LO & Big Layoffs LO5677

Johanna Rothman (jr@world.std.com)
Fri, 16 Feb 1996 10:10:33 -0500

Replying to LO5588 --

At 8:41 PM 2/13/96, Rol Fessenden wrote:
>We are, in fact, pursuing all of those options with one degree of
>enthusiasm or another, plus a raft of other alternatives as well.
>However, that is not Goldratt's conjecture. In this mature and highly
>competitive industry, Bean can only grow at the expense of other
>companies. Goldratt seems to hypothesize that all companies can grow at
>once. I do not understand how that can be.

Ah, I was unclear. Goldratt would claim there is more demand out there,
but the current companies do not meet the demand. (I gave you some
examples of demand in the last message.) Your job is to figure out the
demand, and meet it. You meet it by increasing capacity, by changing
delivery or service, etc. It's not as cold-hearted as growing at the
expense of other companies, it's about not making the same mistakes. (JR's
law: the company who makes the fewest mistakes succeeds, not the company
that does things right.) Goldratt says that everyone makes mistakes. If
you can make fewer mistakes, especially if you can find a differentiating
market position, you can make progress. (Caveat: I am not a Jonah, I've
just read _The Goal_ and _It's Not Luck_.)

BTW, I'm sure someone like Drucker already formulated the law of fewest
mistakes, but it was a real lightbulb to me when I figured it out.

Let me attempt to draw a causal diagram. As you increase capacity, you
have more choices of market in which to compete in. Note that I did not
restrict capacity to US-soil based capacity. If that is a restriction,
then you have to decompose that problem. As you have more market choices,
management perspectives on the business change. Once perspective changes,
you can make business changes which then increase capacity. You can start
this loop anywhere. As a consultant, I generally get brought in to work on
capacity issues, but ask the mgmt perspective questions to understand what
to do with capacity problems.

Capacity -----> Market Choice
^ |
+ | | +
Make strategic Change in
and tactical mgmt perspective
business changes (What business are you in?)

I don't care what route people use to do this, TOC, systems thinking, etc.
But, it is critical that especially senior management *think* about the
business they want to be in, and the way the world is going. What is the
goal of their business, what do they want to accomplish, how do they want
to make the money???

>Therefore, the garment manufacturers are faced with a bigger issue trying
>to live up to Goldratt than retailers are. How are to achieve Goldratt's
>gaol goal in this environment?

If garment mftr's are convinced they need to retain "Made in USA", they
can use that as a selling point, and shift the focus from just price to
quality, delivery, service, customization, etc. You get to choose in which
market to compete, not the other way around.

I recommend you read the 2 books- they are not hard to read and we can
then talk in the same language.

And, if this is not interesting to others on the list, we can discuss this


Rothman Consulting Group, Inc. URL:http://world.std.com/~jr/
voice:617-641-4046 fax:617-641-2764 jr@world.std.com
Management Consulting for High Technology Product Development

jr@world.std.com (Johanna Rothman)

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>