Management By The Book

Be wary of what numbers don't tell you.

"If you don’t know your numbers, you don’t know your business," "Math is a hard b**ch," or "Your P&L (Profit and Loss) will tell you the truth." These phrases are the kind you'd typically hear tossed around in boardrooms, whether management is examining the company's current state or brainstorming its next big moves.

It's hard to argue with them - after all (perhaps except for a few rare cases), business exists to make money. Whether we like it or not, we often embody ancient Greek Logistai thinking and reduce a complex reality into a one-dimensional discussion about accounting. But more often than not, focusing only on money can make us miss out on other important stuff.

Why Just Looking at Money Isn't Always Best

In a lot of companies, something is considered good if 'numbers are black,' while it's viewed negatively if it generates losses. In such a constructed reality, we often unconsciously limit our field of vision, which leads to poor decisions, often with very bad consequences. Something is either white or black, without any shade of gray in between.

Furthermore, individuals in profit-generating departments are widely praised - they receive the highest bonuses and rewards for their achievements. It's no wonder that within the company, people want to be actively involved in these initiatives.

Then “suddenly and unexpectedly”, the meltdown occurs, and what was once a golden goose stops laying golden eggs, slowly fading away. Profits swiftly shrink, difficult conversations become more frequent, and management wonders what is happening. Further analysis of the situation and attempts at miraculous and quick remedies yield no results. Ultimately, this leads to the closure of the whole department (or the entire company), and its story becomes another cautionary tale in books.

Taking a broader look at a given business, while of course not guaranteeing success, allows to avoid many traps that lurk in hiding. Otherwise, you might be surprised, much like a tourist who was so focused on looking through binoculars that he didn't notice the tiger sneaking up on him from behind.

We Are Just People - The Human Factor Of Every Business

Such things have happened, are happening, and will certainly continue to happen. We may ask why, given that we know the history of Kodak, we know the history of Nokia, and many other companies where focusing solely on the “here and now”, on what brings the greatest immediate returns, led to their downfall or the need for complete restructuring. However, despite these prominent cases, which are thoroughly examined in numerous business books, many companies maintain a narrow focus, concentrating solely on financial aspects. Why?

Well, business is primarily about people. As individuals, we primarily pursue our own interests—we prioritize actions not necessarily in the best interest of our company, but of ourselves. If you're working in a market where the most money is currently being made—because it involves larger bonuses, prospects for advancement, and other perks not available in emerging technologies/initiatives with limited budgets—then that's where attention gravitates. This is why the imminent danger—even if it's close at hand—often remains untold.

Nobody wants to talk about such problems, because they're worried about their own jobs or paychecks. Just as I once heard in a meeting: “I understand what’s happening, but I have a mortgage to pay”.

Beyond Binoculars: Embracing Multidimensional Perspectives

But for a moment, let's set aside the very complicated matters of incentives and human nature. I’m going to assume that you are one of the people evaluating the current state of the whole