He who does not know where he is, surely he is lost and he who does not know where he is going will surely get to the wrong place.
Our conception of life has caused errors to be classified in a bad way, as something terrible, that deserves punishments or severe reprimands, but if we change our paradigm of that word and take advantage of them, we can come to true knowledge. * Using mistakes as a source of learning *
This issue can be addressed from any point of view.
As ordinary people in our daily way of thinking we can draw interesting conclusions about the mistakes made in the week or month and draw conclusions that serve as experience and a basis, first to avoid making them again and second to visualize the correct path and thus reach the objectives that each one sets.
- As parents in the education of our children, as managers in all the decisions that are made, as politicians or members who are responsible for carrying out models that make nations or institutions of any type and nature successful.
In short, learn from them and incorporate them into the system so that through continuous and constant feedback we can minimize them in all areas of life.
As our main theme is the Strategy taken into action, I will mention some examples of errors made by Directors, Shareholders, Managers or advisory Professionals so that, in this way, an endless list of Errors is built and that they serve as early warning for those before mentioned and success is reached more quickly and easily.
We can use the extraordinary theory of Professor Mario Héctor Vogel, Director of the Dashboard Club "Sharing knowledge is an action of intelligent beings " and thus all who read this article contribute to increase this experience that can help raise the level of life of all of us who live in nations that are going through painful moments like Argentina.
Why do Owners, Managers, Directors or Professionals not know how to request or provide information ?
Information: misconception, sometimes the term information is confused with data, figures or values referring to something, information is much more than that, they are true, precise data that after an analysis and a process of understanding, selection become useful data for decision making.
Information is the communication or acquisition of knowledge that allows you to expand or specify data on a certain subject or is what answers a question.
The most frequent errors referred to the information are the excesses or defects in the quantity and quality of the same.
Many times companies lack relevant information, others the excess of it means that due to having large volumes it is not read, it is not analyzed and what is needed is extracted. The goal is to be able to read what the information tells us in time and use it wisely.
We can also say that when important information is available, it is not transmitted, communicated or disclosed in a fluid and correct manner for all those who need it in a timely manner.
If we add strategic to this word, then it will be the one that ensures survival, that is, dedicating ourselves to the urgent to survive.
Paradigm:
Strategic direction
Why don't we measure or do it incorrectly ?
Measurement systems tell us where we are on the route and how far we need to reach the desired objective. Most of the time we measure linearly but this does not tell us everything we want to know so we must measure and relate. This means that we measure and compare with something referent.
¿ Why only now we used financial indicators ?
Until now we have been using only financial indicators based on Balance Sheets and Income Statements because what we were most interested in was the Final Results, when we realized that this was not enough, that it was already past and that we could not reverse it on the fly, We thought what was missing. The importance of the Intangibles was not being contemplated, thus the indicators of the future “Inductors of the action” appear to anticipate the results with certain prudence as to change the course.
So we also ask ourselves why employees in the same section or hierarchy charge an equal amount of pay and not differentiated by their performance?
Why are the Directors based on Management control systems and not on Strategic Management Systems ?
The Management Control Systems are based as the name indicates in the Budgetary Control, what is wrong with this? we are talking only about a financial framework and the short term.
The Strategic Management Systems are based on the Strategy, which is first in the longer term and is also sustained by the Mission, Values and Vision; If the Strategy does not have its maximum level and we are working with budgets at the beginning of the year, several objectives may be truncated, because surely the financial manager will tell us that is impossible, we cannot dedicate so much money to that investment.
Why are the drivers of growth and productivity confused?
The basic strategies are Growth, Productivity or Profitability.
The first is based on new sources of income such as new markets, new customers or new products or working with current ones and expanding your relationship with the company. Those that follow are based on the best use of fixed and current assets and on the improvement of the cost structure, reduction of direct and indirect costs, sharing resources with other business units, standardization or efficiency.
But? both at the same time are contradictory. If I want to expand my client base, I will have to make investments and expenses that do not coincide with the reduction proposed by the others.
The common problem for companies is that they choose a Strategy and use the wrong indicators to measure it.
The strategy not only has to specify the results you are looking for but also describe how to achieve them.
Why do we maintain contradictions between short and long term plans ?
Only when we use the Balanced Scorecard methodology through cause / effect relationships, we realize that we have problems over time.
It is difficult to explain why the effects occur, also when we have many problems and many causes at the same time.
The Balanced Scorecard covers the deficiency of traditional methods, linking long-term strategy with short-term actions.
Why don't we spend more time thinking and reflecting ?
It would not be good to know how many ideas were generated by each employee or work group. How much we are losing for not knowing how to take advantage of all that sleeping and hidden knowledge. Why don't we hold ideas competitions so that the promoters are motivated and help the collective growth. Then we must reward them through incentive systems, that is essential so that they remain unfrozen and awake to the initiative of the company.
Why don't we learn and use the term synergy more ?
Among its most relevant meanings we have that of Cooperation. Coordination of various activities. Concerted action by various bodies to perform a function. Increased action from various sources, when they act together.
We must create business synergies from all four perspectives, but above all in the aspects of Human Capital, Customer Loyalty and Innovative Infrastructure.
Create synergies between business units, between business units and support units throughout the entire value chain.
We should apply the formula that the Whole is greater than the sum of its parts.
Does Benchmarking also have its mistakes ?
Benchmarking is a systematic process by which an organization seeks to identify best practices for superior performance in who our competitors are at the national or international level.
Looking around us and seeing how the best do things is not a matter of looking alike, but learning to differentiate competitively.
M. Porter says: Activities are the basic units of competitive advantage
Doing activities differently or doing different activities than the competition is not a play on words and has different meanings.
Why don't we dig deeper into causality circles ?
Our problem is cultural and language. We have limitations as systemic thinkers, we only see in a straight line and reality shows us that it is made up of circles.
The circles show us cause / effect relationships in a continuous process of feedback (which is not a simple feedback) is a reciprocal flow of influences. Influence never has only one direction.
When we see a circular diagram we must read its history and thus, as we follow the flows of influence, we see patterns that repeat, improving or worsening the current situation. Thus we will apply sequences of declarations of type "If / Then". As for example if we modify here then what happens there.
The varieties of results will show us Effect indicators and the inductors of action Indicators of causes.
Why don't the trees let us see the forest ?
When we encounter multiple difficulties, we know that we must go back so that the tree does not cover the forest, but we are unfortunate because we only see some separate trees and we stay with them.
Using the benefits of systemic thinking, we could distinguish changes in complex situations. We do not mean that we should put complexity aside, but on the contrary organize complexity in such a way that we can find the causes of the problems and the route to solve them.
Why when we go on a trip do we use maps, we don't use the same tool to run a business?
Why don't we do research on resistance to change?
Why do we wait for the client to leave and then go back to win him back?
Why do we continue to use traditional Balances with generally accepted principles?
Why….?
We could continue this list infinitely and until now we have been using the different tools presented by management gurus at different times such as Just in Time, Continuous Improvement, TQM, ABC (Activity Based costing) Tean Building, Target costing, Empowerment, Benchmarking and Control Boards
But each of them solved a problem or partially.
Today we have a complete tool that can give us the solution to the set of problems raised here and others not mentioned, which is the CMI or balanced scorecard.
