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An Ode to Speed: Why a focus on cost makes organizations weaker, less profitable, and less competitive

Note:An Ode to Speedis a MINI-BOOK. But while it’s mini in dimensions, it’s mighty in impact!An Ode to Speedintroduces a new approach to management decision-making and argues that, by default, we should be optimizing our organizations for speed and not for cost (or efficiency).Most managers appreciate the value of speed but lack the means or the mandate required to use speed as the basis for day-to-day management decisions.This book changes that.Here are the opening paragraphs.Why a focus on cost makes organizations weaker, less profitable, and less competitive(A viable alternative based on Goldratt’s Theory of Constraints)Imagine you were to take over the management of a Formula One team, and rather than focusing on the car's speed, you focused on reducing fuel consumption.That would be stupid, right? Idiotic, even!But this is the orthodox approach to business management. Not surprisingly, the result is that almost every business is weaker, less profitable, and less competitive than it could be.If yours happens to be one of these businesses, your only saving grace is that your competitors have likely adopted the same management approach.It’s not that managers are unaware of the importance of speed. There are certainly speed-based metrics (on-time delivery performance, inventory turns, and debtors’ days, for example). The problem is that these are exceptions, not the rule. The default focus is cost.This book explains why a focus on cost minimization is harmful to both the profitability and the growth of businesses. It then describes how you can (and why you should) shift your focus to the maximization of speed.The ideas presented here are derived from Eliyahu Goldratt’sTheory of Constraints. If you’ve ever read his best-selling book(The Goal),much of the reasoning here will be familiar.Read more

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