The Unfinished Business of Business

 

Since the beginning of man's commercial affairs, there have been two related issues that have faced all organizations--from nomadic merchants to highly industrialized manufacturers of modern goods. The first of these is the question of what business the organization is charged to carry out. The answer to this question is an expression of business mission--a definition of the pursuits and boundaries of what the organization in question will do. The second issue is an interesting interpolation of the first: How do we do what we do? The answer to this second question is sometimes steeped in secrecy, at times based on unique skills and unusual equipment, and often dependent on years of testing, practice, and evolution.

 

The first issue--that of governance and organizational mission--is a high-minded pursuit of investors and executives. This is the answer to the question: What do we do? To engage in a specific business, resources must be brought together and dedicated to the task. This, of course, is not a strictly modern requirement--though large-scale business consolidation in the Industrial Revolution increased the stakes necessary to be competitive. In connection with this, such governors of business activities quite naturally put systems in place to keep track of these resources. As money became increasingly more critical to business success, the accounting model was developed with control of resources always in mind. There should be no surprise that the first and best implementations of computers in business organizations were in support of the accounting model.

 

The second issue--how the organization does what it does--is the stuff of production managers and salesmen and purchasing agents. The answer to this question involves activities that should occur within the guidelines of the organization's mission--but also in concert with the realities of the marketplace, which often change. In the old days, such requirements were taught by example and by word of mouth. In many cases, such expertise was passed from parent to child or from master to apprentice--consuming years and sometimes decades to learn the secrets and the subtleties of the craft. When computers were recently brought into the picture, there were fewer workable applications to support this kind of task--apart from an accounting infrastructure that dealt directly with monetary issues and high volume transaction processing. Only those kinds of activities that are relatively static and in widespread use have been successfully computerized. This is to say that those unique characteristics of individual companies--those things that come together to define their unique competence--have not been well supported by computers.

 

 

A combination of control of both types is defined as Dual Control--a balance between the hierarchical control brought on by the needs of corporate governance and control of variation and quality of operational processes as established by twentieth century industrial statisticians. Dual Control is considered to be a rare, but an eminently desirable condition. In the early days of commercial activity, organizations assuredly achieved an element of control of mission and of process due to the limited number of business variables faced and because most organizations were quite small--with owners, managers, and workers comprised of the self-same people. Much of that ability to exert Dual Control was lost over time because of the growth in enterprise size, geographic dispersion of operations, increased operational complexity, and the lack of a general-purpose means of defining and controlling such complexity. Dual Control can once again be achieved. The enabling concepts and techniques exist, the tools exist, and standards in many areas have been established that are necessary to bring business into control. These elements simply need to be brought together in a spirit of togetherness and reasonable compromise.

 

 

Musicians struggled over the centuries to perfect their ability to produce satisfying music as represented by the great symphony orchestras of our time. In the same way, we can endeavor to produce a working environment that is in harmony with the realities of science, of human behavior, and of the unrelenting demands of the marketplace. To accomplish this beneficial objective, we need to understand where current business models and practices came from, why our current state of nature exists, and what possibilities exist for the future.