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The Legacy of Eli Goldratt

by David Bulkin on Jul 13, 2011 |

On June 11th 2011, Dr. Eli Goldratt, inventor of the Theory of Constraints (TOC), passed away. Eli’s first, and most famous book was the "The Goal", it defined the TOC. His legacy will continue to indirectly influence the agile by the embodiment of his ideas in techniques we apply every day.

Eli was trained as a physicist, but he had a softer, more human side, as shown in this quote from him.

I smile and start to count on my fingers: One, people are good. Two, every conflict can be removed. Three, every situation, no matter how complex it initially looks, is exceedingly simple. Four, every situation can be substantially improved; even the sky is not the limit. Five, every person can reach a full life. Six, there is always a win-win solution. Shall I continue to count?

David J. Anderson, in his reflections on Eli’s passing, speaks directly to Eli's thought leadership as a new type of capitalist, who believed in effective business performance, without harming the workers.

I will primarily remember Eli Goldratt as a warm, affectionate, kind, loyal, trusting and respectful man who just happened to care deeply about how people worked together while holding a passion for effective performance of businesses. Eli never approved of an improvement that was achieved at the expense of the workers. He could be viewed as a very social capitalist. I believe his leadership in this respect is exemplary and will in future be recognized as visionary and ahead of its time.

In this same post, David explains how Eli’s work, and David’s opportunity to present at the Theory of Constraints International Certification Organization (TOCICO) influenced what is now referred to as Kanban for software development.

The following year I was invited again to TOCICO where I presented the XIT case study as a DBR implementation. This was the foundation of what we now refer to as Kanban (for software development) and it had evolved directly from my experience writing my first book. I was inspired by Eli's "5 Focusing Steps" and the incremental evolutionary approach to change inherent in TOC.

Robin Dymond, also wrote about Eli soon after Eli's death. Robin explains how TOC provides a set of thinking tools that complements Lean and Agile.

As a software development manager who had already transitioned from more traditional management to Scrum and Extreme programming, I found TOC provided another set of thinking tools to analyze a work system. These tools complimented Lean and Agile without reducing their value or conflicting with those ideas. For example Theory of Constraints provides a way to prioritize process changes found using Lean tools or impediments found by the team using Scrum. However the biggest change was that TOC made me think differently. It changed my perspective on systems, on software development and work in general. Like Lean thinking, TOC colors my thinking about any system and gives me greater insight into the natural properties of systems.

As just one example of how TOC influenced agile, Eli invented Throughput Accounting (TA), which is a TOC Financial Measurement System. TA enlightened many in the manufacturing world about effectiveness versus efficiency, and the danger of inventory, as described in the TOC-Lean Institute description of TA.

With conventional Cost Accounting, local efficiencies are all important – but this mind-set only leads to the excess production of inventory, which – as Throughput Accounting clearly demonstrates - does not make money for a business because both making and storing goods costs money and tie up valuable cash flow.

For those in the agile community seeking to learn more about Eli’s work, Kevin Rutherford, an agile coach and eXtreme Prgroammer from the UK, provides a list of his favorite books from Dr. Goldratt.

Eli Goldratt wrote many books, and among them these four stand out as having changed my work (and life, I guess) for the better:
  • The Goal — a novel, about a chap who has three months to save a failing factory. This is where it all began, and the ideas apply to so many different situations in so many different fields. I’d include this in my top 5 books of all time.
  • It’s Not Luck — another novel, and the sequel to The Goal. Provides a basic introduction to the Thinking Tools by showing how to use them in analysing a variety of business problems.
  • The Choice — a manifesto, quoted above. In this book Goldratt takes to the soap-box and presents his manifesto for happiness through logic and clear thinking. I disagree with his logic at one major turning point, but overall the message is good, strong and empowering.
  • The Race — a workbook for learning about flow using the Theory of Constraints. This book is not for the faint-hearted, though thankfully it has no differential equations. Even though I had read and understood The Goal, and applied the ideas in many organisations, The Race taught me some deep new surprises.

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