With great pride, I can announce that I’ve been shortlisted along with co-author Dr Jules Goddard (London Business School, INSEAD) for a feature that has been named as one of the five Management Articles of the Year by the Chartered Management Institute. It will be published alongside the four other entries in a publication to be launched at the CMI annual awards in February, an event that will also feature the Management Book of the Year.
There were two articles we submitted; on one of which I took the lead, and I must acknowledge that it was the other that’s the shortlisted one! But the two are close cousins. They are both informed by the philosophy that our understanding of the management task, and analysis of how a business is performing, have to be far more multi-dimensional and comprehensive than bottom-line reporting.
The shortlisted article is called ‘Accounting that Counts’ and we discuss the bias towards data that’s easily measurable over a more rounded analysis. In extreme cases this results in important business considerations (talent, potential, external risks) to be downplayed or even overlooked; and a tendency to forget that financial data is historic. The financial results are only ever a by-product of human decisions, shedding little light on causes of business performance.
Another feature of the bias towards data and precision is the tendency to manage to a budget, or compare with historic performance; rather than being ambitious and managing for potential.
‘The firm may well be improving on its past performance, but not at the pace of its competitors; it may be delivering on its plans, but only because they lack ambition.’
In many cases the data, far from replacing narrative, creates a very misleading one. Hence, the article continues:
‘Years of bottom line “growth” at Lehman Brothers masked colossal risk-taking that could only be understood by analyzing behavioural patterns, and recognizing the Illusion of Control and Over-Confidence Bias of key players.’
With The Management Shift by Professor Vlatka Hlupic shortlisted for the book of the year award, the bigger picture is that there is now welcome recognition for a more humane and rounded approach to business management. I’m planning to meet with Vlatka and Jules soon to plan future initiatives.