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What Is The Purpose of Management?

December 16, 2009 Leave a comment

Every business activity has a value stream. It’s not always clear who specifically is in the value stream, and who supports the value stream. And in some areas, folks may not even be accustomed to thinking in terms of “value streams.”

A value stream, for the sake of this discussion, is any activity that brings in revenue. It is quickly deduced, then, that unless they are involved in the revenue generation process, management is a SUPPORTING function to the revenue stream.

One may regard management as a cattle prod – the whip needed to keep the herd in line, staying productive and following the rules. For all the “enlightened” leadership and management theory that has blossomed since the 1960’s and 70’s, there is still a need for management to perform this function.

Given the nature of human action, though, its not hard for a management organization to begin thinking that they are a “hammer” and everything else is a “nail.” It seems that without meticulous guidance from executive leadership, management tends to overlook that they are, boiled down, a supporting arm to the value stream… That their sole purpose in life is to be a “cattle prod.”

But it is not.

Let me get to the point: I believe that the true function of management is to make the jobs of the people in the value stream as efficient and as easy to accomplish as possible – period – paragraph.

If management consists of brow beating at program reviews as its sole activity of any worth, then they are not worth their paycheck.

Granted, this definition could be construed as controversial.

First, not a few management types have a hard time considering themselves performing a supporting role to those “grunts in the trenches” (although I’m not a big fan of military analogies to business, they can be descriptive in some circumstances).

Second, this philosophy could be misunderstood – “make their job easier? Heck, just stop doing all that data collection, or cut the number of drawing reviewers, don’t make them release drawings, get rid of all those overly excessive documentation processes….”

We have to consider ALL aspects of the value stream. We must realize that one of most critical aspects of the value stream, for instance, is the bidding and costing process. If good data collection and tracking methods are not in place with your design, development, and manufacturing efforts – yes, it would of course make their jobs easier not having to muck with that stuff – management fails in its fundamental function – making the job of the folks in the value stream – in this case the folks trying to capture new business- as easy and efficient as possible.

A little consideration, then, allows us to realize that “making the job as easy as possible” is a higher order concept. Efficiency in one area of the value stream cannot blindly be created by destroying efficiency in another part.

One soon realizes that it is impossible to ignore a fundamental observation – management must be process-oriented to at least some significant degree. They must investigate how things are done, develop an understanding of the process limitations, and hypothesize what roadblocks could arise.

In recent years, “lean” manufacturing has gained a foothold in the design and manufacturing world. Part of the lean paradigm is the kaizen event – a methodical charting activity of a process from stem to stern.

In other words, a framework for evaluating a process flow is available to industry. Despite the well-developed sense of skepticism many in industry have towards manufacturing and quality fads (“TQM”, anyone?), a kaizen is a genuine tool worth implementing.

Why? So management can perform its core function: making the jobs of those in the value stream as efficient and as easy as possible.

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Discovering “Discontinuous Change”

December 14, 2009 Leave a comment

I was introduced to the concept of “discontinuous change” by Dr. Manley at the Florida Institute of Technology in his Business Leadership Theory graduate course.

The term troubled me immediately. It contains an ominous connotation – Heisenberg’s Uncertainty Principle manifested in business activity.

Discovering a limit to human insight in the physical sciences can be troubling – but business activity and social structures are the affairs of men – how can there exist a state of affairs in human interaction where change can be monumental, disruptive, and unforeseeable?

The very nature of business activity – the very theoretical function of the entrepreneur – is risking capital in an attempt to meet future wants and needs.

What future does a free enterprise system have, when planning and activity is affected by discontinuous change?

My free market antennae went up immediately.

Businesses succeed. Others fail. But someone has already discovered why large numbers of business fail in a short period of time – the economists of the Austrian School.

Could it be that the phenomena of “discontinuous change” was the result of observing the deleterious effects of the fiat-based fractional reserve process in the trenches of the design and business world without realizing the drastic change had its roots in monetary policy?

The thought struck me like a bright light – the boom and bust cycle has accelerated – tech stocks, dot coms, real estate, Dubai. It made sense.

Discontinuous Change has a source. A root cause.

Discontinuous Change MUST result from the distortion of market signals.

Discontinuous Change MUST be the result of failed attempts to maintain capital consumption through the political process or through fraudulent fiat money activity distorting the flow of capital away from its most efficient use.

Discontinuous Change was simply the name business leadership and organizational behavior theory attempted to characterize the chaos caused by a corrupt monetary system.

Discontinuous Change carries the innate connotation of being mystical- unknown, unknowable, and uncontrollable.

Thanks to the heroic insights into human action by the great economists Murray Rothbard, F.A. Hayek, and Ludwig von Mises (and their modern intellectual progeny), the mystique of discontinuous change can be stripped away, and foresight can be brought back to the entrepreneurial process.

These issues – business and design activity and how they are understood in terms of true human action, are the subject of this blog.

I will explore topics important to modern business, engineering, and manufacturing: change, process flow, paradigms, barriers to design, operational efficiency, trends, monetary policy, quality, cost, schedule, tools, facilities – anything hindering or impacting the ability of humans to provide wealth and prosperity as efficiently as possible.

Join me in helping managers, planners, engineers, and entrepreneurs grapple with the technological impacts on the design process, program execution in theory and in practice, and to navigate the tumultuous sea of discontinuous change.

Bill Losapio
December 14, 2009

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