In physics, velocity is a simple equation: speed + direction = velocity. AGI-Goldratt Institute’s new book, Velocity, takes that simple equation and applies it to business: operational speed + strategic direction = immediate gains. But where to apply such a simple equation is often the problem. When seeking improvement, should an organization improve everything? Or concentrate its efforts in one direction? If not improving everything, then what does an organization choose as its focus? Velocity endeavors to answer these questions.

You may be familiar with the name of the AGI-Goldratt Institute because its founder Eliyahu Goldratt is the author of the bestselling business novel from 1984, The Goal. Velocity is also a business novel, and its set up is similar to that of The Goal, which centers around a new plant manager who is tasked with improving productivity of his unit. Applying principles he learns from his “guru” (a common feature in business novels and fables), a physicist named Jonah, the plant manager learns the proper metrics for which to judge productivity and introduces Goldratt’s Theory of Constraints (TOC) which is a way of looking at a process as a physical entity in order to determine the bottleneck that is slowing production.

This novel adds TOC with two other well-known continuous improvement systems—Lean and Six Sigma. The authors explain: “Velocity—as a concept—is the means by which the organization orchestrates all of its resources, as well as all three improvement disciplines, and achieves both speed and direction toward its strategic goals.” In the story, the main character is Amy Cieolara, a high performing head of the sales and marketing division of Hi-T, a manufacturing company that has been bought out by a larger company that prides itself on using a Lean Six Sigma (LSS) approach to their operations. In the chaos that inevitably happens as a result of this change of leadership, Amy is made interim president of Hi-T based solely on her good record, not on her experience. Through the course of the book, Amy gets a crash course in lean manufacturing and Six Sigma quality principles from Wayne Reese, the new vice president of operations, an LSS expert. Not to give away too much, but the approach works quickly once Amy gets a team in place and a strategy set, and Hi-T’s “improved operations had pleased the customers, and pleasant customers had re-energized the sales force, who in turn had delivered more sales.”

Velocity is really about the three main continuous improvement methodologies, working together, that can be applied and sustained no matter what changes take place in a company, including staffing and leadership, or in current market conditions. The benefit of reading this information in business novel form is that readers learn the theories and problems through real world scenarios—not just academic conjecturing. By bringing real human emotions, including the fear of change and new responsibilities, to the application of LSS and TOC, Velocity inspires rather than intimidates. And when it comes to change and the demand for improvement, particularly in an economy such as ours, making improvements manageable is really the first step toward success.

We recently named Andrew Ross Sorkin’s Too Big Too Fail the best business book of 2009. It is an engrossing narrative account of the lead up to, and actors involved in, the creation and handling of the recent economic upheaval. It is a great work of journalistic reportage, and an important documentation of the events. Joseph E. Stiglitz has now weighed in on the crisis, which he and many others are calling the Great Recession, from another perspective—an economist’s—in his new book, Freefall.

There are a lot of strong opinions in Freefall, and though you may not agree with all of them, Stiglitz’s sober and concise evaluation of the forces that brought upon the Great Recession and the current situation is hard to argue with. It is also hard to stomach at times, as you come to realize how unnecessary the crisis was. Not only was it a decidedly man-made disaster, many educated and experienced persons—including the author—foresaw and warned against its likelihood for years before it hit. It was not something that “just happened.”

There are bad outcomes that are the fault of no single individual. But this crisis was the result of actions, decisions, and argument by those in the financial sector. The system that failed us so miserably didn’t just happen. It was created. Indeed, many worked hard—and spent good money—to ensure it took the shape that it did.

Working in government and as the chief economist at the World Bank, Stiglitz saw that system take shape and uses much of the book to explain how it came to be, how it fell and the response to its failure in great detail. It is not only about addressing the past and what went wrong, though; it is about finding a way forward. As Stiglitz writes:

It is said that a near-death experience forces one to reevaluate priorities and values. The global economy has just had a near-death experience.

He later sums up:

We have seen the danger. The question is … Will we seize the opportunity to create a new financial system that will create meaningful jobs, decent work for all those that want it … in which each individual is able to fulfill his aspirations and live up to his potential? … These are the opportunities. The real danger now is that we will not seize them.

Freefall is a great addition to a building canon of work on the Great Recession that will surely be studied by economists and historians for a long time to come. We can only hope that the contemporary leadership on Wall Street and Capitol Hill takes notice of these great books as well.