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Clarke Interviews Eli Goldratt

Clarke Interviews Eli Goldratt

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Published by: clarke_ching on Dec 03, 2009
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Clarke Interviews Eli Goldratt about Isn’t It Obvious
(Transcribed by SAW1 11/30/2009)
CC – Clarke Ching, EG– Eli Goldratt 
CC:Hi Eli, it’s Clarke Ching here, I’ve just clicked record, and we’re all go now. Can I justcheck: you’re in Amsterdam today, is that right?EG:Yes.CC:Do you live in Amsterdam?EG:No. First of all, it’s not Amsterdam. It’s Roelofarendsveen. It’s a small village near Schiphol. And no, I’m not living here, but this is my main office. I live in Israel.CC:Ah, right, right. You do live in Israel. I must say, I love Amsterdam but I’ve not been toIsrael… yet!EG:You’ve missed something!CC:I know. I was talking to Eli Schragenheim at one stage, and I zoomed in on Google Earth towhere he was living. It looked like a very nice place. Anyway, let’s get straight to whateveryone wants to hear about, which is your new book. I read it about two or three weeksago, but, just this morning, the actual paper version arrived with the post. It’s called ‘Isn’tIt Obvious?’, it’s by yourself and you have two co-authors – which I might come back tolater. But I wonder if you could perhaps just tell us a bit, or as much as you like, about the book. Why you wrote it.EG:Why I wrote it? You know, sometimes you don’t have a choice. A book is coming, andgrabs you in the throat, and says “Write me!”.CC:Fair enough! I noticed that you touched a little bit on the topic of this: the retail solution in‘The Choice’. ‘Isn’t It Obvious’ is an elaboration of what was in ‘The Choice’, and it looksto me, the way I read it, it’s the distribution solution that you’ve been writing and talkingabout for a long time now, but you’ve written this book from the retailer’s point of view.EG:Correct. As a matter of fact, I do expect, that, if we wrote the book appropriately, everyreader, on the first reading, will be able to distil three main messages, which I hope arequite clear in the book. But, first of all, let’s talk about the title of the book. ‘Isn’t ItObvious?’ is the criterion that every scientist is using in order to know whether or not hereached a good solution. You are working on a problem, you can work on it for years, andthen, one morning, you wake up and say to yourself “Oh, it’s right in front of my nose!How didn’t I pay attention to it. Isn’t it obvious!”. And only then you know that you havefound a good solution. If you don’t have this sensation, suspect that your solution is notgood enough. This is not to be confused with: it was obvious to find it. As a matter of fact,these solutions are the most difficult ones to find, but, once you find them, you
know
thatthey are there. So, basically, the message is: if you agree that it’s obvious, then you know itwill work. At the same time, the real message is: keep on thinking about the solution untilyou reach this level. Only then you know that you reached a good solution.And, as you pointed out, what I’m using in this book is solutions that I’ve been talkingabout for years, and have tried, and I know to what extent it’s working, and this is aPage 1 of 19
 
Clarke Interviews Eli Goldratt about Isn’t It Obvious
(Transcribed by SAW1 11/30/2009)
CC – Clarke Ching, EG– Eli Goldratt 
solution for retail. I’m flabbergasted by the fact that retail still believes that the key is tofind a better way to forecast! And they are spending an enormous amount of money onthese– I’ll call them crystal balls, though today they are disguised as computer programs – to get a better forecast. And this is a huge industry! And nobody is doing even the mostobvious check before they buy another module of forecasting. Let’s just take the past dataof, let’s say, two years ago, load it in the computer, and see what the computer’sforecasting module will tell you about what should have happened a year ago, and check itwith what really happened, just to find out that all these new forecasting modules are as bad as the previous ones. And it’s about time to realize there is no way to accuratelyforecast consumption on an SKU level. It’s theoretically impossible. So the only way out isto reduce dramatically our dependency on forecast. And this is the solution that I have beentalking about for so long in distribution. So what I’ve tried to portray in this book is almostobvious. How clear is this solution, how well it works, and, more than that, that the resultsthat are coming when you implement this solution is not a small improvement and it’s not a10 per cent improvement. It’s really propelling the performance of retail to a new level.The way that I wrote it is a little bit different than what I’ve done in ‘The Goal’, which is,in this book there is no Jonah. In other words, people are learning it from their ownexperiences. There is no smart, wise man who gives a solution. You’re learning thesolution directly from experience, and that’s why I believe that if ‘The Goal’ had theimpact on manufacturing as it was, this book will have an even bigger impact on retailing.An even bigger impact, hopefully. So, one message of the book is a retail solution. Asolution for retail in a way that I hope that people cannot ignore anymore.CC:Actually, if I can just say that I read it and it was one of the clearest, quickest reads I’veever read. I think you’ve succeeded there brilliantly.EG:No, no, no, no! I will not take the credit here. Here the credit
must 
go to the two co-authorsthat I had.CC:Ilan and Joe? Ilan Eshkoli and Joe LeerBrownEG:Ilan and Joe, yes. You see, ‘The Goal’ was so readable not because of me, but because of Jeff Cox. The only problem was that it was – how shall I say it – painful to write it. You’rewriting with a gifted writer, like Jeff Cox is, and after he writes, let’s say, two drafts and hewrites it a third time, and he’s happy with what he has. And then to come and say, “No, it’snot good enough. Here and here it’s not portraying it accurately enough, and here it is not precisely logical, and write it again, and write it again.” And what is happening is you startto fight! And, after we finished writing ‘The Goal’, I said “Never again!”.CC:Really?EG:Oh yes. Never again. It was about 13 months that it took us. The first few months werenice. After that, we were fighting about the problem of rewrite and rewrite. Maybe I’m a perfectionist, but that’s what I am. So I said “I’m not going to work anymore with writers!”So I wrote on my own, but then my problem is that I’m cramming much too much in eachchapter, and that’s why it’s not as readable. So, this time, I decided “Let me try again.”.Page 2 of 19
 
Clarke Interviews Eli Goldratt about Isn’t It Obvious
(Transcribed by SAW1 11/30/2009)
CC – Clarke Ching, EG– Eli Goldratt 
But, I tried something new. Rather than working with professional writers of books, Idecided to try to write with profession writers of TV and movies. That’s what Ilan and Joeare. You see, my assumption was that, in movies, the one who writes the script has tochange it and change it even on the day of the shooting.CC:Yes, Yes of course.EG:So they would have, I hoped, much less inertia to re-write all the time and to polish, andthat’s
exactly
what happened.CC:And that’s probably why the book reads so quickly as well, because that kind of format ismuch quicker by nature, isn’t it?EG:Correct. And, if you notice, for example, there are no pages where anybody is thinking tohimself. Because, if a person thinks for half a page, the camera doesn’t know how to work the shoot. Or, when there is a dialogue, the heroes are moving, so the camera will have tomove!CC:Yes, Actually that does explain something for me, because, when I read this book, I read it just so quickly. I just raced through it, and I was actually at the end of it going, “Wow I gotso much information out of it!” I almost feel robbed that I wasn’t reading it a day or twolater! So they did a very good job in that respect.EG:Very good job. But, at the same time, you have to realize there isn’t a single chapter therethat was not re-written at least five times! There is one chapter that was re-written
 sixteen
times! There were also chapters that went to the basket, even though they were very good, just because they interrupted the smooth rhythm of the book.CC:Yes, yes. I can understand it totally.EG:And here I am really grateful for these two people who were so accommodating, and didn’thave any inertia to re-write it, and re-write it until all three of us felt very good with theoutcome. So the fact that it’s so readable, I would say that all the credit should go to them.CC:Very good. So, you were saying that the retail solution was the first of three points.EG:Yes, correct.CC:And then I interrupted!EG:The other two points are a little bit more subtle. One point that I wanted to bring across – and I think that I’ve already started to do it in ‘The Goal’ and in all my books, but in this book we put so much more emphasis on it – is that in the formal text books, and certainlyin the universities, I think that there is not enough emphasis on the role of the informalsystem. And to what extent the informal system is not just an integral part of running a business, but to what extent it is important in running a business. And I’m talking about thefact that there are relationships between people that allow them to not follow the formulasystem and, because of it, to improve the performance so much. I’m talking about familyPage 3 of 19

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