It's Not Luck - Eliyahu M. Goldratt [93]
But most importantly, nothing should be allowed to distract me from doing it.
27
This was an excellent day. A week ago, the morning after Bob, Susan and Jeff presented their solution to me, I suggested to Brandon Trumann and Jim Doughty that I come to New York to update them. We met in Brandon’s offices, on one of the top floors of the twin towers.
What a sight. All the world is at your feet. On the other hand, it’s a long fall from here.
One of my objectives for this meeting was to gain time for Stacey. I had to convince them that we do have a realistic chance to develop a marketing breakthrough solution for Pressure-Steam. To accomplish this, I decided to start by bringing them up-to-date on Bob’s solution. My assumption was that it would be enough to show that this solution was not the result of an ingenious intuitive flash, but rather the result of meticulously following the generic process that Don and I had constructed. The Future Reality Tree of how one should go about developing a competitive edge. They were already familiar with that tree.
I gave them a copy of the client’s UDE list that Bob, Jeff and Susan put together. Brandon and Jim examined the list, no surprises there. Then we read the Current Reality Tree that was built from this list. Brandon commented that to construct this Current Reality Tree is child’s play compared to the one we built together. Jim agreed.
Once we finished reading the Current Reality Tree, they didn’t have any difficulty translating the core problem into the natural solution. The cloud was almost redundant. And then we went over the Future Reality Tree. That was important. It convinced them that the solution will be very attractive to the shops.
Of course they raised negative branches, lots of them. That was the fun part. They couldn’t come up with any negative branch that Bob’s group hadn’t already analyzed in depth. So, in response to each reservation they raised, I simply handed them the appropriate page, showing which injection Bob came up with, and how it not only trims the negative, but leads to more positives. It was great.
When they had exhausted all their reservations, they started to raise a long list of implementation concerns. I was well prepared. Bob’s team had given me all the ammunition I needed. Trumann and Doughty were impressed. No, not just impressed, they totally bought in. Frankly, only when I had finished explaining it all to them did I realize to what extent Bob’s solution is really powerful.
And my plan worked. Brandon said that he is now a believer in the Thinking Processes. Jim even asked if I can take the time to teach them how to become masters in using Jonah’s techniques.
Then I played my trump card. I suggested that we do the calculation of how much cash Bob’s company will generate in the next four months. They couldn’t believe their eyes; they checked the numbers over and over again. But there it was. Under the most severe assumptions, shortening the collection time on the receivables will bring in more cash than what we hoped to get from the sale of the company. You can imagine that I didn’t have any problem convincing them that it would not be a wise move to sell the company before we get the cash.
I was ready to move to my next step. I knew that I couldn’t simply ask for a delay for Stacey. They need to start having results, and results for Trumann and Doughty means more cash for UniCo. A lot of cash.
I suggested estimating the future annual profits of I Cosmetics. I wanted them to see the magnitude of the numbers. When we finished the calculation it came out that implementing Bob’s solution will bring I Cosmetics to a profit of eighteen percent on net sales. Not on the current sales, but on the increased sales. This means approximately thirty-seven million dollars net profit a year. Not bad for a company that just a week ago we were willing to sell for less than thirty million.
The return on net assets, when you take the crazy way we use to determine net assets on our balance sheet, comes out to be almost