Practice management: simplicity – Long on sense

Sport and business have much in common: competition, coaching and training to start with. So do business and the scientific method: analysis of what’s likely to happen, combined with experimentation and close observation of the results. But business and science fiction?

Robert Heinlein is one of the genre’s grand old men. One of his creations is a piratical philosopher called Lazarus Long whose maxims include (the parenthetical additions are mine): Always cut the cards (maximise the available chances for success); Common sense is a contradiction in terms.

Sense is very rare; Never take anybody’s word about whether a gun is loaded; Belief gets in the way of learning. Rely only on what you know; Most people don’t learn, even from their own experience; Never argue with the weather (face things as they are).

These notions capture sound principles simply and vividly.

I’m familiar with the cry that the world is full of simple solutions, and what it’s short of is simple problems. But I’m increasingly persuaded that complexity is ipso facto suspect.

What passes for sophistication may sometimes be merely a cover for incomplete or fuzzy thinking. Simplicity may point the way to clearer, more useful and more enduring insights.

Consider the notion of economic value added, or EVA, in the investment world. At bottom, EVA is delightfully simple: it is a way of assessing a company’s performance by adding together its revenue and its capital value, less the costs of both – and seeing how the total compares with other years and other companies. It’s very clear, very powerful and very helpful.

Now consider the value we add to our clients through what is typically an intellectual contribution: our ideas, skills and thinking. Arguably any advisory project should leave a client’s business more valuable and less difficult than it was before. Less effortful, stressful, expensive, time-consuming, more readily profitable or more highly rated in the market.

If it doesn’t, it’s hard to see that it has given much value in return for the fee.

That rise (or fall) in the net intellectual and economic value of the client’s business ought to be measurable. It might even be capable of being expressed as a single number. It might then become a pin with which we could skewer (or spur or attach medals to) projects and consultants, in the way that EVA has been used to praise or prick companies and directors.

Would any professional firm dare make such a calculation about its activities?

And if we did, how much would we wriggle?

Tony Scott, an independent consultant, specialises in business communication issues.

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