Management as control?

In command-and-control organisations we attempt to control performance with budgets. The numbers in use are all concerned with cost and revenue. Variations from the budget are subject to scrutiny, a lot of management time is given to explaining variations from the plan.

As IT has grown in sophistication managers are able to dig down to micro-details of the budget. They think more and more of this type of information is a decision maker’s dream. The numbers, they think, represent the system; and if these are the numbers you can intervene – you can demand more of this or less of that.

But think for a moment. The numbers are derived from a budget. The budget is derived from a financial plan which may be coherent in a financial sense but will be arbitrary when related to operations.

So we manage our organisations with arbitrary measures. How sensible is that?

Most measures in use in command-and-control organisations fail the test of a good measure.