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Things Fall Apart

Bob: Elaine, guys, have a marvelous Thanksgiving and Christmas break.Olaf: Have you given any thought yet to 1993? Any New …

Bob: Elaine, guys, have a marvelous Thanksgiving and Christmas break.

Olaf: Have you given any thought yet to 1993? Any New Year’s Resolutions?

Bob: Olaf, I leave that sort of thinking to you planners. Judging by all the conferences you went to this year, I’m sure you’ve got something to recommend to us.

Olaf: Well, at our Washington session in September we heard from some wacko speaker about “Adding Value at the Center.” It made me think about what we contribute here at Intergroup Head Office.

What makes us better at the job than any other holding company? The speaker suggested we mark our scorecard according to the following categories: structure, capital, people, projects, communication, information, and controls.

The discussion on structure focused on choices such as functional, territorial, product, and customer. Apparently most of us choose a structure that suits the senior personalities. The speaker said principles of structure such as balance of size and congruence of goal should determine these choices for most firms, irrespective of personalities or precedent.

The second factor, capital, sounded like an all-out assault on cost centers. They were described as accounting relics that introduce divisional turf wars and generally fail to create real value.

Harry: This speaker obviously wasn’t a CPA. Without cost centers, you lose all control.

Olaf: He cited the example of project-based companies such as Boeing and Ford. If you find an activity transcending financial year-end, you’re unable to relate revenues with costs other than by forecasting future value creation.

Elaine: That’s true in a marketing context. I’m always explaining that brand promotion spending is like long-term R&D; it’s not this year’s payoff that counts.

Olaf: In terms of people, the speaker said, not all firms do a good job of recognizing and tracking the future movers and shakers. He said the CEO should involve himself personally in the career moves of the top 200 players. And that a computer-based tool called groupware would help enormously.

Kevin: We talked about groupware in September, and I explained that it invalidated the most sacred rules of data base design.

Olaf: Just wait until you hear the suggestion about projects. Do we agree our role at Intergroup is essentially to change things, whereas middle managers are here mainly to keep things going?

Jack: Speaking from the sales viewpoint, I’m not sure I do. You’d all complain like hell if we didn’t come through with the revenues one month, just because I was busy changing things.

Olaf: But we call a change-based activity a task force or project. So if our key role is to change things, and we do this via projects, then our primary information every month should be about projects.

Financial results are “necessary but not sufficient,” the speaker said. Real management briefing requires a lot more.

Harry: I’d like to see him use this fancy footwork while trying to deliver the financial results only 10 days after cut-off.

Olaf: New Year’s Resolution No. 5 addressed communications. The speaker said that in dismissing electronic mail a CEO missed two main benefits: level-busting and time-shifting. Level-busting flattens the hierarchy; anyone can send messages to the boss. Time-shifting lets people catch up with their correspondence whenever and wherever they like.

The next point was about information, based on some work from that Harvard Business School professor we saw in June 1991-Eccles, I think his name was.

Eccles’ idea is that the information architecture in a company is different from the information technology architecture. The first is the rule-book; it’s the central nervous system. The second is the means by which people choose to implement the rules. Eccles says we should establish the rules before we debate techniques for implementation.

Finally, we heard about controls. The starting point was: “Statutory compliance does not equate to business control.” The suggestion was that tables and reports don’t illuminate the business dynamics. The techniques we’ve used in the past-financial and executive information systems-have been expensive and limited to ourselves as a senior group. In 1993 these techniques may become low-priced and democratic. The name of the game will become information empowerment.

Harry: That’s what I always say when, recruiting financial analysts, Olaf. “Can you take the pressure?” I ask them: “Can you do a consolidation with a wet towel wrapped around your head?”

Bob: That M&A tip aside, I find all this most encouraging. Remember the poet, W.B. Yeats? I woke up screaming at 2 a.m. last week, with a line of his echoing in my head:

“Things fall apart: The center cannot hold.”

That’s not true, at least for Intergroup! With our new organization structure, with our Mission Statement, with groupware, and a newly elected president…we’ll be unstoppable. There are seven new resolutions, one for each year to 2000 A.D.-why, Julius Caesar himself couldn’t halt us.

Olaf: Fine, Bob, but beware the Ides of March.

Bob: Why, Olaf? I have this great idea for my speech at our company meeting around then. It goes something like this: “Friends, Americans, countrymen: Lend me your. . .”

Robert Bittlestone is founder and chief executive of Metapraxis, a London and New York-based consulting group specializing in executive information and strategic control.

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