What is the goal?


In his book The Goal, Eliyah Goldratt describes how a typical factory has goals such as “be more efficient”, “lower costs”, and “work harder”.

These goals are wrong.

The true goal of a factory is making money.

Using Socratic questioning, Goldratt shows that the best way to achieve this goal is focusing on bottlenecks that limit production. For example, let’s say a factory’s bottleneck is a machine that produces a maximum of 100 parts/hour. If the rest of the factory produces 200 parts/hour, it doesn’t matter. Total production is constrained by the bottleneck machine. Running the other machines at 200 parts/hour just causes extra parts to pile up.

Beyond factories, Goldratt’s “Theory of Constraints” provides a system for improving your life:

  • Identify the true goal

  • Identify bottlenecks

  • Fix them

For example, let’s say your true goal is financial freedom. The bottleneck is your salary. Fix it by creating a second income from a side business.

Being open-minded is far more important than being bright or smart—because open-minded people understand what they don’t know, and are willing to look outside themselves and draw on a wide variety of thinkers for answers.

-Ray Dalio

Socratic questioning

Socrates was a Greek philosopher who lived from 470 to 399 BC. When Plato and his other students asked questions, he replied with questions that made them think. By drawing out answers, he taught students to think for themselves.

Examples:

  • Help me understand your question?

  • What exactly do you mean?

  • You seem to be assuming…?

  • What evidence supports that assumption?

  • What are the implications of that assumption?

  • What would disprove that assumption?

  • Why do you think I asked this question?

When Charlie [Munger] thinks about things, he starts by inverting. To understand how to be happy in life, Charlie will study how to make life miserable; to examine how businesses become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. His way of thinking comes from the saying in the farmer’s philosophy: I want to know where I’m going to die, so I will never go there.

-Li Lu

Personal notes

When someone asks me for advice, I usually reply, “What is your goal? What are you trying to achieve?” Then I ask Socratic questions to see if it’s the true goal.

Knowing the answers will help you in school. Knowing how to question will help you in life.

-Warren Berger


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