfortunately this is the case in many companies. If you do not measure, have no control, will not know where there is bureaucracy.
But when you measure one must keep in mind what it means to say how this situation will impact the measurement business, what will happen. Because it will influence people's behavior. The measurement will provide control but will also guide the people inside the company to do what is best for achieving the goal. This is not what happens today. One of the easiest things is to change the existing way of measuring to one that makes sense and everyone understands and collaborate.
Value: How to achieve better performance then the people?
Goldratt: This is called measurement. Be sure that the measurement by itself will encourage people to do what is good for the company as a whole. But you have to understand what is good for the company as a whole. Do not try to improve every area so that it becomes the best, this is wrong. It has to be the best, but giving support to the organization. No matter if she is better off alone. They are two different ways to make better.
Value: When Mr.. decided to apply the principles of the exact sciences in the administration?
Goldratt: I'm physical, my PhD is in physics. One day I looked at all the materials from university and realized that the approach we use in the exact sciences, physics, chemistry and biology, was very different from that used in the social sciences. I started to wonder what would happen if we applied the methodology of social sciences in the world, which involves people. Earlier, I said it was ridiculous to think about it just because people are not predictable.
Admittedly, people are not 100% predictable, but nothing like that. So I chose an area where I could find quickly was working or not. I chose one where I could measure results in figures. This is why I work with business and management. For example, if you are in a factory because everything can be measured when you have a solution and apply, you know quickly if it is working.
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