Julian builds some more interesting stuff on possibilities of
accounting and, particularly, some of the conditions that make almost
all corporate accounting inimical to support of learning and
complexity. Accounting should help to build understanding but it
cannot yet account for complexity so generally inhibits
understanding. (As an ex-accountant, I am confident in my
statements - although not necessarily accurate.)
Julian points at "enhancing process, eliminating costs that don't
contribute and developing people" as the challenge of mangaement.
That strikes me as close to complex enough but the middle term hides
an assumption that will sink this particular set - particularly in
accounting terms. What costs "don't contribute" is not simple matter
and those dreaded accounting practices and systems will get this
wrong *because they can't account for emergence and complexity*.
Julian goes on to say about the differences in cost of related areas,
"determining an appropriate balance between them should drive
decisions". Here again we have a way of thinking, an approach, that
is not consistent with emergence and complexity. That is, there is
no way to determine an appropriate balance. We are dealing with
complex, dynamic situations that demand constant adjustment. There
is no optimum. There is no "appropriate balance". There is only the
constant interaction, interplay and co-evolution that demand that we
pay constant attention to balance and to feedback. Looking for data
that will allow us to "determine appropriate balance" will lead to
misleading data and ineffective processes of decision making.
Optimised systems, as I understand them, are also not a view
consistent with complex adaptive systems and emergence. To interpret
John Holland's work into this context, the appropriate approach is
the constant seeking of improvement and potentially useful variation
rather than optimisation. The term optimisation assumes a knowledge
of what is possible but complexity and emergence are powerful
approaches because they recognise that possibility is too large a
space to cover or know. What is called for in this thinking is
strategies of exploration rather than optimisation.
Julian says, accurately, "The way in which overheads and expenses
are allocated distorts costs.". Very simple and accessible work by
Curt Symonds done about 30 years ago (when I was an accountant and I
studied with him) make this clear and provide simple answers which
are amazingly effective at getting around the problem. There are
probably more sophisticated solutions possible with contemporary
thinking and technology but he provides some useful insight. One of
his books was "Dollars and Sense" (I think) and probably is still
available from the American Management Association. (He developed
the accounting application of the "need not to know" which was a very
useful distinction.)
Michael McMaster : Michael@kbddean.demon.co.uk
book cafe site : http://www.vision-nest.com/BTBookCafe
Intelligence is the underlying organisational principle
of the universe. Heraclitus
--Michael McMaster <Michael@kbddean.demon.co.uk>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>