The efficiency of management and accordingly the efficiency of business depend entirely on a properly constructed and organized control system in the company, on effective and well-created management tree. Adequate reaction of all the branches of management and execution is an important factor from the point of view of decision-making. I mean that when giving an order it is necessary to have a certain idea of how it will be carried out on the bottom of the hierarchy. Otherwise it will be impossible to plan something, to expect certain economic results, or to control the production. Here it is important to take into consideration the factor of equal understanding and interpretation of any orders, assignments and commands. Otherwise it can repeat a situation with a literary hero - "The teacher has written the word "chepukha" on the board, and the pupil has read it like "renyxa". Thus, the management technology should imply that the results of the company's activity as less as possible depended on a specific person occupying a specific position. 
 
On the other hand, such notions as luck and fortune, as well as the risk the owner of an enterprise runs when organizing his business, play a great role in business. These notions also depend on the company's adequate behavior (a good driver can predict the behavior of his automobile on steep turns of the road). Sometimes we try to combine these two completely different technologies in one person: both properly constructed and adequate management system and successful realization of risky business operations. However, we should not do that, as each of them is a sort of a talent, which does not directly depend on the other one. They form a tandem which leads to the success and prosperity of companies and even states. Someone creates a scheme of a plane, while another one constructs it.
 
My idea is that a person who has an organization talent should organize the business and a talented operator should operate it. The first person should be capable of accepting risky decisions concerning business, while the other one should be a technologist knowing how to organize the business so that the situation in the company was always clear and obvious. Naturally, both the organization and the operation should be conveyed by a full confidence and respect for everyone's interests and the rules of the game and sharing the results of activity. Otherwise, one can get a parallel structure (pulling the initiative away from the business owner) in one form or another, headed by a certain person in the company. Often substitution of technologists by other experts indispensable for business (bookkeepers, lawyers, etc.) can also result in the company's crash, as a technologist is the only one who can determine the right state of affairs in the company and schedule possible structural and technological variations from the point of view of the efficiency of business in the whole.
 
The construction of an effectively working structure devoid of organizational deformations and making the effective use of the available human resources is an art (a labor and technology consuming art, where everything matters, from the characters of its associates and up to the organization of workplaces). A neatly functioning management mechanism, keeping stable in case of any external shakings, is a masterpiece of this art. This mechanism is also capable of successful realization of any risky commercial operations and is sufficient on its development stage. If compared to a sculptor who has clay, the one who creates an hierarchy has three basic tools: consensus, compromise, authoritarism, as well as an administrative tree of acceptance and carrying out of decisions, on which he manipulates the three tools like brushes or scrapers. Further on, using the listed set of tools, he creates a pyramid (perhaps, pharaohs liked this form because it reminds a hierarchy of management).
 
The pyramid of management cannot be ideal, as well as it is impossible to draw an ideal picture or to write an ideal poem. The present world of standards and computer control systems differs a lot from that we had some centuries before. However, these are just tools like artful screw-drivers in the hands of mechanics, allowing to operate more intensive administrative flows, and no more than that. Their efficiency and the volume of use depend on experts in business organization and introduction, who get certain orders from those who build the management pyramid. It is very important, that the tasks were set by the creator himself, as a rule by the main technologist. Business negotiations with partners and maintenance of one's own interests are quite different from the routine creation of the system, the artful construction of mechanisms of business flows, the coordination of the effective schemes with the executors, and the creation of ergonomic interfaces. As a result there should be a prompt reaction of the system to the accepted decisions, the reaction being adequate on all levels.
 
I can draw an example from my own experience when there was an attempt to replace an artfully constructed management pyramid with computers and programs, i.e. they tried to replace the absence of technologists with a sweet pill of automation. The results were quite predictable: the system could naturally refused the proposed ideas and the company finally broke up. It is impossible to replace a complex treatment by taking one pill or making one procedure, as the disease should be cured by complex measures. Many system integrators and companies developing and introducing applicable software often try to represent the proposed decisions as a universal remedy for organizational feebleness and disorder in the company. You should believe that a vacuum cleaner can hardly help you to bring order into your home if you do not decide what things, where and when to put, where to set the furniture and to hang up pictures. Therefore, before introducing any management system, it is necessary to check the correctness of the created management hierarchy (pyramid), to estimate the flexibility potential of the personnel structure, to find out whether you have experts who can correctly, even though temporary, perform the functions of technologists and introducing experts, and perhaps capable of making some changes in the management style, having estimated the possible efficiency of these changes. It may even require involving some external experts to solve these primary problems of business organization, and only after that it will be possible to set computer networks and to introduce SAP R/3 (here arises the question which requires an answer whether the proposed decision will be appropriate for your business technologies or, perhaps, you should try something easier).

Last modified: 12.01.2003
Translation by Elena Polyanskaya