This is a light introduction for those at all ranks, who may not realize certain ways organization management can be defined, tuned, and analyzed mathematically. Lack of understanding of such a framework often leads to misunderstanding of good management decisions or mismanagement by persons in charge. We’ll also touch on the difference between bosses and managers.
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Logistics as foundation
Despite a strong association with the transportation of goods in general, Logistics is an ubiquitous umbrella discipline for any organization. Either it is Corporate Finance, Human Resources, or Engineering — those are just special cases of Operations Research — a crucial part of Management science, and Information Management as the unified core. The modern formalization of the discipline takes its roots in US military, where the question of life and death is not just a metaphor. The author is greatly thankful to Transport and Telecommunication Institute in Riga for the introduction to this from both the Engineering and Business sides many years ago.
Let readers find their own interest in discovering such a beautiful world of systems modeling and competent, objective decision-making.
Operations Research
Probably, any scientific program at universities includes this discipline one way or another, but without sufficient attention, which it deserves.
Any process and characteristic can be quantified and expressed as an equation or a system of equations. Such equations can be defined directly analytically from models, as a result of applying mathematical statistics methods to real data, or even just in an empirical way. Even human emotions or seeded ideas can be easily expressed this way. Various constraints and correlations also become a part of such a system of equations. Add some state variables, and that can be used for dynamic simulation. There are plenty of other aspects and methods.
Typical optimization’s goal is to reach extremes of functions — either minimal and maximum values, and often across multiple parameters. And, there are plenty of ways to do that.
The main point is that this becomes scientifically defined for objective analysis and optimization, which can be validated and proven by anyone, unlike some other techniques of decision-making, which are much more subjective.
Everything ingenious is stupid simple.
Boss vs. Manager
Both a Boss and a Manager likely have sufficient experience, leadership skills, and ability to control their field of authority and responsibility. They both do their job. The difference appears at the decision-making level.
Bosses tend to act quite subjectively, opinionated, and based on internal reasoning. They often operate on the basis of the current situation and shallow risk management methods. Therefore, two different bosses can easily come to different conclusions when they operate independently. Hierarchical positions matter a lot. Strategic planning of an organization may become chaotic and unpredictable. Decisions of bosses can be corrected by feedback extremely rarely.
Managers, on the other hand, tend to act objectively with predictable reasoning. Therefore, it becomes much easier to share duties with either deputies or even ordinary-ranked employees, with predictable results based on guidelines. Managers tend to build such processes around, so those allow eliminating the Managers from daily activities to enable strategic vision. Rather than being an essential gear of a mechanism, Managers become guardians with minimal intervention needed. Even if Managers are lightning fast and even harsh at decision-making, they always accept valid corrections.
Of course, those are two opposite extremes, and typically the decision maker is somewhere in between… Defined by a coefficient in an equation.
Is that real?
Large organizations can build sophisticated models of their own operations in any field, and that is essential for supply chain management, efficient advertisements, high-frequency trading, control over the population, and other high-volume fields of operation.
This can be used by modern bad actors, who can reverse-engineer a model of operation of any business, and painfully hit its fragile places for various purposes. That has military roots after all.
Of course, doing modeling and Math is not always feasible and/or really needed. However, it is essential to understand the concept for objective reasoning and consistent decision-making.
A competent manager knows the foundation, directly or indirectly builds system models in that person’s own vision, and continuously optimizes them to reach the goals. Often, approximate calculations are performed by non-conscious intelligence, and it is known as intuition.
That works, but that does not scale alone. As any mathematical model can be expressed in words, it can be expressed in guidelines, rules, and policies as products of optimizations and analysis.
Focusing on People
It can be charming to believe that people become a priority when employees are still considered as a resource. The reality is that self-motivated individuals are most productive. A pure business, and no sentiments.
There is nothing “evil” and no hypocrisy in focusing on people’s emotional state and motivation, but each at any rank must clearly understand the reasoning for that to eliminate any drama.
Therefore, even such “chaotic” random employee-driven processes can be shaped and steered into the best of an organization, like an air-fuel mixture in an internal combustion engine.
Case study: Agile software engineering
First of all, software engineering is no different from any other form of engineering and production. Replace “software” with “real estate” or “mechanical equipment”, and it becomes the same process. That is Supply Chain Management (SCM), which has well-known common best practices and patterns. Of course, there are different coefficients for, e.g., the cost between writing code and producing a mechanical part, but that does not change the pattern. And, sometimes, writing code is more expensive than loading up a CNC machine. For mass production of parts, there are different approaches, as well as for generating code from a common model.
For example, to load up some experimental part-producing machinery, you need to have defined requirements and a design, so CNC machinery can work non-stop. Same with a junior programmer, who is not ready for competent designing. You have to prepare detailed technical instructions as input and possibly do a verbal hand-off if you want to max out that person’s productivity. On the other hand, with a senior-level engineer, the input can be limited to business requirements and instructions for aligning with the overall design of a project or a system. Here comes the agility of cutting corners of rigid processes and shifting duties by adjusting equation coefficients. XP (eXtreme Programming), as the foundation for Agile, is about senior professionals, not rookies.
Now, let’s look at an Agile process for system architecture. Constant reworking of the architectural foundation is not a sign of being able to adapt, but a sign of poor experience and vision. It is possible to build a general-purpose commercial building where you can freely change the type of business while you keep the foundation and structural elements intact. In a good design, you also minimize reconfiguration of engineering equipment for electricity, telecommunication, water supply, ventilation, and air conditioning. Such a design costs more than one tailored for some initial purpose, like private home architecture, but that maximizes rental profit in the long run.
This is an easy model to build analytically. It can be proven and validated with a simulation. Once real figures are seen in hours and the cost, that becomes difficult to deny, but Bosses do have such an option.
Case study: communication in a team
No matter what field of business that is, efficient quality management requires a protocol for all decision-making discussions and proper reporting for informing and archiving purposes. So-called bunker mentality or silos formation is an anti-pattern and really bad practice for the general sustaining and continuation of business. There are cases when secrecy is required not only in the military, but also in business, but it is never built so management gets excluded from the loop.
Horizontal peer-to-peer communications essentially exclude supervising parties from the loop. So, proper informing would always require creating a protocol or meeting minutes, even for ad-hoc communication, and ensuring all decisions made are properly reflected for archiving purposes. Therefore, team members will tend to skip the bureaucracy, and that is one of the risks to be mitigated.
How to minimize such waste? Make sure all business-related communications are done in persistent group chats or forums in the official language of the company, where all team members and direct supervisors are present. This way, the communication has an automatic protocol, it is always searchable as an archive, and new team members can get familiar with historical details without begging for peer-to-peer information sharing. Enforce reporting into such groups for any peer-to-peer voice communications. Enforce decision-making statements in task trackers and/or other related systems.
The example above is not a complete elimination of essential bureaucracy’s cost compared to bunker mentality, but that is an optimization to minimize its cost to as minimal as possible and relax the burden imposed on the teams. The decision can be proven with Math and then validated statistically.
Such an approach does not restrict any communications between team members on personal matters or for team-building chat purposes. That essentially separates business and personal. However, each party of such interactions should have self-control. Any violation of a policy eventually gets revealed once any decision made becomes traced.
Conclusion
With proper Management in place, organizations follow rational development and decision-making. Organizations naturally eliminate critical key roles in a uniform operation with high tolerance to the rotation of personnel for any reason. Successful Management is a science, backed by leadership talent.