Saturday, February 20, 2010

It’s the race for valuation rather than value creation that leads to businesses being managed

as MF portfolios rather than with an approach of organisation building

J. P. Singh
Management Consultant, JPS Consulting


As a child, I used to be a pretty good student of mathematics. I guess grilling on sums and tables, which is the norm of Indian school curriculum, contributed tremendously to it. Practice sessions, mental maths as they also used to be called, expected one to rattle off answers to a barrage of questions like 2X2=?, with lightning speed 4! Yes! You would be ridiculed in class if your answer happened to 3 or 5. But, during my management education I was exposed to something ‘illogical’. A ‘Holistic’ approach could actually make ‘Whole greater than the Sum of Parts’ according to Gestalt, I was told. Now what was this new mathematics? We were to unlearn some of the ‘exactness’ of mathematics and were told that when systems operate synergistically, a ‘resonance’ effect actually can lead to such a phenomena.

However, business, I realised, is not mathematics. It is philosophy, an approach, a mindset. Primarily, organisations exist only for two reasons. One, to create value for customers and two, to create return on investment for owners (in that order). In social organisations also these remain valid, but may be expressed as one, to create value for the beneficiaries and two, to create a ‘Surplus’ through efficiencies.

The world is one continuum of energy, represented by different frequencies manifesting as particles. The higher the frequency of a ‘wave particle’, higher is its mass as manifested in the ‘particle’. Business units also replicate such energy continuums and particle duality in a similar way. When they resonate with the same frequency they are one particle of existence. Different frequencies will have them vibrating as separate particles, obviously connected by a weak energy flow, which exits in the cosmos in any case, between diverse entities as well. What then is the purpose of ‘applying autocratic force’ to have them together?

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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