The Hindu Business Line : ‘Management science still in its infancy’

Eliyahu Goldratt, on a visit to India, expounds on the evolution of management, its parallels with science, and organisational growth, in his inimitable style.

Bijoy Ghosh

In top form: Eliyahu Goldratt, the Israeli physicist-turned-business consultant, addressing students of the Great Lakes Institute of Management in Chennai recently.

Vinay Kamath

Eliyahu Goldratt, Israeli physicist-turned-business consultant, and among the world’s top ones at that, began his lecture in dramatic fashion. Deep inside the IIT Madras campus, Goldratt, with a skull cap strode around the large auditorium, a mike clipped to his shirt, and began by saying that like all Israeli men, he was drafted into the Army, saw three wars, and, was actually a killer by profession — management consultant was just a garb!

He had his audience, mostly students of the Great Lakes Institute of Management, Chennai, to whom he was delivering a special lecture, with him then. “Management science is in its infancy,” he says, “we just got started”. The movement from soft science to hard sciences has already happened in physics and chemistry and now it is management’s turn.

Management deals with people and as in the sciences, which are subject to cause and effect, so are people subject to conditions or chaos. “Conditions impact the behaviour of people,” says Goldratt. People resist change and the bigger the change, the bigger the resistance. “If change is good, they accept and if bad, they resist it,” he continues. The point he emphasises is that organisations need to address every sub-group in the set-up so that it is a win-win for everyone and they can be carried together.

Businesses are like any other system. Every system has at least one bottleneck which constrains or puts a cap on the overall output. When systems have more than one bottleneck, it is called ‘chaos’. Normally, most systems have one and only one bottleneck, and by focusing on removing this bottleneck the through-put of the system can be increased, he explained.

Touching upon organisational growth, Goldratt, the originator of the Theory of Constraints, says companies should not look for continuous incremental growth, which may well be possible with the world economy and consumption growing. However, managements can lose control with speedy growth.

“You want stability too. Growth becomes less important than stability; we have to give people changes slowly,” says Goldratt, again alluding to the people factor in organisations.

“You need collaboration of its people; it’s the only way to improve a company — can you ignore that? You need a win-win for every sub-group which will ensure exponential growth for a company,” he elaborates, gesticulating all the time. Sequencing an organisation’s growth too is important, he emphasises. Goldratt dwelt on the viable vision that organisations need to have. People as well as organisations need to have a “meaningful and full life”. One needs to come across a meaningful opportunity and convert that into successes. “Good luck is when opportunity meets preparation, while bad luck is when lack of preparation meets reality,” he says.

He had a word of advice for the students. Finding the obvious can be complex, but once found, it can be so simple. So, “always use your brains,” he exhorted the students.

Once done, Goldratt was out of the hall in a jiffy to smoke his pipe!