The Goal – Chapter 11 – Dependent Events & Statistical Fluctuations

Chapter 11 starts with a rushed packing at home and a speedy trip to visit with Jonah at a NY Hotel.  In my first reading of The Goal, this was my eye opening chapter, because it highlights two concepts I hadn’t previously fully understood:

  • Dependent events.
  • Statistical fluctuation.

Highlight

“The big deal occurs when dependent events are in combination with another phenomenon called ‘statistical fluctuations,’ ” he says.

For every process, mapping out dependent events is vital to understanding what possible scenarios will play out.  There is an optimal yield – if everything goes perfect.  There is a bad yield – if everything goes wrong.  Most processes benefit from knowing what the optimal yield might be if things are perfect.  Understanding the sequence of events helps people at each step understand their role in supporting the organization’s goal.

Page by Page

P080 – “I’ve got a lot of problems to solve.”  Lots of problems typically require a team, Rogo is functioning as an individual, not as a leader.

P081 – “Well, thanks, but I’m afraid I need more than a goal and some measurements to save my plant.”

P082 – “Just pay me the value of what you learn from me.”  Jonah here shows the value of incentive alignment.

“Three months is more than enough time to show improvement . . . if you are diligent, that is. And if you aren’t, then nothing I say could save you anyway.”  Crossing over business books – Jonah is highlighting Getting to Yes‘s use of a BATNA – Best Alternative To a Negotiated Agreement.

P083 – “We absolutely have to keep them productive.”  What is the point of keeping the robots productive if it is costing you the plant?  The robot decision pre-dates Alex, that cost is sunk.  Don’t set yourself on fire to keep the other person warm.

“If your efficiencies are so good, then why is your plant in trouble?”

This common sense question that highlights conflicting realities often helps a lot in clarifying what is going on.  “If X is true, then just do Y!”  This rhetorical method often helps highlight the need for change.

P084 – “Most of the time, your struggle for high efficiencies is taking you in the opposite direction of your goal.”  The goal of high efficiency conflicts with the goal of profit maximization.

P085 – “But I am suggesting that you question how you are managing the capacity of your plant.”

P086 – “Why do you think it is that nobody after all this time and effort has ever succeeded in running a balanced plant?”

Some things are impossible.  It is better to accept reality than it is to target something that cannot happen.

P087 – “The big deal occurs when dependent events are in combination with another phenomenon called ‘statistical fluctuations,’ ” he says. “Do you know what those are?”

Dependent events = sequence matters.

P088 – “These types of information vary from one instance to the next. They are subject to statistical fluctuations.”

Major concepts:

  • Dependent events
  • Statistical fluctuations

P089 – “You have to gain the understanding for yourself in order to make the rules work,” he says.

About flybrand1976

Find me on twitter @flybrand.
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One Response to The Goal – Chapter 11 – Dependent Events & Statistical Fluctuations

  1. Pingback: The Goal – Chapter 17 | Fred Lybrand

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