Business as a precise science
In many fields of discipline the world has experienced a transition from a period where the knowledge appeared to be magic and practitioners were regarded more as wise shamans than doctors. Chemistry has largely grown out of the Alchemy. Slowly but surely in the various aspects of human life we have experienced a move from imprecise guesses and hunches of the few expert practitioners who gained much of their knowledge by happenstance and experience, or some innate talent, to a world where everyone who graduates high school understands such basic principles as gravity, which just a few hundred years ago were shrouded in mystery and could only be guessed at by the experts.
I am not convinced that we have experienced such a transition in the world of business. Much about management is shrouded by mystery that seems to say that it is an art that can only be mastered by the talented few. Not that I am denying that there is an aspect of the unpredictable in management or for that matter anything that deals with human relationships, but as society develops and we all have to become more and more managers of, if nothing else, our own destinies, management has to transition from an art form to a repeatable, predictable discipline that can be learned systematically.
Balanced Scorecard is one of the steps in the transition from the world where truly talented managers could outperform mediocre ones by purely relying on their intuition, often by having an internal equivalent of the Balanced Scorecard in their head, to a world where management tools are going to finally become sophisticated enough where it will not take the same level of genius to just make the day to day decisions. In the world where there is a degree of precision to the decision making the truly talented managers will finally be able to focus on solving new problems, developing new markets, creating new products, engaging in new relationships instead of just doing the same worn out things that can now be put on autopilot.
Balanced Scorecard tools not only allow for the truly talented managers to focus on the new and exciting, but they help develop internal talent pool of the younger generation, since now, equipped with the tools and for the first time understanding the logic of the interrelationships of organizational objectives, even people who historically were not in a position to make business decisions have an opportunity to participate in working together to manage the organization to the benefit of everyone involved.
While the Balanced Scorecard does not quite get us to the world I am describing, it has set the foundation and provided a framework that will aid in the development of the more advanced models that are capable of achieving the promise of simplified, more consistent, straightforward management that is based on explicit principles, rather than on management that is based on a strictly unaided intuition, or worse yet, in many cases management based on strictly financial view of the business world.
In the engineering community community Genrich Altshuller brought about similar revolution by introducing the Theory of Inventive Problem Solving. Even though his first major publications became available in the late sixties, most engineers and inventors have never heard of him and his ideas, however, many who do are considered the elite in their field, and are usually employed by the invention powerhouses like Intel and Siemens.
The dynamic that is happening in that field is quite common in that for example, it took nearly a century for many people to adopt Mendeleev’s Periodic Table of Elements in spite of its clear superiority. Before periodic table we had craft of alchemy, after we have the science of chemistry, but the adoption rate was still painfully slow.
It is so also in business. The effective measurement systems that have to be developed around the framework of a Balanced Scorecard are not yet. Even the Scorecard may have to become more than four dimensional to truly represent the variables that are significant for business management. But the organizations that place themselves at the forefront with this new technology – technology of thought – can, if they use it wisely gain a tremendous edge on their competition.
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Oleg Tumarkin is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with AKS-Labs provides business coaching and Balanced Scorecard implementations. His life’s passion is the development of a universal business measurement and management system that would cause management in to the realm of a repeatable, replicable, yet humane and flexible science.
