“So this is the goal: To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.” – Eliyahu M. Goldratt The Goal: A Process of Ongoing Improvement

The quote highlights the essence of operational excellence as defined by Eliyahu M. Goldratt in his influential work, The Goal: A Process of Ongoing Improvement. Goldratt’s central argument is that true business success comes from the ability not only to increase net profit, but to do so while simultaneously improving return on investment and cash flow—a triad of interdependent financial metrics at the heart of the Theory of Constraints.

Context of the Quote
The quote originates from a pivotal moment in The Goal, where the protagonist, Alex Rogo, faces the imminent closure of his manufacturing plant due to prolonged operational inefficiency and poor financial returns. Lacking clear answers, he reconnects with Jonah, a mentor figure based on Goldratt himself, who challenges Alex to identify the true goal of his business. Through guided inquiry, Alex discovers that the single unifying objective is to “make money”—not in isolation, but in conjunction with those deeper financial levers: net profit, return on investment, and cash flow.

This insight marks a transformation in Alex’s approach. Rather than fixating on isolated metrics or functional silos—such as output rates or inventory turnover—he begins to see the business as a connected system. Through the story, Goldratt demonstrates how only by targeting constraints—the factors that most severely limit an organisation’s progress—can leaders truly improve all three measures simultaneously.

About Eliyahu M. Goldratt
Eliyahu M. Goldratt was an Israeli physicist and business management guru, recognised for his development of the Theory of Constraints (TOC). Trained as a physicist, Goldratt applied scientific reasoning to business problems, helping organisations across industries find practical, systemic solutions to complex operational challenges. Goldratt’s influence extends far beyond TOC; he shaped modern thinking on systems, change management, and continuous improvement. Notably, The Goal, published in 1984, was groundbreaking in its use of narrative fiction to make rigorous industrial management principles accessible and compelling.

Goldratt’s work is characterised by a relentless focus on process improvement, questioning of accepted practices, and rigorous logic. His questions—‘What is the goal? What to change? What to change to? How to cause the change?’—remain central tenets of operational strategy today.

Leading Theorists and Related Thinkers
Goldratt’s contributions sit within a tradition of operational thought shaped by several pioneering theorists:

  • W. Edwards Deming: Father of the quality movement, emphasised continuous process improvement and systems thinking.
  • Taiichi Ohno: Architect of the Toyota Production System, developer of the just-in-time methodology, and proponent of eliminating waste.
  • Peter Drucker: Influential in management by objectives and the concept of the ‘knowledge worker’, establishing purpose-driven strategic management.
  • Eli Goldratt’s Contemporaries and Successors: Many modern practitioners and researchers have built upon Goldratt’s work, adapting TOC to extend into project management (Critical Chain Project Management), supply chain logistics, and service operations.

Context of the Theory
The Goal and the Theory of Constraints marked a significant shift from static efficiency models towards dynamic systems thinking. Rather than optimising parts in isolation, Goldratt argued success relies on identifying and resolving the most critical issues—the constraints—that inescapably govern overall performance. This approach has been widely adopted and adapted within Lean, Six Sigma, and Agile frameworks, reinforcing the need for constant reassessment and ongoing improvement.

Lasting Impact
The novel remains a touchstone for business strategists and operational leaders. Its principles are frequently cited in boardrooms, on factory floors, and in management classrooms worldwide. Most importantly, the core lesson of the quote continues to resonate: sustainable value creation demands a simultaneous, systemic focus on profit, efficiency, and liquidity.

Goldratt’s legacy is a practical philosophy of improvement—always anchored in clear objectives, broad systems awareness, and a deep respect for both human and operational potential.

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