注册 登录  
 加关注
   显示下一条  |  关闭
温馨提示!由于新浪微博认证机制调整,您的新浪微博帐号绑定已过期,请重新绑定!立即重新绑定新浪微博》  |  关闭

论老子

道,领导也。领导必需要不断呼唤,教导下属以及以身作则。下属的过和错皆因领导懒惰。

 
 
 

日志

 
 

Financial management is not scientific management  

2013-07-25 12:20:53|  分类: EDAS-Extremely D |  标签: |举报 |字号 订阅

  下载LOFTER 我的照片书  |

In financial management, it is all about hitting the numbers, of course. You simply can't argue with success. Jack Welch - with his combination of ruthless focus and contradictory commitment to staff involvement - had delivered the growth figures that could only be dreamed of by lesser companies. However, nobody ever asked the question whether a company that hit the numbers every year without fail could be the result of how the company's reporting was manipulated. Jack Welch demonstrated little regard for ethics in how his company dealt with environmental issues. GE was sued for polluting the Hudson River.

The “legendary” leader Jack Welch destroys value the moment he left the scene. A year after Jack Welch left GE in Mar 2001, its share price dropped by one-third. By the second year, it had dropped more than half. It continued to slide to hit rock bottom at US10 a share, losing 85% in share value as compared to its peak at US60 a share shortly before Jack Welch retired from GE.

Well, the majority of managers will probably continue to admire him regardless of this fact. Why?

The focus is always on business success and not corporate social responsibility. Rather it is the issue of the personal integrity of CEOs and other business leaders. Great business leaders lay down strong foundations for the company to prosper years after they have left the scene. On the contrary, a business leader who focuses on financial numbers who does not build a strong team, often ignores the purpose defies corporate or social culture, and worst of it all, does not plan for sustainable success to endure beyond his personal tenure. Summing up, he destroys everything.   

Financial numbers does not go beyond simple arithmetic. In other words, financial management is kid stuff. What made financial management a post-degree study is financial engineering. Financial engineering is nothing, but financial manipulation. Of course, to manipulate numbers, it needs smart guys to out-smart the rest. For example, financial derivative is a tool to out-smart the bankers. The solid proof of this statement is manifested in the financial meltdown beginning in July 2008. NOTE: Please read "Greed on Wall street" at url http://wenzhuoting.blog.163.com/ or the Chinese version at http://ericwoonct.blog.163.com under section 《华尔街的贪婪》。

If not for the injection of cash through “Quantitative Easing”, or QE1 and QE2, the biggest banks in USA and Europe could have disappeared from the surface of our Earth. To add insult to you, what is “Quantitative Easing”? It was a carefully coined word chosen to camouflage the act of pumping trillion dollars of cash into the banking system. Now you may jump. Pump up the bank with free money to the banks. Who are the suckers? Every one of us who has to pay for saving the banks in the form of price inflation!        

What is science?

The word science comes from the Latin "scientia," meaning knowledge. Fields of science are commonly classified along two major lines: natural science and social science. The natural sciences seek to understand how the natural world and universe around us works. There are five major branches: Chemistry, astronomy, earth science, physics, and biology. While social sciences study human behavior and society.

Let’s visit the area of scientific management.

Scientific management founded by Federick Taylor[[1]], was one of the first attempts to systematically treat management and process improvement as a scientific problem. It was probably the first to do so in a "bottom-up" way, which is a concept that remains useful even today. Scientific management first became famous for its study of human behavior. With the advancement of statistical methods, quality assurance and quality control could begin in the 1920s and 1930s. During the 1940s and 1950s, the body of knowledge for doing scientific management evolved into operations management, operations research, and management cybernetics.

In the 1980s total quality management became widely popular, and in the 1990s "re-engineering" went from a simple word to a mystique evolution. Today's Six Sigma and lean manufacturing could be seen as new kinds of scientific management, although their evolution had distant from the original Toyota Production System, a kind of scientific management that elevated Taylor’s works to a much higher plane of manufacturing efficiency and effectiveness.

Modern human resources management centers on two behavioral aspects of management: leadership principles and management tools. Let’s begins by defining these two terms.

Management can be defined as the planning, organizing, leading, and controlling of resources to achieve goals effectively and efficiently. Management is getting things done through people.

Leadership is getting others to do things you want done and feel good about it.[[2]]

This is a simple illustration.

A manager would say, “You have to trim your department’s annual budget by 10%.”

A leader would say, “Come! Let’s sit down together and see how we can reduce your department’s annual budget by 10%.”

An inspiring leader would say, “Let’s review your department’s annual budget. In the process, we shall develop strategies to reduce your budget by 10%.”  

However, in most (99%) companies, the CEO is ONLY interested in financial numbers, whether he is hitting the numbers or not. Going by the top-down approach, he cascades down his demand for everyone to trim for example, the annual budget by 10% in order to achieve his own goal of reducing cost by 10%. He has no time to lead his subordinates. Few (1% or less) CEO goes by the bottom-up approach where he reviews how the total cost expenditure rolls up to give him the desired 10% cost reduction and supported by firm plan of actions, tactics or strategies.

A CEO who is driven by financial numbers is not a business leader, but a blinded slave-driver. He is adept at making use of any form of management tools that helps him squeeze the last drop out of a dry towel. Jack Welch is the standard bearer of all financial wizards. He was one of the first few CEO to adopt six-sigma in mid-1990 and it blasted off with huge success. However, six-sigma is definitely not scientific management. It is a mix-bag of a dozen financial tools. I stand by my words. I welcome all challenges from any expert or grand master in six-sigma or lean sigma.

As of today, most literatures on scientific management describe perhaps, a hundred different management tools, and very few management books describe leadership. The entire branch of knowledge about scientific leadership (as oppose to scientific management) is completely missing because the phrase “scientific leadership” is recently coined by the author in early July 2013.

Here are three possibilities of how management science is used to shut out our inquisitive mind on scientific leadership.

One (deny): Ignore the term “scientific leadership” totally because nobody knows what it is about.

Two (Use inductive judgment): Scientific management is all about getting things done through people. Quietly, refute the need for the scientific leadership.

Three (Use the veil of misinformation[[3]]): Scientific management is all about management tools, and stop short of discussing leadership principles.

What will happen to the corporate world in the near future?

Since all CEO focus on financial numbers to demonstrate their business success instead of corporate social responsibility, they will never pick up any leadership principles. To add salt into an open wound, these are the two definition of fundamental leadership, namely, true and false leadership.

1) He who leads for the sake of his people is a true leader.

2) He who leads for the sake of his personal interest is a false leader.

Please answer this question, “If you are a CEO who is ONLY interested in hitting the financial numbers, are you a true or false leader?”

Can you prove to me, the financial numbers are for the sake of the people?


[1] Frederick Winslow Taylor was the creator of knowledge management (its development began in the 1880s and 1890s in the manufacturing industry) because the aim of scientific management was to produce knowledge about how to improve work processes. Although the typical application of scientific management was manufacturing, Taylor himself advocated scientific management for all sorts of work, including the management of universities and government, sales process engineering or corporate marketing. Scientific management has had an important influence in sports, where stop watches and motion studies rule the day.

[2] "To paraphrase Dwight D. Eisenhower, 'leadership is the art of getting others to do things you want done and feel good about it.' I would go so far as to say the goal is to get the person to embrace the "mission" and own it." -- Dale Hamby, a former Army major and a teacher at Harrisburg University.

[3] This is the tool that fools every one, almost without fail. This tool was discovered by the author in 1981 and he called it, “The veil of misinformation” and its principle is very simple. There is no need to tell lies. Just cover up some important information so that the audience can’t see the whole picture. The audience will be fooled by what they see or hear. In other words, just tell the good aspects of a subject and hide all its negative aspects.

  评论这张
 
阅读(197)| 评论(0)
推荐

历史上的今天

在LOFTER的更多文章

评论

<#--最新日志,群博日志--> <#--推荐日志--> <#--引用记录--> <#--博主推荐--> <#--随机阅读--> <#--首页推荐--> <#--历史上的今天--> <#--被推荐日志--> <#--上一篇,下一篇--> <#-- 热度 --> <#-- 网易新闻广告 --> <#--右边模块结构--> <#--评论模块结构--> <#--引用模块结构--> <#--博主发起的投票-->
 
 
 
 
 
 
 
 
 
 
 
 
 
 

页脚

网易公司版权所有 ©1997-2017