The Goal 2 is a sequel to the book The Goal by Eliayu M. Goldratt. Goal talks about Theory Of Constraints. Goal 2 talks about a concept called "Thinking Process". The protagonist Alex Rogo is now EVP in UniCo managing three newly acquired businesses. A printing company, cosmetics company and a pressure-steam company. The book starts with the board of UniCo deciding to sell off Alex's 3 business and wanting him to turn around the struggling companies to fetch a better sale price.
Over the course, all the 3 divisions make a turn around after analysing the current situation and identifying what the market wants. The printing company positions itself to give a better price per usable unit thereby cutting costs and reducing unwanted orders from the customers, creating value. The cosmetics company makes a turnaround by acquiring good shelf presence in return of reduced ticket sizes and frequent deliveries to the customers (shops) thereby reducing the financial burden of customers. The pressure-steam, instead of selling the unit and spare parts, starts selling the pressure steam itself, thereby converting the capex of customer to opex.
The author introduces a negotiation technique involving visual articulation of common objectives and conflicting premises, which would help breaking the conflict. The Thinking Process involves the construction of Current Reality Tree, Transition Tree and Future Reality Tree.
The Current Reality Tree is the wholesome flowchart of UDEs (UnDesired Effects - shortcomings) for a given objective, as of now. This connects all the UDEs from one to another. The premise is that all the UDEs are the experienced pain points which arise from majorly one or two main causes - the idea is to find such a cause.
The Future Reality Tree is built from the current reality tree, with an end objective in mind and creating possible paths for the same. The paths will have negative branches for which a resolution is sought after. For example increasing sales is a path; reducing price (and thereby creating price war) is a negative branch which needs to be addressed.
The book emphasizes on the point that the product is not simply the physical product. The product is the wholesome unit including the physical product, packaging, service, delivery along with the financial terms which the customer would value. It proposes to create a competitive advantage, especially sustainable competitive advantage, kind of a moat, which the competitors would find difficult to catch up.
Advocates one of the known but often overlooked idea. The price of the product is not the cost plus markup, it depends on what the value that the product brings to the customer. Or is equivalent to the value of the pain that the product or service offers to remove.
Towards the closing chapters, there is a significant talk on what makes a good strategy - an organisation needs to uphold the values of 3 key people - shareholders, employees and the customers. Any idea which propagates to benefit one group at the expense of other is not a long term sustainable one.
Enjoyable read - this is one of the 2 novels that I read in 2016.
Over the course, all the 3 divisions make a turn around after analysing the current situation and identifying what the market wants. The printing company positions itself to give a better price per usable unit thereby cutting costs and reducing unwanted orders from the customers, creating value. The cosmetics company makes a turnaround by acquiring good shelf presence in return of reduced ticket sizes and frequent deliveries to the customers (shops) thereby reducing the financial burden of customers. The pressure-steam, instead of selling the unit and spare parts, starts selling the pressure steam itself, thereby converting the capex of customer to opex.
The author introduces a negotiation technique involving visual articulation of common objectives and conflicting premises, which would help breaking the conflict. The Thinking Process involves the construction of Current Reality Tree, Transition Tree and Future Reality Tree.
The Current Reality Tree is the wholesome flowchart of UDEs (UnDesired Effects - shortcomings) for a given objective, as of now. This connects all the UDEs from one to another. The premise is that all the UDEs are the experienced pain points which arise from majorly one or two main causes - the idea is to find such a cause.
The Future Reality Tree is built from the current reality tree, with an end objective in mind and creating possible paths for the same. The paths will have negative branches for which a resolution is sought after. For example increasing sales is a path; reducing price (and thereby creating price war) is a negative branch which needs to be addressed.
The book emphasizes on the point that the product is not simply the physical product. The product is the wholesome unit including the physical product, packaging, service, delivery along with the financial terms which the customer would value. It proposes to create a competitive advantage, especially sustainable competitive advantage, kind of a moat, which the competitors would find difficult to catch up.
Advocates one of the known but often overlooked idea. The price of the product is not the cost plus markup, it depends on what the value that the product brings to the customer. Or is equivalent to the value of the pain that the product or service offers to remove.
Towards the closing chapters, there is a significant talk on what makes a good strategy - an organisation needs to uphold the values of 3 key people - shareholders, employees and the customers. Any idea which propagates to benefit one group at the expense of other is not a long term sustainable one.
Enjoyable read - this is one of the 2 novels that I read in 2016.
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