A few years ago, I interviewed one of my author heroes, Gene Kim. Gene is the father of DevOps (or I think he is), and he’s the author of The Phoenix Project, which is such a fun, fast read that’s relatable on many fronts.
Before we hit record, we were talking about Goldratt and his books. Both of us have a deep admiration and respect for him and his writing. I confessed to Gene that I never liked The Race. I thought the book was a mess and should have been a workshop, not a book. Perhaps that was the intent after he wrote The Goal.
I was embarrassed to say that to Gene, thinking there was something wrong with me. Gene stared at me and smiled. “Mark, same here.”
Maybe this pea-sized financial mind isn’t losing it after all. However, some of the concepts in The Race are foundational to throughput, TOC, and bottlenecks.
Regarding (financial) throughput, Goldratt provided a definition that I understand and grasp, but I still believe the terminology leads to confusion for the financial analyst and the entrepreneurial controller. And if that’s the case, the leadership team will get confused too.
In this brief article, I will 1) revisit the what and why of (financial) throughput, 2) explain why the terminology is confusing, and 3) offer two replacement terms consistent with your current financial vocabulary.
As a bonus, I’ll remind every small business analytics team why they should be adopting Throughput Planning, Reporting, and Analysis in their organizations.
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