Reading the same book again, after many years, is like meeting an old friend. Rereading The goal, by Eliyahu Goldratt was like a nice get together that brought back good memories. But,  I was most struck by how I now fundamentally disagree with my old friend.

In the book “The goal” is defined as “making money”. Even when considering that this was about the goal for a manufacturing plant and its manager that is fundamentally wrong.

What happens when making money really is set as the goal? Whoever does so will become short term focused. Simply because of the time value of money: money now is better than that same amount of money some moment in the future. Thus making money as the goal leads to:

  • No business start up (unless it would start making money from its very start… indeed a never seen situation).
  • Business would be terminated way sooner than happens now (each time as soon as liquidation value is higher than continuation value).
  • The goal followers would be not exchanging any goods, since money would have a higher value than a good with an equivalent value (otherwise there would be a contradiction in making money being the goal).

(Making) Money is never a goal

At the risk of becoming too philosophical: money is never a goal. By definition it can not be a goal: Money is any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another. So, by definition money is a means to a goal. Not a goal. For a real life, be it a bit morbid, test: ever heard of anybody on his/her deathbed saying: “I whish I had made more money!”? Or: “I have had a meaningful life because I made so much money!”?

So, if Making money is not the (long term) goal… what is? Read my next blog 🙂

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