Management Essentials

To manage a business a manager must control the outcomes of daily activities so that the goal of the business is achieved now and in the future. To most of you I am sure this probably sounds like a statement affirming the value of motherhood and apple pie. With all that has been written on management why another article? What can one more article add?

It is said that once we understand something, it can be described in just a paragraph or two. If this is true then we certainly do not yet understand management! Rather than paragraphs, we have many tomes written on the subject. The authors of these various books, while agreeing on many things, differ on many others. So the debate continues, but managers need practical answers today. They cannot wait until the topic is fully understood. They are responsible to act now, but while action is necessary, it is not by itself sufficient!

As one who holds both a bachelors and masters degrees in the subject, has practiced it for several years in organizations both large and small, and has taught it for over ten years at the post-secondary level, I can attest to the breadth of the topics encompassed by management. The breadth alone ensures that it would take several volumes just to introduce the subject. It would require a library to adequately cover the entire field of management, so this article can not be a definitive work on management.

So what is it? I will present certain ideas, to lay a foundation for a better understanding of the fundamentals of this subject. One cannot build a large edifice on a poor foundations for it will surely topple if we do. I do believe that we have adequate knowledge to properly manage any of the various organizations in our society today. However, I also believe that the breadth and depth of knowledge available to us today has obscured the issue of what is essential for managers to do. Because of this managers stumble, and they lose focus.

If the activities managers focus on do not move the business closer to their goal, then those activities, no matter how well meaning, are not contributing to the success of the business, rather they are contributing to its demise. If the actions are not contributing then the manager too is unfocussed. It is all about how a manger uses his time.

Mintzberg in his seminal study on How Managers Spend their Time commented as follows.

    "A manager's work is characterized by the brevity of individual tasks, the unrelenting pace of activity, and the understanding that their work is never done. In an organizations where time management is paramount, how managers use their time is critical!"

We all know that a manage's job is never done, but how they approach the task can be quite revealing. Most of us are familiar with organizations which demand that their managers spend many hours toiling to make the business successful. Most of us are also aware that some businesses require only an eight or nine hour day from their employees and then want them out of the office. In other words time is also obviously not sufficient for success.

The textbooks say 'to manage is to monitor and control a system so it yields the desired results'. This requires that we first identify and understand the system which is our organization. Second we must understand how to manage that system. That implies we must know how to change the system to produce desired results while preventing undesireable outcomes.

Of necessity we must also be clear as to the goal of the system. This is not a trivial matter as anyone will understand when they read the literature on goals and goal seeking. All too often managers seem to lose focus and even forget what the goal of an economic system must be. This also happens if the activities managers undertake moves us farther from the goal rather than nearer to the goal. Determining whther an action will move us closer to our goal before we take the action is not a trivial matter!

I would argue that many managers do not adequately understand the system they are supposed to control. They do not understand how to change their system so as to create intended outcomes without undesireable outcomes. Many do not even understand what their goal should be. This article will show you how to remedy these devastating yet essential components.

So how do we accomplish these things. It requires the mastery of a set of thinking processes for controlling systems. The three steps of the process are:

  1. What to change.
  2. What to change to.
  3. How to cause the change.
These three steps allow us to figure out what to do and how to do it without guesswork and without risk. We will go into more details as to exactly how this can be done later in this article.

A. Systems

A system is an interdependent set of parts that function as a whole. The fundamental principle of a system is that it operates as an entity! Too often in the past we have succumbed to thinking that we can understand a system by analyzingf its component parts. Such an analysis can be a useful first step to understanding the system, but if we only perform an analysis of the system components we neglect the critical aspect of the system itself and how it functions as a single entity! We must understand the components in their context, that is how they function within the system. There are two tools that can particularly help us to do this. They are the Current Reality Tree and the Evaporating Cloud. These are two of the thinking processes which are described later on. They are tools designed for understanding complex systems.

Simple Systems

In simple systems there are only a few components, and they are readily understood. Control of simple systems is straightforward because there is only one independent variable. Control that variable and you control the system. For example consider the system we use to heat and cool our homes and businesses. We measure the temperature with a thermometer. We set upper and lower values for the current temperature of the system. The heating and air conditioning subsystems are then started and stopped as necessary to maintain the current temperature within the specified bounds. There is only one variable that needs to be controlled and that is the current temperature.

Complex Systems

What is not so well understood is that complex systems are also fairly easy to understand and control. However, because complex systems have several variables they appear to be much harder to understand than they actually are. This difficulty in understanding complex systems arises because of the larger number of variables and because they each interact with one another. When confronted with this complexity, the larger number of components and the interrelatedness, most people throw up their hands in despair and walk away. They think that if it is that hard to understand and therefore it must be impossible to control.

This is where the research done in the Theory of Constraints field becomes absolutely invaluable. Theory of Constraints asserts that the basic principle of complex systems is that the component parts are so interdependent that the system can be controlled by identifying the constraints in the system that causes most of the effects. Indeed, in complex systems, there are only one or two constraints that cause all of the complexity which we see! In other words the complexity is more apparent that real! This is not as far fetched as we might at first think. Weather patterns are considered to be one of the most complex systems which we try to understand. Current thinking indicates that the patterns created can be understood by using Chaos Theory. In other words there is an underlying order that is behind the apparent complexity of what we call weather. Similarly in complex systems there is a root cause for most of the effects we see. If we pinpoint the root cause, then we can change the system and thus change the manifested effects.

While the idea that a complex system is controllable by only one cause seems counter intuitive, there are now many people who have learned from their own experience that it is correct and that we can control these comple systems as easily as we control simple systems. The analysis does take longer and the planning for the new system also takes longer. But it can be done reationally and without guesswork. So what does this require?

B. Goals

A major part of all systems is that they are goal driven. If fact, they cannot operate without a goal. The nature of the goal must not be taken for granted and means/ends inversions are all too common. Goals are set within the system by internal processes but can be significantly influenced by external forces. To be effective goals must of course meet the usual criteria. They must be specific, measurable, challenging yet attainable, time dimensioned, widely shared by a critical mass of all subsystems and the goal must not be dependent upon external parties. The system must have access to adequate resources necessary to attain the goal. There must also be a shared consensus as to how to achieve the goal.

This makes the establishment of goals seem both complex and time consuming. In reality the goal of a financial organization is very simple. It is and must be to make money now as well as in the future. Most of the rest of what we do in goal setting for organizations has to do with how we expect to accomplish the goal rather than what the goal itself is.

What is less well understood is that for any goal there are also attendant necessary conditions. If a condition is necessary then the goal cannot be achieved if the condition is violated. For a business the goal is to make money - a profit. However, no business can make money now and in the future if they fail to satisfy the market place e.g. offer a quality product, or if they fail to create employment satisfaction e.g. no workforce will work for them. Thus we can say the goal is to make money but in order to do this there are two necessary conditions: a satisfied workforce and a satisfied marketplace. Actually any of these three could be the goal but historically the goal is to make money. The other two items are necessary conditions!

C. Thinking Processes

So far we have discussed two prerequisites for successful management. We must be able to understand and manipulate the system and we must understand our goal and its necessary conditions. These must be present or the system cannot be managed so as to attain the goal. These two prerequisites are necessary but not sufficient. To be sufficient there must be one more prerequisite. This prerequisite is the thinking skills necessary to understand the system and know-how to change the system so as to attain the goal. These thinking skill are best understood by showing how they relate to the three step process mentioned above.

  1. What to change.
    If we change the wrong thing we will move away from instead of towards our goal. When this happens, at worst we move away from the goal, we lose money, at best wedo nothing except waste time. Looking at the number of possible changes alone, most changes that can be made will cause one of these to happen. When we factor in Murphy and other forces such as common practice most changes that might actually be made are almost guaranteed to move us away from our goal. The thinking skills which enable us to know what to change are the Current Reality Treewhich helps us understand the existing system and the Eaporating Cloud which helps us understand what the problem is.
  2. What to change to.
    Once we know what needs to be changed, we must still decide what to change to or we will again usually change to something which will move the system away from our goal rather than toward it.The thinking skill which enables us to know what to change to is the Future Reality Tree. This tool enables us to understand what the desired system must be and then how to create it without the oft encountered undesireable effects.
  3. How to cause the change.
    Change is probably the most traumatic experience to which people are subjected. Most of us resist change. Some resistance is for good reasons, and some of it seems to be just for the heck of it. Change usually threatens the current vested interests. Experience has shown that changes that are made are usually made without a complete understanding of the effects that will be caused by the change. Most of the change introduced by human agents does not produce the stated or intended effects and even when it does there are often side effects which reduce or dilute the intended effect. So we must plan our change in such a way as to eliminate resistance to our change and to ensure that we transition smoothly to our new system. This requires that we know what we are doing and have discovered what the possible pitfalls of our actions are. Only then can we plan actions to avoid these pitfalls and reasonable assure our system participants that what we propose to do will not cause undesireable effects that have not been anticipated and prevented. The thinking skills which allow us to successfully cause the change are the Transition Tree for planning the transition to the new syste,and the Negative Branch Reservations which allows us to foresee possible negative consequences of outr actions and act to prevent them..
In the past management has been learned by experience. This is another way of saying that we watched for people who demonstrated, by their actions, that they first understand the system, second understood the goal for the system, and third demonstrated that they knew what to change, what to change to and how to accomplish the change. At first we left people to figure all this out for themselves. Management was an Art and it was only learned by attentive student. Then with a burgroning need we tried to systematize it and teach it. So far this approach has met with limited sucess. These thinking skills can change the current state of management practice so almost anyone can learn to manage everything from a business to their lives. They will in the long term become the essential core skill for managing our businesses and our lives!

The very fact that a person can successfully fight the fires in an organization, demonstrates that they have sufficient intuition to understand the system. Unfortunately when using intuition it is often incomplete and poorly verbalized. The result is that people thrash around rather than moving quickly to solve problems. It is one thing to feel ones way through this provess but it is quite another to lead a group through it and get them to follow you. The above three steps and the five thinking processes make this process much easier to accomplish.

Today we have made these processes explicit! Moreover exposed the underlying skills to take these process out of the realm of intuition and move them into the realm of explicit. This does not mean we can do without intuition, we need it as much as ever. The method does however give us a better handle on how to understand , verbalize and control the process. The process itself has already been listed above, but we also need to specify the skills which are necessary to each step to be able to do this. These skills are thinking processes. They have been known by some for many centuries although they may not have been labelled in the way we now label them. These are the processes behind scientific thought and explorations. These thinking processes are indispensible for accomplishing this three step process. They allow us to understand what to change, what to change to, and how to change without making the process of moving through these three steps a political process which is then usually subject to compromise. The thinking skills are:

  1. Current Reality Tree - a visual representation which links causes and effects in a diagram. The diagram represents the complex system and shows how the effects interact with each other. There is always one, sometimes two root causes of all the other effects.
  2. Evaprating Cloud - a visual representation of a complex problem. It illustrates why the problem is complex. It is complex because it appears to require two necessary but conflicting conditions.
  3. Future Reality Tree - like a current reality tree except we have altered one or more of the cause effect linkages to change the system into ne which we desire.
  4. Trasition Tree - a logic diagram which shows how to move from a current reality tree to a future reality tree.
  5. Negative Branch Reservations - a logic diagram which show shy a given negative effect must happen. It can also be used to change things so as to guarantee that the negative effect does not occur. This is called trimming the undesireable branch.
  6. Prerequisite Tree -
To be sure there are other desciptions of this basic process in the literature. However, I believe that this formulation offers better specific verbalization of the skills needed to guide anyone through the process of managemnt than anything else that exists.



Desktop Publishing
    Start of Desktop Publishing

    iPad Opinion
    iPad Update

Organizational Behaviour
    The Short and Glorious History
    Management Essentials
    Motivation - A New Look
    Problem-Solving - Getting Things Done

    Radio Buttons & Check Boxes

Theory of Constraints
    Necessary and Sufficient