Individual Competence vs. Organizational Efficiency LO28914

From: chris macrae (
Date: 07/27/02

Replying to LO28913 --

Terje, I am sorry but we are in total disagreement, as far as I can
understand your words

I am a mathematician by training and the one lesson I learnt:
mathematicians and numbers men should never model people systems unless
they cherish/value the people relationships involved

Various Professions herded by accountants and MBA-trainers and Mercahnt
Bankers abandoned that principle years ago for reasons that are muddled
mixture but probably include:
 - wanted to maintain dominant relationship with boardroom
 - didn't realise how intangibles (meaning people connecting processes
such as knowledge, services and networks) were not only becoming the main
eoconomics/productivity drivers but were making separable transaction
accounting less useful until it got to be at best best drowing the woods
in the trees and at worst the province of very opaque people including the
corrupt which are some of the lurkers of opacity

We are in a position where most corporate governance is measured only by
number. This false sense of command and control has distracted many boards
from their learning organization stewardship duties, and even
understanding when investment decisions need take system sustainable
priority over what numbers may make look like excellent performance (
Andersen's little unit in Texas )

There is also a not un-related matter that not all human value is
monetary. The US's founding fathers mentioned happiness twice in the first
8 lines of The Declaration of Independence. What that actually means is
that the law that operates in some US States that a CEO can be sued by
shareholders if he acts too socially responsibly is as unconstitutional as
it is unethical, and as the author of the Divine Right of Capital has
pointed out accounting's laws are the modern day Vietnam that young people
must rebel against with any prank their brains can come up with.
Ironically until they do, stockmarkets will go down and down. Because most
SVA was never to the benefit of the pensioner-investor only to the numbers
manipulator, and even when you maximise short-term numbers by all honest
means available to you through all the professionals who serve you, in
systems terms that's tampering....and in effect most companies have lost
innovation, trust, employee goodwill to such an extent through
numberisation they are spinning as value destructors

The only way back is to install two systems of organizational
measurability: one number oriented focused as simply as possible on
cashflow and reducing well over 50% of today's accounting creativity

and one which is transparent to people relationships and system's
friendly. That's the work we are embarked on at and we
will partner anyone who agrees its time to model professional services 2.0
where the meaning of professionalism is to be totally open about your
work, how it cherishes people relationships, builds trustflows across
organsiational systems. That's not what most of today's numbers guru have
any competence in doing. Their own head adviser David Maister has said as
much in a Fast Company Interviewer. The supreme 1.0 professional has only
one goal : monetising. That's the most rotten application of my profession
as a mathematician that I could ever imagine seeing. Its also a lie to
this thread's name : there's no versus here: not if: 1) my dictionary's
definition of efficiency is full and fair in saying: the power to produce
the result intended 2) assuming INTENTION =sustainable growth for all
stakeholders not a few years of manipulation and then viscious system

Chris Macrae Transparency Standards Community
co-author The Map that Changes Our World (Wiley 2003)

>From: "Terje A. Tonsberg" <>
> I think the difference between what you are saying and what Gijs, Alan and
> I are saying is that you tend to attack the focus on numbers, but we tend
> to feel that it is the ignorance about their significance that is the real
> problem. At one extreme end of the scale you get people who go by "gut
> feeling" and do not pay attention to the numbers at all, on the other you
> get people who think they can make decisions from an accounting statement
> or evaluation report alone -- much like the way the stockmarket works.


"chris macrae" <>

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