Balanced Scorecard Designer

In studying organizational development and life cycle of businesses, it appears that there are four phases of organizational growth and therefore a need for four kinds of managers. The classification that will follow is not universal nor does it claim to be exclusive or for that matter all encompassing, but it is useful to us from the standpoint of measuring four different goals that are faced by the organizational managers.

No matter the business size or industry, the primary goal for a manager is to continue developing and growing self and others. However, that looks different in different businesses and businesses of different sizes. Thus we will in turn look at micro business, single manager business, multi-manager business and multiple business unit business.

In micro business, where the owner of the business is likely manager of self and at most a few people who simply act as extensions of the owner. In a larger business this is similar to complexity of work of a front-line supervisor (albeit the dynamics are fairly different).  The primary goal of the manager in this environment is to continue growing the technical expertise and become the expert in the specific subject. Employees of this type of a business appreciate the expertise that is possessed by their manager and largely respect the manager with regard to that expertise. The best method that I can think of for measuring continued growth in that expertise is tracking of the notes by said manager that this manager makes when he discovers something new, some new approach or detail, in the workplace. The very effort to keep notes is something that most managers lack, and is a best practice that needs to be encouraged and is encouraged through this measurement process.

Perhaps more importantly, these notes should be discussed at least occasionally with someone who is the mentor or advisor of this manager. Good notes should be encouraged as in the age of information these notes may be the most valuable product that the manager produces.

Performing this routine of taking a few minutes out of the day to write down key thoughts and observations, as well as discussing them with a mentor, will accomplish a few things: it will act as an indicator of consistency, continued learning, awareness and growth. While quantity of notes could be faked, quality of them will be apparent to anyone who decides to audit the trail. Perhaps, most importantly, these notes become knowledge-base for the organization as it grows.

This kind of measurement can be implemented universally throughout larger organizations for every employee, thus insuring everyone’s progress. A basic scale can be used for watching the staff: 0 notes per day means that a person is disengaged, 1 note per day may mean that a person is probably not being challenged enough, 2-4 notes per day means that a person is probably growing at a reasonable pace or at least faking it, 5+ notes per day means that a person is likely in over their head.  With audits and mentor reviews, this practice would be very hard to fake, thus the quality of metrics should be credible.

Yet, in a larger organization, this would be a largely insufficient metric. If we are talking about a manager who is a department head, or manager of a small business, where there is only one manager (approximately six to sixty employees) it is not enough to maintain personal development. A more prominent measure is the ability and willingness to delegate well. A manager is only as productive as their employees. Ideally, a manager has their team so fully trained that they can go off and do something else, or go on vacation without any problems. This ability to delegate can be measured by assessing the tasks which the manager is the only one trained and authorized to do. Greater the number of these tasks, the less likelihood that the manager is capable of exploring new opportunities, working on the business, focusing on the growth.

It is always a concern when a manger cannot go on a vacation. Some of the stronger organizations can easily have the entire leadership team spend a week or two working on things that are strategic, rather than day to day. Obviously, someone could argue that this means they are overstaffed, but if their other indicators, such as financials, do not reflect over-staffing, the only explanation is that everyone is cross-trained to cover for each other and the processes are so simplified that the company can devote the bulk of their time on the new initiatives.

The company does not have to focus on the new initiatives, that is entirely dependant on the organizational purpose which will be discussed at a much later date, but every organization needs the capacity to do so, if necessary. The point is only that a manager can do so, if there is desire to do so, or if the need arises.

This measurement, is but a loose approximation to the proportion of time spent working in the business vs. working on it, but unlike that measure it is not nearly as subjective and qualitative. It also forces the manager to identify their tasks and think about their succession, thus creating a great feedback loop to gauge their progress.

Eventually, there is a chance that the organization will grow beyond one manager, especially if the main manager is getting good at delegating. This is where the third measurement becomes important (though, it may well be a good idea to continue with the other two as well). Unlike the two previous ones, this one is a team measurement, it is a measure of communication and cohesiveness withing the team. The actual measure also forces to record something very crucial that most organisations do not record: the decision making process. The measurement is the percentage of non-routine decisions (decisions that are more than just repeat of previous decisions) is done with an opportunity to comment, with real discussion, dissent and consensus. As a secondary measure of the maturity of the organization, the # of non-routine decisions per day can also be monitored (and is by definition monitored in order to arrive at the other variable).

Organizations that take the time to build consensus and document why they decided what they decided are much more likely to reach conclusions that everyone can live with, as well as build up a database of precedents that would allow for rapid decision-making. However, this is a slow, painful process, that only the strongest teams can endure on the daily basis, thus organizations tend to either never get to it, by leaving one key decision maker in charge, or abandon it as the teams get large, or to keep the management teams small.

Meanwhile, the optimal solution, once the collaboration model starts bogging down, is to create multiple teams, that focus on multiple product-lines or multiple markets. Spinning off sister companies, and creating a network of related businesses is by far stronger than trying to manage an unwieldy large team. It is precisely this ability to create spin offs that is most valuable at this level. The number, and the quality of these spin offs under management is a very strong indicator of the management’s ability at the investor level. At this point in the career of a manager, track record indeed speaks for itself. In order to improve their metrics, this investor level manager needs to invest their time and money in to developing the most promising people and businesses, which is precisely what we would want this manager to do.

Obviously, these measurement methods are much more suited to privately held, or actively managed businesses and co-ops. They do apply to publically traded corporations, but the last layer, has to be measured based on the performance of the actual spin offs the manager started, otherwise it is likely that appointment to a position, not ability will decide the manager’s indicated performance.

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Oleg Tumarkin, Juris Doctor, Master of Business Administration, Certified Six Sigma Black Belt, Practitioner of Theory of Inventive Problem Solving (TRIZ) is an Adjunct Professor of Business at Lakeland Collegeand Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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There is no doubt that the organizations cannot be any more successful than their management. So, you would think we would have the management performance and forecasting down to a science. Yet, with a few notable exceptions, most of us cannot tell good management from bad one to save our lives. Most of the market invests in stocks with little consideration to the quality of the management team or at most by looking at a very indirect indicators of that quality. It is not uncommon for someone to perform relatively well by just guessing stocks, with no research whatsoever. That tells me that the current financial market is a fairly poor judge of the management quality even without looking at examples of Tyco, Enron and Worldcom.

The impirical studies of management quality are few and most take business as a basic unit, whereas there is extensive evidence that a small business unit (under 150 people) tends to be a much more important indicator of the quality of management team. Perhaps more importantly, only on such a granular level, the variation due to special cercumstances can be properly accounted for and analysed.

It is clear that if we can build a better management team, we can outperform competition, provide a better investment opportunity and achieve more, so how do we get there?

We have already talked about the individual traits of awareness, imagination, empathy and logic that are necessary for management success. We have also talked about the team variable of cohesiveness. We even talked about the past business performance as being a lagging indicator of management quality and having some predictive function if the management is stagnating ( there is no turnover and nobody is learning anything). There are a number of other factors, such as learning and growth, emotional well being, strength of the convictions, prior experiences, personal priorities that certainly impact the team performance.

Finally, there are techniques and tricks, approaches that can be used to leverage the management skill set. Practitioners of Theory of Inventive Problem Solving (TRIZ) often use example of a modern day eight grader who is transported to 15th century. Even though today he may be an average kid, in that time period he would appear shear genius because of what he knows and could easily do. Thus good technique raises everyone, no matter how mediocre to a level that is a lot higher than what was available without it.  It is so with management: Balanced Scorecard, Theory of Inventive Problem Solving, Lean, Six Sigma, Primal Leadership and many other techniques can raise the quality of leadership substantially.

But we run in to the fundamental problem: if we don’t know what it means to be a quality leader, how will we know if the quality of management is increasing and what is the ROI on that investment? Thus we are back to the measurement challenge.

In a sense, even a crude measurement will give us a substantial improvement over the current state of uncertainty since we have established that we cannot accurately tell a good manager from a bad one, often substituting popularity, or personal charisma for  some indicator of management ability or falling back to relying on the past track record. So, over the next few weeks we will explore alternative ways of approximating the measure of management ability.

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Oleg Tumarkin, Juris Doctor, Master of Business Administration, Certified Six Sigma Black Belt is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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While recently travelling on the train from Kiev to Vladikavkaz, I shared the space with Alexei Zaikin from Greenstroi who told me about their high-tech construction technologies and innovative approaches that are ahead of the best practices even in America.

I was most fascintated by their key competitive edge, a program that they used for internal communication, project management and tracking of their information. A construction company with great technologies in their industry nevertheless regard their internal communication tool that they update from the sites of their construction, from their office and from the trips to suppliers their main edge.

His experience very much parallels mine. When the communication tools are well implemented, the culture of their use is universal and there is a world of complex problems to be solved, these tools are priceless. They can provide feedback, insight and support to the team. The secret of their effective implementation is that they do not only ad an encouraging feedback but that they help work on the business and only in it. They have the protocols that enable the effective communication with all the aspects of activities in creating the business scaffolding, not just supporting the business transaction.

This is another side of measurement, decidedly qualitative, but nevertheless no less important than the traditional quantitative measurements. A number of Balanced Scorecard measurements can be gathered and aggregated directly from such tools. We can measure the number and frequency of customer and supplier contacts, number and types of issues. Volume and quality of internal communication, as well as many others.

The power of the open communication tools extends beyond the internal communication, as the best tools on the market, such as the version of Open Atrium by the Bucket Brigade, Inc do. It allows to build a community of customers and suppliers, allowing them to share the data and interact internally within a system. Once the protocols of communication become polished, the skills easily transfer in to the world of social media. And that is when measuring the data that is accumulated in the system becomes really exciting. It allows us to clearly see all the different data points together, in the aggregated fashion.

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Oleg Tumarkin, Juris Doctor, Master of Business Administration, Certified Six Sigma Black Belt is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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Employee morale is second only to the quality of the management team in influencing the long term success of a business or for that matter of any organization. It (the employee morale) is a very good indicator of the quality of the management team since it is the most direct outcome of good management. After all  a good management team will do everything to engage their employees.

The best way to measure employee morale is not however the traditional survey. After all, this is not just costly and very periodic information, but it is typically very biased and unrepresentative. People are generally not very aware of how they feel and are unlikely to express their feelings in a place where management whom they might not trust will see it. They are even less likely to produce meaningful responses if they are faced with  a multiple choice or likert scale to describe their morale. Even if the data was perfect, the management would have limited ability to analyze it and  act upon it, since they would have no way of separating the aspects of how people feel that are due to things happening within the organization from the feelings that are just their frustrations or joys bleeding over from other aspects of their life.

Neither is absenteeism, or tardiness necessarily a good indicator of employee morale,  because appropriate external threats and rewards can cause people to show up on time and be there every day even if they dread their jobs.  They would be miserable there and have very low productivity.

This leaves us with engagement. After all if employees love their job they will care and be engaged. And even if it were possible for them to love their job but be disengaged and not care, this would be of little value to the business.

Thus engagement is what we really want to measure.  But how do we measure it? The best approach that I have found is based on the assumption that people who care will tend to want to improve the facilities around them and that if they are allowed to do so, they will like where they work and care about it even more. By picking this variable we can insure that the very process of measurement will propel the organization in the right direction. (Unlike a survey, since someone might not even realize that they are unhappy until they have to say that they are on a monthly survey)

So, the KPI of employee engagement is the number of employee recommended changes that have actually been implemented per full time employee equivalent.

This indicator should closely correlate with the quality of the management team, since the changes can only get implemented and employees can only be happy when there are open channels of communication between them and the management. Study after study  have shown that good employee morale has a positive impact on the bottom line and I suspect that this is a large part of the reason why.

While employee engagement is a lagging indicator for management ability, it is a leading indicator for process improvement, customer loyalty and financial performance.

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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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According to Douglas Hubbard, the foremost expert in the field of business decision support,  “In a portfolio, the investment with the highest return on investment is investment in the information necessary to allocate the investment of the rest of the portfolio.” He argues that up to 5% of any portfolio can be spent on gathering the information necessary to invest the rest of the resources wisely.

This same principle applies to organizational management. A consistent commitment to investing in measurement and feedback systems within the organizations is paramount to good decision making.

But not all investment in data gathering is created equal. Information value inversion is at work. The things that we measure often and fairly precisely, typically have little impact on any crucial decisions. The things we know little about can often net a significant improvement in the decision making by us learning even a little bit more about that information.

Thus, a good Balanced Scorecard can act both as a useful tool and as a waste of money, and unfortunately is often the latter for many organizations.
There are two reasons for it:

1. The Balanced Scorecard is often an after the fact bolt on, it is not part of the core organizational thinking. This is by far the most important problem, since if it is not the key feedback loop but rather one of them, it often serves to create noise rather than reduce it.
2. We tend to measure things that we know how to measure, and more likely than not those are not the right things to measure. There is no scientific approach to determining which things are really worth measuring, we take our best guesses, and typically we are spectacularly wrong. We treat it as an art, yet expect predictably consistently good results, as though it was a science.

What can be done to solve these challenges? Indeed, are they worth solving?
I will start with the second question first. Fundamentally, if you do not solve them with this tool, or some other dashboard, broad multi-variable feedback tool, you are flying blind. While it is dangerous, it does not stand out, since everyone else is too. During the early days of flight, pilots did not have good controls and would often fly along the railroad lines, so that they could rely on the visible landscape and rail station names to navigate. This had lots of problems, but so long as everyone was flying slowly enough, low enough and in familiar enough terrain it worked. However, the circumstances changed, planes fly faster, higher, in more varied weather and can no longer orient themselves in the same way. They have to use gauges on their dashboard and should be able to take off and land without even looking out of the window. This has forever changed the aviation.
In business, until fairly recently we could afford to fly low enough, slow enough and in familiar enough landscape to avoid the need to have useful dashboards. But, not only does this doom your company to continuing to do what you have always done, it may very swiftly obsolete you as others figure out how to do this right. So, ideally, you want to implement the dashboards well because you are aiming for the stars, but if not, implement them well because you don’t want to be left behind.

What about the second question. What can be done so that the Balanced Scorecard becomes the main organizational feedback system and it measures the things that allow the company to safely take off, land, fly and navigate through its difficulties and opportunities, regardless of the outside weather conditions? That sounds like a great topic for the article that will be forthcoming in a week.

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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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Over the last few weeks I have been running an interesting experiment in one of my classes. I gave each student $5 and told them to go turn it in to more. The project is evaluated on these variables:

Each variable is given a range of 1-5 with the extremes being defined

1) Internal team dynamics;
1. Don’t want to do business with this team ever again
5. Will name my kids after my business partners

2) Engage others in helping out with execution;
1. Did it all ourselves
5. An international movement came together to make it happen

3) Utilization of public and community resources (space/tools/software);
1. Just used what we had
5. Multiple community resource holders begged us to come again

4) Effectiveness of execution and repeatability;
1. We have no idea by what miracle it happened
5. We can do it consistently and have trained others to do it

5) Were the customers open to doing more business?
1. Everyone told their friends to run the other way
5. Lots of referrals and invitations to do more business

6) Was it profitable enough for the team to want to keep doing it?
1. Not even if this was the only way I could make money
5. Michael Dell, Bill Gates and the rest of college dropouts got nothing on me

7) Was everything done to minimize risks?
1. I am just glad we are not dead or in jail right now
5. Stakeholders, community and environment could possibly be harmed by this project

Does any of this matter in a really long run?

1. In the long run, we are all dead. – John M. Keynes
5. The impact of this project will matter even after this Universe is no more.

This has been a great success with students quickly exploring many real business ideas and one of them managing to get $80 return on the money, while most made between $7 and $30.  More importantly, they learned a lot about starting a business, mainly that it’s not a pretty theory, but rather a matter of doing something others will pay for. For the next round I have tightened up the requirements and suspect they will do even better.

These eight basic metrics could just as easily be applied to any team, working on any business. These metrics may be hard to ascertain for some businesses, and are way to subjective in other situations, yet these metrics may well be a much better guide to starting a business than many of the more highly specialized metrics that seem to abound.

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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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Success rates for startup businesses are staggeringly low. Yet, everyday thousands of people around the world make the decision to engage in business or start a non-profit and believe that they will defy the odds. After all, one of the most effective ways to change our world, create value and be well-compensated is through engaging in business. An organization gives us leverage to do many things that we cannot do by ourselves.

Individuals who run successful businesses gain power to shape their own destiny. Though operating an organization can be challenging and perilous, it is often a powerful way to fulfill our God-given purpose. An organization must address both future growth and exit strategies. There are times when our purpose will advise us to dissolve the business. Though just as likely, we may get ready to move on to yet bigger and better ways of creating value.

Entrepreneurial management gives us the tools to unleash our potential. It is the discipline of consistently covering all the bases, while focusing on the important. Management is stewardship of resources on behalf of owners to the greatest benefit of everyone. Management principles can help us be effective in everything we do. But what if we need to start something new? Traditionally, this was left to the few entrepreneurial types, who, we were told, are very different from the rest of us in their innate abilities. Yet, at the current rate of technological change, it may no longer be an option to rely solely on these natural born entrepreneurs. Today, to be effective stewards, we must innovate and initiate in business and in life.

Flexibility and speed of change are forcing more and more of us to start and manage various aspects of our lives, rather than rely on someone else to do it for us. It is no longer acceptable to leave the entrepreneurial tasks to others. We must learn the skills that will help us succeed. While management is something that is traditionally taught in colleges around the world, it has proven to be a hard discipline to truly master. The fact that traditional educational system has failed to produce consistently successful managers does not negate the need for learning the discipline. Rather, it points to the need of hands-on learning that is typical of other hands-on trades.

It is possible to learn and apply management principles in order to improve business performance. At some level it is for everyone, since all of us need to manage time, money, resources and relationships. There are a few people that naturally gravitate toward making decisions and being responsible. Nevertheless, many of us need basic understanding of business subjects should we ever need to navigate the waters of business and find business partners with skills to succeed.  Studying all aspects of entrepreneurial management will help spare the headaches of learning by trial and error and allow the advance to more complicated challenges quickly.

The foundation of any business is a team of entrepreneurial managers who are willing to try new things and have a long-term vested interest in the prosperity of an organization. Ownership and management are fused in many startups, but they do not need to be. It is often practical to have people with management skills manage a business that they do not own. Much wealth in the world is managed by managers who have no or limited ownership. Owner’s interests are the same as investor’s interests, and that is generating a return on investment. Management, however, chooses how to go about generating the return.

Management team, not the owner, arranges resources for the greatest common good. Management team attracts resources and controls them day to day, while owners exercise limited control. While interests of the business typically represent interests of its owners, a manager is held to a higher standard. Beyond responsibility to the investors, management team has responsibilities to the community, customers, workers and business partners, just to name a few.

In a lot of startups there is no clear distinction between managers and workers. The problem is that when the organization gets busy doing, it has no longer any time to be thinking. Even in the startup environment it is practical to set particular time aside for specifically managerial functions – planning and making sure plans are being followed. Some organizations even rely on outside consultants to meet with the team just to keep things on track.

Management is as much about working with others as about anything else. To be successful, a manager needs to function as part of a team. Managers must gel together and work as one unit. Working as a team offers the opportunity to make business fun. It is enjoyable to add value, especially when it is done in the fellowship of your peers.

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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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A while ago, Doug Hubbard has introduced me to the concept of measurement inversion. According to him the more something matters the less we tend to measure it and the less we know about it. Things that really matter are often highly imprecise and thus there is a great opportunity to learn a whole lot more. Whereas, the things that do not really matter can often be easily measurement and as a result have been studied to death.

For example, CEO’s actions can impact the company much more than those of an entry level employee, but there is a lot more effort in tracking that employee’s time than the CEO’s. Businesses tend to focus on tracking and managing costs, while the better predictability of revenue is by far more important.

This applies to just about anything. The topics that really matter, like love, relationships, community, friendship, motivation, ability to learn, caring, customer loyalty and leadership are inherently hard to quantify and can be damaged by the measurement process itself. However, we would gain a lot more insight by spending the time to try to have a better idea of the degrees within each of these variables, rather than trying to insure that the attendance is perfect, number of orders is processed in a particular amount of time, or scrap rate has reached a certain part per million count.

Thus, a large part of an organizational challenge is to stop measuring all the wrong things, either things that do not really matter, or things that do not tend to vary much, or things that can be measured less frequently, or to a lower level of precision and still not affect how we make decisions.

Measurement has to become divorced from precise numbers, after all most things are not very precise at all. Nor do we need the level of perfect precision, or for that matter can afford it.

Introduction of tools such as Monte Carlo simulation and SPC charting in the calculation of the variables that are used as KPI in the business setting is the ticket to having more meaningful data that facilitates better decisions.

Among those KPIs one that is worth at least occasionally considering is the benefit from improvement in decision making as a result of availability of the measurement data for each variable at a level of granularity and accuracy that is  currently available. This may help us fight the measurement inversion.

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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and 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.

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Event: Kaplan & Norton Balanced Scorecard Certification Boot Camp June
Date: June 21-25
Where: Cambridge, MA

Price: $5,995

Who should attend:Balanced Scorecard Directors, Managers and Co-ordinators, Executive Directors, Managing Directors, Vice Presidents, Chief Executive Officers, General Managers, Quality Managers, Financial Directors and Managers, HR Directors and Managers, Operations Managers, Corporate Planners, Marketing Managers, Strategic Managers, Strategic Planners, Performance Analysts

Topics:

• Process of effective strategy development
• Components of a complete strategy map
• Steps to properly design a Balanced Scorecard
• Methods and techniques necessary to cascade strategy
• Principles of effective execution and governance

More information: Palladium Website

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When trying to define the qualities of the excellent manager, a term entrepreneurial comes to mind. Someone who can see trends, is aware of market dynamics, as well as dynamics within the organization. As a true entrepreneur, not only been keenly aware of the realities, but being able to envision things that are not yet. A visionary who sees opportunities and is able to impart these visions to others. The ability to dream, to envision, to imagine opportunities is no less crucial than anything else. After all, if a manager cannot dream, how can the come up with something truly new and unique.

For all the awareness and vision, an ideal manager is an actor, a doer, somebody who does not get stuck analyzing trends or dreaming up new markets, rather someone who quickly plans and rapidly executes activities in such a rapid succession that people are unable to comprehend how things can be done so quickly.

Finally, no manager can be truly excellent without the comradeship of his staff, without being keenly aware of their feelings and emotions, without being able to empathize with and support his co-laborers.  Communicating effectively, workload balancing and such are only possible when the manager is aware of both mental logic and emotional state necessary to successfully engage their team.

So, to summarize the foundations of good management are based on four variables that are listed in no particular order: 1) awareness; 2)task management/ability to execute; 3) cohesiveness of the team; and 4) ability to dream/use imagination.

If you think of these four variables, they are also the four ways in which we perceive the world and think. To borrow the language of Myers-Briggs and Jung these are 1) Sensing; 2)Thinking; 3)Feeling; and 4)Intuition. And while the whole old theory about the brain is questionable, these same four elements are often referred to as 1) Left Front; 2)Left Back; 3)Right Front; and 4)Right Back. To use our everyday language these four ways of thinking are 1) Thinking with our senses, eyes, hands; 2)Thinking with our mind, using logic; 3)Thinking with our heart; and 4)Thinking with our gut.

Awareness of these four ways to think is ancient, and yet the application of the awareness that all four must be developed and trained to work in a cohesive union has not been systematically applied to the development of leaders in the fields of management and business.

Conventional wisdom is that we typically have only one of these thinking approaches well developed, may be two, but rarely all four. I submit to you that it is true, but it does happen. Perhaps, what is more important then classifying and pigeon holing everyone to a specific mental process, it is more valuable to help us all develop our brain in such a way that we get better in all four approaches to thinking. Rather than seeing people as a particular personality type, let’s work together to insure that we all have a wonderful personality that is flexible enough to be the type that is necessary under the circumstances and tolerant enough to accept and appreciate people who deal with things differently than we do.

There are two ways to build teams that are much stronger than the sum of their parts. One is through a relationship of people who while personally lean toward one or two of these mindsets but can recognize and value others, who think in a way that is different from theirs and who grow in their specialization on the team. Another is in a team that is constantly cross training and consists of people who can perform all other functions on the team as well. These two are not mutually exclusive. But rather they both point to growth. Growth of each team member in their field, as well as growth in their ability to help out in the fields that are the specialty of their teammates. As well as growth in the closeness and effectiveness of the interconnectedness of the team that so greatly reduces the transaction costs of doing business.

This brings us to the actual measurement of the management team’s growth and business development. We can take a more combinatorial approach. By first measuring the change in in each manager’s skill in each of the four thought approaches and then combining those numbers as a total team score, while keeping in mind the team cohesiveness variable. This may be more precise and may even allow us to compare individual managers against other managers, across business units, thus assuring that we deploy our best talent on our most important projects, but it has two, in my mind, fatal flaws. It is great in theory, but the amount of measurement and calibration involved to assure this measurement may well be prohibitive for most organizations. Perhaps even more importantly, even if we can get past the difficulty of measuring the metrics precisely enough to avoid type one and type two errors that are so demoralizing to  the individual and the team, we still have a motivational problem.  The problem that emerges in the environment of individual measurement an internally competitive environment  that discourages cooperation is bred.  This environment vastly increases the transaction costs, lowering the cohesiveness of the team and defeating the whole value of the measurement.  This  introduces the death spiral of reduced organizational performance that is paralleled by the inevitable inflation of the individual ratings and of the egos. The whole fiasco resulting in the rejection of the measurement tool altogether, in light of better performance by the organizations who do not employ it.

Thus, I propose a different measurement route, one that is at the heart of a growth and development activity that all organizations should embrace anyways and that is collaborative gaming where monthly, or weekly a team is challenged to perform a task together that involves sensing awareness of the five senses and intuitive sixth sense of the gut, logic of the thinking brain and sensibility of the feeling heart. By performing this activity regularly, a change in the performance can easily be tracked and thus provide a crucial indicator of the quality of the management team, while acting as a tool for the improvement along this, most essential,  KPI.

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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 Bucket Brigade and 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.

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