Profit Beyond Measure

Many of the Operations readings have been influencing my thoughts about management.  I will document some of my notes here for future reference.

Senge writes, in the foreward to Profit Beyond Measure, that Managerial Accounting has lost its way.  This was a difficult thing for me to read, as managerial accounting was the only part of last year's Finance class that I really understood.  Senge argues that managerial accounting (a method to describe an organization's status) was co-opted as a management tool that caused us to lose touch with the processes responsible for creating profitability.  Transforming management can not be accomplished simply by instituting a system of measures.

I have been arguing this in my own workplace for a couple of years.  Our Performance Measures were instituted. ostensibly, as a means of improving performance, and providing better customer service.  Instead they became a number to be worked to, just like teachers need to teach to the test.  Managers' reviews were based on the accomplishment of their staff's performance measures.  So at the end of every quarter, we were busy doing busy work so we could say we met our goal.  This quote (Deming's) seemed particularly relevant to our work.  "If management sets quantitative targets and makes people's jobs depend on meeting them, 'they will likely meet the targets- even if they have to destroy the enterprise to do it.'"  That's exactly how we feel at my office.  We wonder what happened to the culture of support and fun that existed before the P3 program began.  Our web of relationships seems to have been destroyed, which hurt our character, capabilities and capacity to learn and grow.  In my own staff I have noticed a persistent anxiousness around how we are doing, and it is only in the last 6 months that I myself have been able to take mindful instead of shallow breaths.  The more I read, the more I like this book, and I am only in the foreward (but again, I remind myself that Senge is a kind of hero to me, his writings always resonate. 

He concludes.  Elements of deep change allowing us to live as part of nature:

1. Knowledge creation and diffusion is the root of competitive advantage
2. all organizations are embedded and interdependent with larger natural and social systems
3. how work is organized must be guided by principles of living systems.

I looked forward to reading on with a goal of living and working in flow.