The facts
Marcel JB Tardif, MBA
CEO - PerformInfo Inc. Auteur, Conférencier, Coach de dirigeants 26 553 abonnés + 3 900 post 560 articles
Flaherty[1] mentions that Peter F. Drucker[2] said: "There are no facts without a criterion of relevance by which to judge them. Events, in themselves, are not facts." Facts" are more than occurrences, incidents or conjunctures. To be anything other than mere accidents, "facts" must satisfy the imperative of "relevance", to cease being subjective claims and become objective confirmations. In other words, "facts" must be intelligibly explained, if they are to have any meaning other than that of a random situation. However, in the corporate world, we very rarely have procedures for evaluating "facts", to confirm them as life values for the productive organization that it is. We tend to add up statistics, which we call "data", as if the quantification of things were the qualification of everything. This explains why we often misunderstand the meaning of activity and business management, just as we generally misunderstand the meaning of the evolution of the company as such.
For its managers, everything in the company looks like a "fact" that determines life in the organization. It's as if operational accounting had to include everything, to situate the progression of the company's being, having, and doing. And yet, it is the "relevance" of the things compared that will situate the company, about the relative state of improvement of its condition or the degree of its regression on its capacities, potentialities, and opportunities for advancement in its market. The typical company equips itself with performance measurement indicators ad nauseam, whereas the principle of the dashboard would dictate that it limits its control to only those elements likely to raise its performance on its mission. A mission (raison d'être) is defined by the optimal utility of its service to the market. And so, instead of arming itself with a host of system output indicators[3], the company should adopt five or six organic system input indicators[4]. Indicators will likely enable the company to correct malfunctions in its production, management, and business evaluation systems quickly[5]. This would provide the company with "criteria" for measuring the "relevance" of its governance and management choices, even before its production system is put into operation.
Adding up "facts" with no "relevance" to the company's future[6] does not make it any smarter, and risks, on the contrary, distract its management from justifying improved ways and means of managing its capacities, potentialities, and opportunities. Because "events" are not "facts" useful for understanding the company, the latter must base its development on "criteria" for intelligifying its modes, methods, and practices of activity and business management, before activating its production.[7]?????
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[1] ??Flaherty, J.E., (1999), Shaping the Managerial Mind: How the World's Foremost Management Thinker Crafted the Essentials of Business Success, Jossey-Bass, p. 362.
[2] ??Drucker, P. F., (1973), Management: Tasks, Responsibilities, Practices, Harper-Collins, p. 480.
[3] ??Relating to production or economic units linked to the company's day-to-day operations.
[4]?? Unproductivity is apprehended within the framework of organization, management and evaluation of the company's capacities, potentialities and opportunities for activity or business, due to the very lack of management modes, methods and practices in force within the company. (Apprehended, because they are less efficient than the models developed by research in the field and already circulating in the company's sector of activity or business.)
[5]?? Before the flaws in the company's management system are carried over from one stage of the activity or business flow to the next. In short, to prevent problems from becoming more serious as they move down the company's value chain. The more serious the shortcomings of the company's management system at the start of the production cycle, the greater the damage at the end of the cycle, in terms of products that fail to compete in the marketplace.
[6]?? According to Drucker, "developing laws (precepts) based on controllable and repeatable experience makes no sense, when the decision-making process takes place in a future business environment where there are only expectations and no facts".? Flaherty, p. 381.
[7]?? The Japanese question at length the merits of their choice of operating option, before adopting new modes, methods, and practices of activity and business. The Americans quickly launch their production apparatus and question its performance once the value chain is complete. In short, the former avoid spending unnecessarily by correcting what already doesn't fit with the results of independent research, while the latter spend to try to recover after evaluating the rendering of their company's activity and business. The difference lies not only in the timing of the evaluation of the company's performance and business. It lies in the intelligence of proceeding, in ignorance of what would already require a change of attitude in terms of management modes, methods, and practices, to spare oneself the harmful effects of the company's dysfunctions on the customer before corrective action is taken on the faulty systems involved in their occurrence. In other words, Japanese-style upstream management, rather than American-style downstream management!