Friday, April 12, 2013

Our mind is the biggest bottleneck. Think simple!

Dr. Eliyahu Goldratt
The Choice
Productivity & Quality Publishing Pvt Ltd, 2009. pp. 173, Rs. 269

The Choice is yet another gem from the author of “The Goal” and “It’s Not Luck”, Dr. Eliyahu Goldratt, famous for his Theory of Constraints. This is one of the last books written by Dr. Goldratt in his short illustrious life.
The Choice is a natural progression from the two earlier books. In the first he enlightened readers about the concept of identifying the key constraint in a system and trying to resolve it for better output. While in the latter, he went a step ahead in explaining how to handle complex problems using the cause and effect method. Once we define all the probable causes, we can pinpoint the root cause and go about eliminating it.
The brilliance of this book lies in the basic message that people perceive business to be something extremely complex and thus requiring complex solutions for challenges. The honest fact is business is inherently simple if we look properly. The reason for this mindset lies in our inability to draw a proper cause and effect relationship between business variables and to analyze the common trends. All it requires is a dose of common sense and a keen eye for detail. Dr. Goldratt challenges the readers to think from a fresh perspective and shed all the old long-held notions and assumptions in the process to develop a fresh vision. He suggests that if we have clarity of thought, we can surmount any kind of conflict and come to a harmonious outcome.
Dr. Goldratt professes the concept of “Inherent Simplicity” in this book. A remarkable quote that he mentions explains the meaning – As Newton said: when you dig deeper, you will find out that nature is simple and harmonious with itself. He proposes that we pursue a scientists approach in problem solving by designing a system and building relations instead of looking at issues in isolation.
Look at the following diagram, which system is complex? The first reaction is to say System B; however it is System A which is more complex if we consider the systems approach to degrees of freedom. 

In System B, if we touch one point we can impact the entire system which is not the case with System A. Thus, once we identify the root cause and fix it, we can see remarkable change in the outcome. He suggests that there are selected few reasons for inefficiency in business and stunted growth – our idea of everything being complex which stops us from looking for simple solutions, our tendency to conceal the core problem by focusing on multiple fringe issues (which increases the sense of complexity) and the worst of all is our propensity to blame everyone for the problem but ourselves. The knowledge imparted in this book can be applied in all kinds of industry segments with similar levels of success. If you look around, you will be able to identify the situations highlighted in the book.
Through a series of concentrated conversation with his daughter Efrat, Dr. Goldratt provokes his readers to find harmony in their environment through simple thinking. He asserts that there is always a scope to improve and create opportunities without getting bogged down by obstacles which are all creation of our mind. People can achieve astounding results by creating a win-win situation with their business collaborators, suppliers and stakeholders. Here he cautions the readers to first identify the “wins” for the other party. This builds trust. Often we try to search for our wins and then selling the idea to our business partners thus hitting a road block.  
The foundation of this book is an internal report titled “Freedom of Choice” by Dr. Goldratt written for his own consultancy in 2007. 
I strongly recommend this book to business owners and senior management of companies who are keen to create exponential growth of their business. The contents are most suitable for people who have strong understanding of manufacturing industry without which you will not be able to fully leverage the power of the contents of this amazing book.
Eliyahu Goldratt is a well-known scientist, educator and business guru. His Theory of Constraints (TOC) is part of the management lectures of leading business school MBA programs all over the world. Readers will derive tremendous value and business insight from the discourse in this remarkable book. However, this book will require your patience and attention and it is not meant for all. One cannot read the whole book in two hours and learn any valuable lesson. Unlike his other books, this one is more in-depth and provokes us to peacefully think and ponder, to identify similar issues in our own business and empower us to make some ground breaking changes in our approach to increase our revenues and grow. I highlighted parts of the book while reading it for the first time and go back to it quite often when I come across obstacles in my workplace. It gives me a definitive direction and inspiration to come out as a winner.
Published in TISA April 2013 Issue.

Why we should discharge Corporate Social Responsibility?

“People are going to want, and be able, to find out about the citizenship of a brand, whether it is doing the right things socially, economically and environmentally.” – Mike Clasper, President of Business Development, Proctor and Gamble (Europe)

A recent significant change in India's “Companies Bill” is the inclusion of Mandatory CSR for companies beyond a threshold limit. Immediately, there has been lot of gripe and grouse about the Government's “dictatorial” move which challenges the basic tenets of free and fair trade. It is felt that CSR clashes with the purpose of “for-profit” organizations. In 1970, Milton Freidman had written an elaborate article in this regard titled “The Social Responsibility of Business is to Increase its Profit”. However, that was the 70s and today we are in the 21st century.

“People are going to want, and be able, to find out about the citizenship of a brand, whether it is doing the right things socially, economically and environmentally.” – Mike Clasper, President of Business Development, Proctor and Gamble (Europe)

Tata’s AdvertisementOwing to the widespread reach of information technology and communication systems, impact of social media and increasing globalization, businesses can no longer survive on good products/ services or strong balance sheet. The stakeholders are more informed, sensitive and conscious than ever before. And these stakeholders are your customers, suppliers, bankers, financers, shareholders, enforcement agencies. They are reading, listening, viewing and systematically filing away the information in their subconscious mind.

How is that of importance to you as a business owner? It impacts their attitude and behavior towards the company. The consumer buying behavior largely comprises of emotional factors that are intangible. How they perceive a company and its products depends a lot on the overall image of the company and the general perception. These ideas and perception drive their buying decisions. The lenders and suppliers are similarly affected by what the company actually stands for and not just its ability to repay. Increasing attention to business value and responsibility towards the nurturing environment (in which the business thrives) is a positively evolving trend in the business circles. The focus is on long-term sustainability of vision and operations.

Though the term CSR is widely used, many business owners and people in general do not bother to truly understand its relevance and consequence. We need to put the concept of CSR into perspective. Intelligent companies are looking into CSR as tool for corporate strategy reinforcement, as an investment and long-term vision and commitment instead of just another compliance matter. They are ensuring that the money spent for discharging CSR serves both the parties – the giver (company) and the receiver (society). The true purpose of companies is to run profitably and increase the shareholder value. It is time owners understood that CSR is not a drain of resources but a better investment than spending on a 30 second slot of TV advertisement showing their detergent and tooth paste. Tata Group and its CSR activities are legend in India. There are lives of many people across the country that has been touched by Tata's activities in one way or the other. Tata Steel was the recipient of CNBC Asia's prestigious Corporate Social Responsibility Award for the company's outstanding CSR model. Taj group of hotels concentrates on education and employability as the key areas of its corporate sustainability efforts across India.

Sowing information to reap a better harvest' is about the innovative project pioneered by Tata Chemicals Limited. TCL's extension services, brought to farmers through the Tata Kisan Sansars, remote-sensing technology to analyse soil, information about crop health, pest attacks and coverage of various crops predicting the final output. This helps farmers adapt quickly to changing conditions. The result: healthier crops, higher yields and enhanced incomes for farmers.

Procter and Gamble has espoused many such initiatives and creating a positive image amongst their prospects and customers. In India, they are focused on education – the solution to our quest for progress.

Visit SMEWORLD.ORG to read the entire article.