Playing To Win
The Goal & Playing to Win
Compatibility & Utility
A remarkable number of people ask me about Eliyahu Goldratt’s book The Goal: A Process of Ongoing Improvement. Students especially used to ask me when I was Dean of Rotman. I generally just begged off the question because I hadn’t read the book. I don’t read enough — I write — though that is not a particularly good excuse. But the questions keep coming. People are obsessed about the book. So, I have dedicated this Playing to Win/Practitioner Insights (PTW/PI) piece to The Goal & Playing to Win: Compatibility & Utility.
Intellectual Content
OK, I finally read it. It was first published in 1984 and I read the 30th anniversary edition published in 2012, which appears to be the most recent revision. The core book is 337 pages, excluding the Appendix.
The book, in all of its 337 pages, makes two intellectual or conceptual points. The first is that if you wish to optimize the outputs of a system, you need to have an objective function — i.e., a clear goal. And it should be an intelligent one — an outcome that you really want.
The second is that any system will produce its outputs at the rate of the slowest step in the system. If a system is made of a single step, then the output accumulates at the rate of that single step. If the system is multistep, output accumulates at the rate of slowest of all of the steps.
Therefore, to produce more of the desired output faster, one should work first to debottleneck the slowest step because it is the binding constraint of the whole system — and then the next slowest, and next slowest and so on.
That’s it. That is what the 337 pages teaches the reader conceptually. There is good news and bad news in this.
The good news is that those conceptual points are both profoundly right and super important. They are not trivial insights about the way the business world works.
The bad news is that at the time of the writing of the book — and more so now, 40 years later — there was absolutely nothing new in these two conceptual insights.
I know because I graduated from my MBA in 1981, three years before the initial publication of The Goal. In my first year required Managerial Economics (ME) course, we learned about optimization and linear programming. We did a case on an oil refinery. The question was what mixture of heating oil, regular gas, premium gas, jet fuel, etc. should it produce with the incoming flow of crude oil? It was a flexible refinery and could be set up to produce greatly varying proportions of those refined products. We learned that in order to perform that optimization exercise, we needed to establish an objective function — otherwise any doable combination would make as much sense as the next. And the obvious answer was the total market value of the outputs — which varied over time with shifting market prices and was constrained by the chemical characteristics of the crude oil flowing into the refinery.
Then in the first year required Production & Operations Management (POM) course, we took the National Cranberry Cooperative case, originally written in 1974 and probably taught still today. It is a classic because it teaches about system bottlenecks. The cranberries on Cape Cod ripen at close to the same time in the bogs across the Cape and must be processed before they begin rotting. They all get trucked to the same processing plant at which the crushing step becomes the bottleneck of the whole system — not picking, not trucking, not bottling. For the entire cranberry cooperative, crushing was the rate limiting step. We learned about how it backed up the whole system and how we needed to think about debottlenecking this binding constraint.
Two things are immediately obvious about these two points — need for an objective function and the importance of the binding constraint. First, because they were central points of two required first year MBA courses they must be — and are — really important conceptual points to understand. Second, because they were central points of two required first year courses taught years before the book was published, they just are not intellectual points that are new, novel, earthshattering, frame-breaking, or any such thing.
For me, they are in stark contrast to what was going on in the second-year elective, Industry & Competitive Analysis (ICA) (which I discuss further here), taught by Michael Porter and his teaching group. This course taught the chapters of his Competitive Strategy book that was being released to the public at the same time I was being taught the course. That book broke new ground and fundamentally changed a field.
Yet when I just checked, Competitive Strategy, had an Amazon rank of #28,965 and The Goal, #2,332. From an intellectual standpoint, I just don’t get it. Both are impressive rankings for 40+ year-old business books. But a dramatically worse ranking for a seminal conceptual tour de force than one which described the content of first-year MBA courses already in existence? From an intellectual content perspective, I just don’t get it!
It’s the Format, Stupid
But whenever I see a success phenomenon that I can’t explain, I am compelled to dig deeper. How can a book with this little intellectual contribution have such staying power and sell better than business classics like Competitive Strategy, The Innovator’s Dilemma, and Blue Ocean Strategy?
Then it hit me. It is because of the format. The Goal is a novel. It is explicitly fictional — unlike many business books that are functionally fictional in their exaggerations and manipulations of ‘case studies.’ The Goal explains the concepts through plant manager, Alex Rogo. It even weaves in a story about Alex’s fraught relationship with his wife Julie. The fictional structure enables several positive features.
First, unlike with a real case study, Goldratt can unfold Alex’s story in exactly the order he wants, with exactly the steps he wants. No case study can ever be that perfect — and if it was, it would seem fake, too good to be true. But no such problem exists in a work of fiction.
Second, Goldratt can deploy the hero’s journey storyline which has been shown to be the most successful storyline in the history of humanity and format of virtually every successful fictional work from The Odyssey to Lord of the Rings to Star Wars. Our hero starts out fine. Then disaster strikes — headquarters threatens to close his plant — and our hero is forced to embark on a dangerous journey. Our hero faces terrible odds against him. But he fights back bravely and slowly but surely the tide turns and he ends up a hero with a better position by far than what he started with — he saves the plant and gets promoted to divisional vice-president based on his heroic work.
Not only that, Goldratt deploys a second hero’s journey. Alex and Julie’s relationship starts in an OK place, then disaster happens, and she leaves him. Divorce lurks. Again, slowly but surely, Alex fights his way back and ends up with a better relationship with his wife than before the crisis.
In the end, The Goal is clearly unlike any other business book of which I am aware. It uses a hero’s journey-based novel format to teach an otherwise hardly scintillating topic — production optimization. That is why it has sold more than ten million copies. Readers are drawn into the format and the hero’s journey is captivating, as it is whenever it is deployed with a modicum of skill.
It does get me wondering about the limitations of the concept of the business book — as a long-form expository prose essay with limited illustrations. While I think that some people find the format appealing, not many do, and arguably fewer with each passing year.
And it gets me thinking about other format innovation in the world of conceptual business ideas. And what immediately comes to mind is Business Model Generation (BMG), the phenomenally successful first book by my friends Yves Pigneur and Alex Osterwalder. It is one of the best-selling business books of all time. It has great content, as I have written about before. But I can’t help wondering whether part of its outsized success is because it has a unique format — an illustrated book. It really goes against convention. I loved the format as did my co-author Jen Riel and we tried to get the publisher for Creating Great Choices to go with a BMG-like format, they kept pushing and pushing us back toward something that looks more like a regular business book than an illustrated book.
And that gets me thinking about long form versus short form. Thankfully, my co-authored book with AG Lafley, Playing to Win (PTW), has been a hugely successful best-seller. And this isn’t a completely fair comparison because a reader has to fork over (at least currently) $16.69 for a hardcover of PTW while I make my PTW/PI available for free (or at worst for no additional cost to the $50/year subscription for all of Medium’s terrific content), but in three and a half years of PTW/PI, there have been almost twice the number of PTW/PI reads as there are sales of PTW in 11 years — and PTW is a best-seller, in the tail of the distribution for business books over the past quarter century.
And then what about prose versus video? Within a week, my A Plan is Not a Strategy video will hit 4 million views, in under two years since its release. That is greater than the combination of PTW/PI views and readership of my 13 books combined. Heck, my video on The Art of War will probably catch up to PTW/PI in total views within a year or so (it came out only 15 months ago).
It is not as though the notion that medium matters is at all new. It was a full sixty years ago that the great Canadian scholar Marshall McLuhan declared “the medium is the message” in his classic, Understanding Media: The Extensions of Man. The message embedded in the medium of a traditional business book is “this is going to take a long time, require lots of committed attention, and (thanks to the general track record of business books) there is a 90% chance that it isn’t going to be very useful.” The message embedded in a 10-minute video — particularly any one that has a decent number of views already — is “someone has made the effort to make this short and sweet, and even if it isn’t as good as its views-number suggests, I will have only wasted 10 minutes.”
And back to the subject at hand, I suspect the message of a business book in the medium of a hero’s journey-based novel sends the message “you won’t have to force yourself to concentrate to maintain commitment; it will draw you along.”
That just might be a winning formula!
Practitioner Insights
Everyone needs to consume what intellectual content they need and want, in whatever way works for them. If hero’s journey-based business novel The Goal works for you, then I am happy and have nothing negative to say. I might well have enjoyed reading and reflecting on The Goal more than doing all those cases in first year ME and POM.
I would declare The Goal to be entirely compatible with PTW, but it is hard to ferret out any particular utility for PTW.
My only complaint about The Goal is the unceremonious dropping of the second hero’s journey story — Alex and Julie’s marriage. It was a realistic and gripping story — at least for me. I read with great interest to see how it would play out. The relationship was going nicely as of the end of Chapter 36, but there was no sense of conclusion. Then Julie disappeared completely from Chapters 37–40, never to return as the hero’s other journey proceeded. I was bereft! Otherwise, no disagreements; no complaints.
