What if?

by admin on February 5, 2009

in General,Innovation

WARNING – longish blog post with polemic overtones

Yesterday I pondered on the question of how the global recession might be overcome using Umair Haque’s alternative ‘smart growth’ example. Today I see that Mark Lee has a piece entitled Death by Accountancy where he draws on the MFI experience to illustrate how the avoidance of people and skills sowed the seeds of MFI’s destruction. The article he parses from Management Issues makes many good points about the place of learning. But the author’s stinging indictment comes from the way MBAs, highly prized in many businesses,  or rather the teaching they receive and that of accountants must take responsibility:

As we enter the 21st Century, with globalisation, easy access to market information, very high levels of automation and skills requirements, why are we persisting with a business model based on a 19th Century concept of the corporation, using a 15th Century invention (accountancy) as the principal source of business metrics?

Why are we persisting with a business model based on a 19th Century concept of the corporation?

In MBA case studies, demand is described in fatalistic or mechanistic terms, with no reference to the interaction between service staff and the customer. This filters through to the business pages. When MFI went under, the BBC website reported that ‘the downturn in the housing market took its toll on demand for new kitchens and bedrooms. Sales had fallen in recent years due to competition from rivals such as Ikea.’

This is very far from the full story. As well as providing misleading indicators, and hiding the causes of business dynamics, accountancy and MBA-speak also create the lexicon for euphemisms and excuses.

This is not universally true but is widespread enough to give concern. For instance, Andy McAfee at Harvard talks about emergent technologies such as wikis, blogs and so on as mechanisms for providing better access to knowledge and the development of socially driven networks that improve performance. It’s an interesting idea but one for which evidence so far has been thin on the ground.

I sense that where ‘we’ all getting stuck is in the measurement side of the equation and the squaring of technology back to resource management, ie the way we view people and their value in the business.

In 2006, I helped Charlene Li, then of Forrester, to articulate some of the ROI considerations for blogging. It was pretty crude work and even now I’m not sure I was on the right track. At the time, I made the argument that acceptance of these new types of interactions as a way of doing business would demand ROI from the CFO/FD’s office. It’s the way we’ve been taught to think so why not? I’ve come to the conclusion that is right – but wrong.

For as long as numbers dominate the way investment is assessed and calculated, used as a way of determining individual work ‘worth’ and the value of ‘things’ we can’t get away from that paradigm. BUT – we can start to think about the types of measure that will lead to evaluation of human potential, skills addition and so on in the context of the socially connected world. That is way more than simply hoping that a particular social media project will lead to favorable outcomes. Way more. And it’s hard. Even Andy acknowledges:

Emergent is both most intuitive of these three terms and the hardest to pin down. It really does bring to mind Justice Potter Stewart’s famous yet unhelpful definition of obscenity “I know it when I see it.” My best-effort definition of the phenomenon is the appearance over time within a system of higher-level patterns or structure arising from large numbers of unplanned and undirected low-level interactions.

To date, the socially mediated world has been dominated by marketers and PR types who are not used to financial scrutiny. In all honesty, I find most of what’s said to be BS and treat it with disdain. Not because I hate invention or creation but because it is often way too fluffy and without meaning I can parse back to the numbers. There is far too much ‘make me feel good’ and not enough input/output assessment (note I did NOT say determination.) Perhaps I have been wrong. Perhaps what I really should be thinking is about risk.

Marketers are great at dreaming up creative campaigns designed to drive demand. Sometimes successful, sometimes not. From my perch that’s all very well but it does mean that by and large I have little idea what will work and what wont. I want predictability so that I know I’m not wasting money un-necessarily. Unfortunately, none of us have crystal balls so my wish can only remain as such. BUT – the technology we have today can yield extraordinary results at very low cost. That takes a huge amount of risk out of the equation. So on that point – I’m happy. And for proof, I need only look at things like the Blue Monster, or the Stormhoek in West Texas campaign. Now spin back.

What are ‘we’ doing to capture the creative spirit inside our organizations? As far as I can tell, we’ve done little more than deploy blogs etc and hoped for the best. Managements have understood that purpose is a requirement but how well have we purposefully driven those projects? After all, Nielsen’s 1-9-90 inequality rule still seems to hold good, as a Tweeted message from Wordframe confirms:

@dahowlett 1-9-90-not a chance to change soon-absolutely.We prove it for 3 years already. All our reports for different customers show that.

It’s the culture stoopid! Do the people we employ really trust what  management has to say? Is it so tired of toiling under the numbers driven gun that it no longer has the appetite to participate? Are people so fed up of watching management enrich itself disporportionately to the rest, firing staff at will, not for survival but further enrichment that they have turned off altogether? Has Big Brother won?

There’s much to think about yet it almost seems like the answers should be self evident. If we continue on a path where we believe that continued automation and the drive for efficiency that excludes our people is the right road then we’re headed for another bust. If we continue to relegate proper training to a rounding error on the back of de-skilling then what do we have left? But equally, if we allow the mad marketing dogs loose, then we will only compound our problems. We need to make the 1-9-90 rule a falsehood.

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alastair February 5, 2009 at 10:39 am

if youve worked out that an MBA is an academic exercise, and that qualifications are neither necessary nor sufficient to success in business then you have learnt a useful and important lesson – but that does not mean that academia has nothing to contribute, nor that academic skills are not usefull. (double negatives are another matter althgether!)

Dennis Howlett February 5, 2009 at 2:26 pm

You'll find no disagreement with that statement here (I learned a great deal in my uni days) but I wonder whether we've actually been teaching the RIGHT things. That's an altogether different argument.

alastair February 5, 2009 at 4:49 pm

One thing I learnt at university was that it is not about being taught, but rather about learning how to learn for yourself. The UK education system can be criticised on many fronts, but I am not sure many get this – yet to my mind it is one of the most important lessons. The best teachers don't teach, but rather they guide you in the right direction!

Dennis Howlett February 5, 2009 at 4:51 pm

aaaah – my brother is a recently retired teacher and he says the system has moved to the point where students expect to be spoon fed. That doesn't sound good to me.

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