The Goal is about new global principles of manufacturing. It’s about people who try to understand what makes their world tick so that they can make it better. As they think logically and consistently about the problems, they are able to determine cause and effect relationships between their actions and the results.

Developed by Eli Goldratt, The Goal contains a serious message for all managers in the industry and explains the ideas, which underline the Theory of Constraints (TOC). Goldratt believes that the goal of an individual or an organisation shouldn’t be defined in absolute terms. A good definition of a goal is one that sets us on a path of ongoing improvement. Pursuing such a goal necessitates more than one breakthrough—if anything, it requires many.

In this week’s episode, Jonesy and Ashton identify the breakthroughs that we should have to understand the underlying rules of our environment, and hopefully help us elevate the constraints in our personal or professional life.

What is the Goal?

What is the real goal of an organisation? Most people don’t ask this most basic question; they just show up to work and start their daily tasks. But there is only one goal for every company. What could it be?

Manpower

We employ thousands of people who we claim to be our most important asset. The company couldn’t function without employees with various skills and professions. And for the employees, their job provides a steady paycheck. But supplying jobs isn’t the sole reason why an organisation exists right?

Quality

That’s a bit of a buzzword. If you don’t manufacture a quality product you’ve got at the end is a bunch of expensive mistakes. You have to meet the customer’s requirements with a quality product, or before long you won’t have a business.

Producing quality products sounds like a good goal, but can it keep an organisation working? If the goal is to produce a quality product more efficiently, then how come Volkswagen isn’t still making bugs? That was a product with good quality and low cost.

Technology

What about technology? Being on the leading edge of technology it is essential; without good technology, we’re finished. But that can’t be right, because the most responsible roles aren’t necessarily in Research & Development. Technology is important but it isn’t the goal.

Money

Why else would a company start? Producing products, employing good people, selling products, or capturing market share—none of these would matter if the company isn’t profitable. If a company doesn’t make money in sales, maintaining contracts, or selling some of its assets, it will cease to function. So the main goal of an organisation is to make money.

3 Core Elements Of Any Business to Achieve the Goal

If the goal is money, then an action that moves us towards making money is productivity. However, there are three important measurements that express the goal of making money really well. Their names are throughput, inventory and operational expenses.

Throughput is the rate at which the system generates money through more sales. People tend to misunderstand this concept, believing that incomes are generated through production alone. If you produce something but don’t sell the item, it’s not considered a throughput.

The next measurement is inventory. It is all the money that the system has invested in purchasing things that it intends to sell.

Finally, the operational expense is all the money the system spends in order to turn inventory into throughput.

Everything you manage in an organisation is basically covered by these measurements.