The Goal: A Process of Ongoing Improvement, page 5
But when I look back to him, Jonah doesn’t seem very impressed. I figure, well, he’s an academic person; he’s not going to understand the business world.
"You say your plant uses robots?’’ he asks.
"In a couple of departments, yes,’’ I say.
"Have they really increased productivity at your plant?’’
"Sure they have,’’ I say. "We had—what?’’ I scan the ceiling for the figure. "I think it was a thirty-six percent improvement in one area.’’
"Really... thirty-six percent?’’ asks Jonah. "So your company is making thirty-six percent more money from your plant just from installing some robots? Incredible.’’
I can’t hold back a smile.
"Well...no,’’ I say. "We all wish it were that easy! But it’s a lot more complicated than that. See, it was just in one department that we had a thirty-six percent improvement.’’ Jonah looks at his cigar, then extinguishes it in the ashtray. "Then you didn’t really increase productivity,’’ he says. I feel my smile freeze.
"I’m not sure I understand,’’ I say.
Jonah leans forward conspiratorially and says, "Let me ask you something—just between us: Was your plant able to ship even one more product per day as a result of what happened in the department where you installed the robots?’’
I mumble, "Well, I’d have to check the numbers . . .’’
"Did you fire anybody?’’ he asks.
I lean back, looking at him. What the hell does he mean by that?
"You mean did we lay anybody off? Because we installed the robots?’’ I say. "No, we have an understanding with our union that nobody will be laid off because of productivity improvement. We shifted the people to other jobs. Of course, when there’s a business downturn, we lay people off.’’
"But the robots themselves didn’t reduce your plant’s people expense,’’ he says.
"No,’’ I admit.
"Then, tell me, did your inventories go down?’’ asks Jonah.
I chuckle.
"Hey, Jonah, what is this?’’ I say to him.
"Just tell me,’’ he says. "Did inventories go down?’’
"Offhand, I have to say I don’t think so. But I’d really have to check the numbers.’’
"Check your numbers if you’d like,’’ says Jonah. "But if your inventories haven’t gone down . . . and your employee expense was not reduced... and if your company isn’t selling more products—which obviously it can’t, if you’re not shipping more of them—then you can’t tell me these robots increased your plant’s productivity.’’
In the pit of my stomach, I’m getting this feeling like you’d probably have if you were in an elevator and the cable snapped.
"Yeah, I see what you’re saying, in a way,’’ I tell him. "But my efficiencies went up, my costs went down—’’
"Did they?’’ asks Jonah. He closes his book.
"Sure they did. In fact, those efficiencies are averaging well above ninety percent. And my cost per part went down considerably. Let me tell you, to stay competitive these days, we’ve got to do everything we can to be more efficient and reduce costs.’’
My drink arrives; the waitress puts it on the table beside me. I hand her a ten and wait for her to give me the change.
"With such high efficiencies, you must be running your robots constantly,’’ says Jonah.
"Absolutely,’’ I tell him. "We have to. Otherwise, we’d lose our savings on our cost per part. And efficiencies would go down. That applies not only to the robots, but to our other production resources as well. We have to keep producing to stay efficient and maintain our cost advantage.’’
"Really?’’ he says.
"Sure. Of course, that’s not to say we don’t have our problems.’’
"I see,’’ says Jonah. Then he smiles. "Come on! Be honest. Your inventories are going through the roof, are they not?’’
I look at him. How does he know?
"If you mean our work-in-process—’’
"All of your inventories,’’ he says.
"Well, it depends. Some places, yes, they are high,’’ I say.
"And everything is always late?’’ asks Jonah. "You can’t ship anything on time?’’
"One thing I’ll admit,’’ I tell him, "is that we have a heck of a problem meeting shipping dates. It’s a serious issue with customers lately.’’
Jonah nods, as if he had predicted it.
"Wait a minute here... how come you know about these things?’’ I ask him.
He smiles again.
"Just a hunch,’’ says Jonah. "Besides, I see those symptoms in a lot of the manufacturing plants. You’re not alone.’’
I say, "But aren’t you a physicist?’’
"I’m a scientist,’’ he says. "And right now you could say I’m doing work in the science of organizations—manufacturing organizations in particular.’’
"Didn’t know there was such a science.’’
"There is now,’’ he says.
"Whatever it is you’re into, you put your finger on a couple of my biggest problems, I have to give you that,’’ I tell him. "How come—’’
I stop because Jonah is exclaiming something in Hebrew. He’s reached into a pocket of his trousers to take out an old watch.
"Sorry, Alex, but I see I’m going to miss my plane if I don’t hurry,’’ he says.
He stands up and reaches for his coat.
"That’s too bad,’’ I say. "I’m kind of intrigued by a couple of things you’ve said.’’
Jonah pauses.
"Yes, well, if you could start to think about what we’ve been discussing, you probably could get your plant out of the trouble it’s in.’’
"Hey, maybe I gave you the wrong impression,’’ I tell him. "We’ve got a few problems, but I wouldn’t say the plant is in trouble.’’
He looks me straight in the eye. He knows what’s going on, I’m thinking.
"But tell you what,’’ I hear myself saying, "I’ve got some time to kill. Why don’t I walk you down to your plane? Would you mind?’’
"No, not at all,’’ he says. "But we have to hurry.’’
I get up and grab my coat and briefcase. My drink is sitting there. I take a quick slurp off the top and abandon it. Jonah is already edging his way toward the door. He waits for me to catch up with him. Then the two of us step out into the corridor where people are rushing everywhere. Jonah sets off at a fast pace. It takes an effort to keep up with him.
"I’m curious,’’ I tell Jonah, "what made you suspect something might be wrong with my plant?’’
"You told me yourself,’’ Jonah says.
"No, I didn’t.’’
"Alex,’’ he says, "it was clear to me from your own words that you’re not running as efficient a plant as you think you are. You are running exactly the opposite. You are running a very in efficient plant.’’
"Not according to the measurements,’’ I tell him. "Are you trying to tell me my people are wrong in what they’re reporting . . . that they’re lying to me or something?’’
"No,’’ he says. "It is very unlikely your people are lying to you. But your measurements definitely are.’’
"Yeah, okay, sometimes we massage the numbers here and there. But everybody has to play that game.’’
"You’re missing the point,’’ he says. "You think you’re running an efficient plant... but your thinking is wrong.’’
"What’s wrong with my thinking? It’s no different from the thinking of most other managers.’’
"Yes, exactly,’’ says Jonah.
"What’s that supposed to mean?’’ I ask; I’m beginning to feel somewhat insulted by this.
"Alex, if you’re like nearly everybody else in this world, you’ve accepted so many things without question that you’re not really thinking at all,’’ says Jonah.
"Jonah, I’m thinking all the time,’’ I tell him. "That’s part of my job.’’
He shakes his head.
"Alex, tell me again why you believe your robots are such a great improvement.’’
"Because they increased productivity,’’ I say.
"And what is productivity?’’
I think for a minute, try to remember.
"According to the way my company is defining it,’’ I tell him, "there’s a formula you use, something about the value added per employee equals....’’
Jonah is shaking his head again.
"Regardless of how your company defines it, that is not what productivity really is,’’ he says. "Forget for just a minute about the formulas and all that, and just tell me in your own words, from your experience, what does it mean to be productive?’’
We rush around a corner. In front of us, I see, are the metal detectors and the security guards. I had intended to stop and say good-bye to him here, but Jonah doesn’t slow down.
"Just tell me, what does it mean to be productive?’’ he asks again as he walks through the metal detector. From the other side he talks to me. "To you personally, what does it mean?’’
I put my briefcase on the conveyor and follow him through. I’m wondering, what does he want to hear?
On the far side, I’m telling him, "Well, I guess it means that I’m accomplishing something.’’
"Exactly!’’ he says. "But you are accomplishing something in terms of what?’’
"In terms of goals,’’ I say.
"Correct!’’ says Jonah.
He reaches under his sweater into his shirt pocket and pulls out a cigar. He hands it to me.
"My compliments,’’ he says. "When you are productive you are accomplishing something in terms of your goal, right?’’
"Right,’’ I say as I retrieve my briefcase.
We’re rushing past gate after gate. I’m trying to match Jonah stride for stride.
And he’s saying, "Alex, I have come to the conclusion that productivity is the act of bringing a company closer to its goal. Every action that brings a company closer to its goal is productive. Every action that does not bring a company closer to its goal is not productive. Do you follow me?’’
"Yeah, but . . . really, Jonah, that’s just simple common sense,’’ I say to him.
"It’s simple logic is what it is,’’ he says.
We stop. I watch him hand his ticket across the counter.
"But it’s too simplified,’’ I tell him. "It doesn’t tell me anything. I mean, if I’m moving toward my goal I’m productive and if I’m not, then I’m not productive—so what?’’
"What I’m telling you is, productivity is meaningless unless you know what your goal is,’’ he says.
He takes his ticket and starts to walk toward the gate.
"Okay, then,’’ I say. "You can look at it this way. One of my company’s goals is to increase efficiencies. Therefore, whenever I increase efficiencies, I’m being productive. It’s logical.’’
Jonah stops dead. He turns to me.
"Do you know what your problem is?’’ he asks me.
"Sure,’’ I say. "I need better efficiencies.’’
"No, that is not your problem,’’ he says. "Your problem is you don’t know what the goal is. And, by the way, there is only one goal, no matter what the company.’’
That stumps me for a second. Jonah starts walking toward the gate again. It seems everyone else has now gone on board. Only the two of us are left in the waiting area. I keep after him.
"Wait a minute! What do you mean, I don’t know what the goal is? I know what the goal is,’’ I tell him.
By now, we’re at the door of the plane. Jonah turns to me. The stewardess inside the cabin is looking at us.
"Really? Then, tell me, what is the goal of your manufacturing organization?’’ he asks.
"The goal is to produce products as efficiently as we can,’’ I tell him.
"Wrong,’’ says Jonah. "That’s not it. What is the real goal?’’ I stare at him blankly.
The stewardess leans through the door.
"Are either of you going to board this aircraft?’’
Jonah says to her, "Just a second, please.’’ Then he turns to me. "Come on, Alex! Quickly! Tell me the real goal, if you know what it is.’’
"Power?’’ I suggest.
He looks surprised. "Well... not bad, Alex. But you don’t get power just by virtue of manufacturing something.’’
The stewardess is pissed off. "Sir, if you’re not getting on this aircraft, you have to go back to the terminal,’’ she says coldly.
Jonah ignores her. "Alex, you cannot understand the meaning of productivity unless you know what the goal is. Until then, you’re just playing a lot of games with numbers and words.’’
"Okay, then it’s market share,’’ I tell him. "That’s the goal.’’
"Is it?’’ he asks.
He steps into the plane.
"Hey! Can’t you tell me?’’ I call to him.
"Think about it, Alex. You can find the answer with your own mind,’’ he says.
He hands the stewardess his ticket, looks at me and waves good-bye. I raise my hand to wave back and discover I’m still holding the cigar he gave me. I put it in my suit jacket pocket. When I look up again, he’s gone. An impatient gate-agent appears and tells me flatly she is going to close the door.
5
It’s a good cigar.
For a connoisseur of tobacco, it might be a little dry, since it spent several weeks inside my suit jacket. But I sniff it with pleasure during Peach’s big meeting, while I remember that other, stranger, meeting with Jonah.
Or was it really more strange than this? Peach is up in front of us tapping the center of a graph with a long wood pointer. Smoke whirls slowly in the beam of the slide projector. Across from me, someone is poking earnestly at a calculator. Everyone except me is listening intently, or jotting notes, or offering comments.
". . . consistent parameters . . . essential to gain...matrix of advantage...extensive pre-profit recovery . . . operational indices... provide tangential proof. . . .’’
I have no idea what’s going on. Their words sound like a different language to me—not a foreign language exactly, but a language I once knew and only vaguely now recall. The terms seem familiar to me. But now I’m not sure what they really mean. They are just words.
You’re just playing a lot of games with numbers and words.
For a few minutes there in Chicago’s O’Hare, I did try to think about what Jonah had said. He’d made a lot of sense to me somehow; he’d had some good points. But it was like somebody from a different world had talked to me. I had to shrug it off. I had to go to Houston and talk about robots. It was time to catch my own plane.
Now I’m wondering if Jonah might be closer to the truth than I first thought. Because as I glance from face to face, I get this gut hunch that none of us here has anything more than a witch doctor’s understanding of the medicine we’re practicing. Our tribe is dying and we’re dancing in our ceremonial smoke to exorcise the devil that’s ailing us.
What is the real goal? Nobody here has even asked anything that basic. Peach is chanting about cost opportunities and "productivity’’ targets and so on. Hilton Smyth is saying hallelujah to whatever Peach proclaims. Does anyone genuinely understand what we’re doing?
At ten o’clock, Peach calls a break. Everyone except me exits for the rest rooms or for coffee. I stay seated until they are out of the room.
What the hell am I doing here? I’m wondering what good it is for me—or any of us—to be sitting here in this room. Is this meeting (which is scheduled to last for most of the day) going to make my plant competitive, save my job, or help anybody do anything of benefit to anyone?
I can’t handle it. I don’t even know what productivity is. So how can this be anything except a total waste? And with that thought I find myself stuffing my papers back into my briefcase. I snap it closed. And then I quietly get up and walk out.
I’m lucky at first. I make it to the elevator without anyone saying anything to me. But while I’m waiting there, Hilton Smyth comes strolling past.
"You’re not bailing out on us, are you Al?’’ he asks.
For a second, I consider ignoring the question. But then I realize Smyth might deliberately say something to Peach.
