Why You Can and Must Make a Quantum Leap

As I’ve promised, I will prove beyond the reasonable doubt that you, indeed, can and must make a quantum leap in aggregate value of your company and in the value-generating power of your ‘corporate machine’ (your business system).

Let’s start with why you can. The simple answer is that a potential for this quantum leap is there. Right there, in your company. Practically every company can potentially at least quadruple its performance – and many can do much better than that. Plus, now you have the tools that you need to make this quantum leap. BDL and BDL-based products.

Why at least quadruple? Because of the omnipresent Pareto principle (also called the ‘80/20 rule’ or, more poetically ‘the law of the vital few’). In aggregate value generation context, it states that 20% of your activities generate 80% of value in your company; the remaining 80% activities generate only 20% of value.

More specifically:

·         80% of a company's profits come from 20% of its customers

·         80% of a company's complaints come from 20% of its customers

·         80% of a company's profits come from 20% of the time its staff spend

·         80% of a company's sales come from 20% of its products

·         80% of a company's sales are made by 20% of its sales staff

Et cetera, et cetera. If you make a simple calculation, you will find out that the ‘80/20 rule’ means that your company operates at 25% of its top achieved performance (which can – and usually is – substantially lower than its top possible/achievable performance). Which means that you can at least quadruple your corporate performance. A quantum leap – right there. As promised.

Michael Hammer and James Champy in their timeless classic bestseller: ‘Reengineering the Corporation: A Manifesto for Business Revolution’ present even more striking examples, when business process reengineering (BPR) project made it possible to increase the performance of a business process by a factor of TEN and performance of a functional unit by a factor of TWENTY. Now, that was quite a quantum leap. And you can achieve the same (or very similar) spectacular results.

There was a major problem, however. The suboptimization problem. Hammer and Champy – and those managers that produced such spectacular results were able to generate these results only locally. At the level of a particular business process or a functional unit.

Why? Because the BPR methodology that they used (and continue using) can perform only local jobs. It simply does not have the tools to visualize, measure and analyze the whole company. And, therefore, to deliver a quantum leap for the whole business entity. Hence, the title ‘Reengineering the Corporation’ is a bit misleading. It is still a piecemeal approach to increasing the corporate performance.

BDL provides exactly such tools. With BDL you can visualize (make transparent), measure and reengineer the whole company – and thus make a corporate-wide quantum leap. In other words, BDL offers a truly holistic approach to business analysis and reengineering. And, therefore, makes these projects radically more efficient in maximizing your corporate performance and aggregate value.

With these tools and this potential, you definitely can make this quantum leap. But you not only can; you must. Why? Because you are at war. At war with your competition for the wallets and checkbooks of your customers. The war where the winner is ultimately determined by its aggregate corporate performance and aggregate value.

If you do not make this quantum leap, your competitor will. And, therefore, will win this war. It’s cut and dry, plain and simple – either you acquire your competitor (or drive him out of business), or your competitor will do the same to you.

That’s why you have really no choice – you absolutely have to make that quantum leap. 

Making a Quantum Leap

To make this quantum leap, you will need to follow eight key steps:

1.      Find the right paradigm for your business system (I already did that for you)

2.      Using this paradigm and the appropriate business system description tools (e.g., BDL) derived from this paradigm, describe (‘visualize’) the ‘ideal’ condition (‘state’) of your company in which both your aggregate value and value-generating power of your business system are maximized. Such description usually includes both visual diagrams and textual description and, therefore, follows a hypertext format. It also includes detailed and comprehensive description of both the structure of your company and values of its KPI. A vital requirement for the right description – no limits. Think that everything is possible. In fact, this statement is much closer to the truth than you might think.

3.      Using the same paradigm and tools, describe the current (‘AS IS’) condition of your company. To come up with this description (which must be comprehensive, well-structured, accurate and up-to-date), you will need to use both the appropriate questions from the CBA Questionnaire (CBAQ) and values of appropriate KPI.

4.      Using both descriptions (‘ideal’ and ‘AS IS’) and the same paradigm and tools, develop a detailed vision of your desired (‘target’) condition (‘TO BE’). Which must be as close as possible to the ideal version, but still realistic. In other words, with the maximum possible (and, therefore, optimal) degree of ‘stretch’. Remember – almost all (in fact, practically all) limits are inside you, not outside. And no one can stop you but yourself. Therefore, you must go for the quantum leap, not small improvements.
  

5.      Develop financial and operational plans (supported by all necessary corporate documentation) for a quantum leap from ‘AS IS’ to ‘TO BE’. These plans must include both achievement of target KPI values and corporate restructuring/re-engineering.

6.      Execute these plans (make the quantum leap)

7.      Evaluate the results. Which might require a few small improvements… or another quantum leap

8.      When you are confident that you have, indeed, made it (‘climbed the Mount Everest’), develop and deploy kaizen (‘continuous improvement’) system. Which must make sure that you always stay on top. In other words, operate at maximum value-generating performance

Can you really make such quantum leap? In the next section I will demonstrate beyond the reasonable doubt that yes, you can. And must. 

Quantum Leap: Definition and Measurement

Now we can come up with a proper definition of a quantum leap – and with a proper procedure for measuring this quantum leap:

A ‘quantum leap’ in this context refers to a radical increase in (1) the amount of aggregate value – financial, functional and operational – generated by your company for your stakeholders and (2) the value-generating power of your ‘corporate machine’. ‘Quantum’ means that this radical increase is measured in ‘times’ (double, triple, quadruple, etc.) rather than in percentages.

To maximize something, you have to manage it. To manage something, you need to measure it. Therefore, to make this quantum leap, you will need to find a way to measure both aggregate value and the value-generating power of your ‘corporate machine’.

Fortunately, there is a way to do that. It is the optimal system of corporate key performance indicators (KPI) that you need to develop, deploy and use. Financial, functional and emotional KPI. You can find basic classification of corporate KPI in Exhibit 1.

KPI can be either quantitative or qualitative. Financial KPI are exclusively quantitative; functional can be either while emotional KPI are almost exclusively qualitative. To properly measure and optimize the qualitative KPI, you must first ‘quantify’ them (i.e., convert to quantitative) using the optimal KPI conversion (‘valuation’) methodology.

Speaking of valuation. Measuring a quantum leap in financial value of a public company is easy – you just need to look at its stock price. Measuring a quantum leap in financial value of a private company is quite a bit more involved – you will need to develop a financial valuation model for your company (which I will cover in detail in the next section of this book).

However, financial value (usually referred to as ‘intrinsic value’) calculated in this model is an estimated value. And, therefore, not a completely accurate measure of a ‘quantum leap’. Therefore, in addition to the financial value proper, you will need to use additional KPI: free cash flow (FCF) and economic profit (EP) which I will also cover in the next section.

Your FCF determines if your business makes financial sense (if FCF is positive, it does; if FCF is negative, it does not). Your EP is the difference between your return on investment capital (ROIC) and your weighted-average cost of capital.

If your return on your capital exceeds your cost of funds (WACC), your EP is positive and your business makes economic sense; if your WACC exceeds your ROIC, your EP is negative and your business (although it may still make financial sense), does not make economic sense.

To measure a quantum leap in financial and emotional value, you will need specific KPI that I will cover in Part II of this book. Measuring an increase in the value-generating power of your ‘corporate machine’ (your business system) is a bit more challenging. And requires the right choice of an appropriate paradigm for your business system. 

Why? Because value-generating power of your business system depends on (1) how comprehensive and lean is its structure – a collection of ‘building blocks’ and how well they are structured in a coherent system; (2) performance of each individual component and (3) how well these components work together.

The optimal paradigm allows you to develop a comprehensive, well-structured, accurate and up-to-date description of you system and attache the appropriate KPI to these ‘building blocks’. These KPI you will subsequently use to measure the value-generating power of your business system – including all three of its components (see above).  

In one of the next sections, I will show that the optimal paradigm for making and measuring the ‘quantum leap’ is the aircraft paradigm. 

Fundamental Objective of Business Management

Before we begin discussing the best way for your company to make a quantum leap, we must first properly define what exactly this quantum leap means. And how to properly measure it.

The first question that we need to ask is: quantum leap to where exactly? The answer is obvious: towards achievement of fundamental objectives of business management. To the top of the mountain (‘Mount Everest’) where we can see the sign ‘Achieved’. ‘Done’.

Therefore, we must begin with proper definition of these objectives (alas, too many management textbooks get it completely wrong). ‘Proper’ means natural, objective, based on facts, logic and common sense.

Business are created by entrepreneurs – their founders. And definitely, for a reason. So why would an entrepreneur start a business? What he – or she – wants to accomplish? Why would he or she take the (often huge) risks of starting and running a business?

For three major reasons, in fact. First, to make a lot of money, of course. Which means (a) to generate a lot of financial value and (2) to monetize it – turn into cold, hard cash – by either receiving dividends, doing an IPO – initial public offering of corporate stock, or selling his/her company to a strategic buyer (e.g. a stronger player in the same industry).  

This will satisfy financial needs of an entrepreneur. An entrepreneur is a special breed for whom to be rich is as vital as for the others to breathe. Therefore, it is, indeed, the need – not the ‘want’.

Second (actually, ‘therefore’), an entrepreneur needs to build (‘engineer’) a powerful (‘lean and mean’) money-making machine, the function of which is to generate the maximum possible amount of financial value in a year, quarter, month, day, etc. This is his or her functional need (again, this is the need, not the ‘want’). Therefore, this ‘machine’ will create functional value for the entrepreneur in question.

Finally, an entrepreneur wants to (1) implement in this machine his or her values, beliefs, principles, etc. as this company is, indeed, his/her ‘baby’ and (2) to thoroughly enjoy the process of building and operating this machine and of making money. Which satisfies his or her emotional needs and, therefore, creates emotional value for an entrepreneur in question. The more, the better, of course.

Therefore, the fundamental objective of managing a business (the raison d’être for a business entity) is to satisfy aggregate needs of its owners (shareholders) to the fullest; in other words, to create the maximum possible amount of aggregate value – financial, functional and emotional for your shareholders. As we are dealing with the business entity here, the ‘first among the equals’ is, obviously the financial value.

This fundamental objective has two sides (‘components’): (1) maximizing aggregate value – a one-time project and (2) building a powerful value-generating machine that will ensure the continuous process of aggregate value generation. As financial value is ‘the first among the equals’, the first component is primarily a financial component and the second one – functional (operational) component of fundamental business management objective.

But this is a narrow definition of this objective. Why narrow? Because it does not take into account needs and interests of other stakeholders of your company. Needs that must be satisfied in order for your company to prosper and even survive. And definitely to achieve its narrow fundamental objective.

Let’s talk about these needs then. Let’s start with obvious ones – those of your customers. Buyers and users of your products and services. Why would they buy them? Some products and services will allow them to make money (business tools) or save money (e.g., lower their utilities bills – or tax liabilities). Therefore, satisfy their financial needs and create financial value.

Mostly, however, these products and services will satisfy their functional needs (food, shelter, transportation, education, etc.). Therefore, create functional value. And your customers would definitely want to enjoy the process of buying and consuming your products and services – and doing business with your company. In other words, to satisfy their emotional needs and receive emotional value.

Other external stakeholders – suppliers, partners, government entities, etc. – interact with your company for exactly the same reasons – to obtain the highest possible amount of aggregate value from you. Financial, functional and emotional. And, when they have a choice, they – and not just your customers – choose the company that will satisfy their aggregate needs better than their competition.

Why would your internal stakeholders – your employees – work for your company? First, to make money. In other words, to satisfy their financial needs and obtain financial value. Second, to enjoy the process of working for your company (after all, they spend most of their time net of sleep in the workplace).

In other words, to satisfy their emotional needs and get emotional value. And, finally, to do their job right (to operate at the highest possible performance), they need to get the right tools for the job. Which means functional needs and functional values.

Obviously, employees always have a choice which company to work for. Which one will they choose? No less obviously, the one that where they will get the highest amount of aggregate value.

Therefore, to get the ‘best’ customers, employees and other stakeholders in terms of generating aggregate value for your shareholders (and the competition is fierce and global), you must satisfy their aggregate needs (1) to the fullest in absolute terms, and (2) definitely better than your competition.

You can consider this need to satisfy the needs of your stakeholders a means rather than the end, but these ‘means’ are so inseparable from the ‘end’ that it would be more beneficial to treat them as an integral part of this ‘end’.

Which will result in the broader definition of your fundamental business management objective:

The fundamental objective of managing your business (the raison d’être for a business entity) is to satisfy aggregate needs of all of your stakeholders – internal and external to the fullest; in other words, to create the maximum possible amount of aggregate value – financial, functional and emotional for your stakeholders, and to do it (1) to the fullest in absolute terms and (2) better than your competition.

As we are dealing with the business entity here, the ‘first among the equals’ are, obviously (1) your owners – shareholders, and (2) the financial value created by your company for your shareholders.

Like in the narrow definition, the broad one has two sides (‘components’): (1) maximizing aggregate value – a one-time project and (2) building a powerful value-generating machine that will ensure the continuous process of aggregate value generation.

As the state (condition) when all aggregate needs are satisfied is rightfully called ‘happiness’, it can be inferred that the broad definition of two sides of fundamental business management objective is (1) to make all your key stakeholders happy and (2) create a ‘machine’ that will keep all of your stakeholders in a permanent state of happiness.

Which in this context can be called ‘corporate happiness’ and your ‘machine’ – a ‘happy company’.  

Structure & Logic of This Book

The book is naturally broken down into five parts. Part I – no surprises here – covers the fundamentals of BDL methodology. It begins with a proper definition of natural fundamental objectives of business management which we must do before we can properly define what the ‘quantum leap’ really means. For three different categories of business entities – established private companies, business ventures and public companies.

This definition – like everything else in this book – is based on undisputable facts, rock-solid logic and good old common sense. Proper definition of quantum leap – in both corporate performance and financial value – will follow this definition.

As I will demonstrate (hopefully, beyond the reasonable doubt), the fundamental business management objective has two components – financial and operational. Financial component requires maximization of financial (shareholders’) value of your company; operational – transforming your company into a ‘lean, mean, money-making machine’.

Well, not necessarily mean, but definitely lean (I will cover the exact meaning of the latter in one of the following sections in Part I). And powerful. The machine that will generate the maximum possible amount of financial, functional and emotional value. At all times.

Achievement of your fundamental financial objective requires development of a solid corporate financial model that I will cover in the next section. Of your operational objective – another model (‘paradigm’) that I will use to come up with optimal structure for the business entity. And for the optimal CBA sequence.  I will show that the best such paradigm is the ‘aircraft’ paradigm that I will cover in the next section (followed by a promised section on lean organization and much-overrated ‘Six Sigma’ methodology). Which will be followed by a small section that will cover a very important section on corporate synergy.

‘Aircraft’ paradigm obviously involves significant engineering component. The basic premise of this paradigm (and of the whole BDL methodology) is that a business entity (in fact, any organization) can and must be engineered as… an aircraft, for example. Or re-engineered, if its performance is no longer satisfactory and must be radically improved.

Unlike ‘traditional’ corporate restructuring which is based mostly on functional approach and more recent ‘classic’ reengineering based on the process approach, engineering and re-engineering methodology that I will present in this section, will be based on much more natural and efficient object-oriented approach. BDL is, after all, an object-oriented language…

Which I will cover extensively in the next section of Part I. Which will present and explain all BDL components – corporate object maps, scorecards (APS and KPIS), ACRC, financial and operational plans, Aggregate Performance Indices (API), etc.

To properly analyze performance of corporate objects and processes and especially to properly calculate API (which are always calculated as % of maximum), we need to know what this ‘maximum’ is. In other words, we need a definition and description of a ‘perfect business’ that operates at maximum performance. It does not exist, of course, but still can serve as a convenient benchmark that your company must be ‘measured against’. Therefore, I will describe it in the next section of Part I using the comprehensive corporate objects map (of so called ‘Level 1’).

The next three sections will be devoted to actual CBA procedure – key steps in your CBA project, key issues in executing and managing this project and an often overlooked (but crucial) issue of handling the corporate fraud that your CBA might very well uncover.

I will conclude Part I with two sections devoted to other two ingredients for your quantum leap – strategic corporate re-engineering (SCR) and development and deployment of a continuous improvement – kaizen – system. The latter must make sure that your company always operates at its maximum performance.

Part II will cover key components (‘sections’) of your strategic and operational CBA analysis. Why it is placed before financial analysis? Because strategic and operational components of your business system generate financial results – and not the other way around. Your get your S&O right – you will get your financial numbers right.

This part is based on a comprehensive corporate objects map and consists of eight sections – strategic section, organization structure, marketing section, operations section, communications section, knowledge management section and human capital section.

Strategic section covers key external factors, the overall structure of your business system, your KPI system, your corporate governance system, your corporate history, your declaration of corporate identity, your mission and vision statements, your corporate strategies (all of them), and your strategic plans – financial, operational and business plan.

Organization structure section covers all dimensions of your corporate organization structure – business units, regional (geographic) branches, retail locations, internal value centers, functional units, workgroups and, finally, legal entities.

Stakeholders’ relationships section covers relationships with all of your key stakeholders – shareholders, customers, suppliers, partners, etc. Marketing section covers unique value propositions (to all stakeholders), target markets, competition, core competencies, competitive advantages, products, brands and services (both explicit and implicit).

Operations section covers key elements of your operational (or ‘operations’) infrastructure – corporate projects, processes, tools and your corporate risk management system.

Communications section (closely related to your marketing section) covers all your corporate communications channels and tools – communications campaigns, Web site, social networks and the like.

Knowledge management section covers key components of your corporate knowledge management system – corporate knowledge base (including its vitally important part – best management practices); your computer hardware and software and your corporate Intranet.

Your human capital section covers the comprehensive analysis of your personnel, your corporate culture, corporate code of conduct, your comprehensive employee motivation system and deals with an important issue of ‘corporate happiness.

Coverage of each subsection includes (1) brief description of the section in question; (2) a vision of an ‘ideal’ implementation of each section – what it needs to operate at its maximum possible performance and (3) a list of questions to analyze the current performance of the corresponding section. Each subsection in Part III is, obviously, analyzed in the same way.

Part III covers financial analysis. It includes analysis of financial statements, financial ratio, your corporate budgeting system and your accounting systems for financial accounting, management accounting, cost accounting and tax accounting.

Parts II and III cover generic issues – common for practically all companies in all industries. Hence, Part IV is devoted to a few special cases that I considered important to cover. Commercial banking, investment funds, manufacturing, distribution and logistics and research and development. Plus, I included into that part a couple of ‘beyond business’ subsections – on performing a comprehensive corporate analysis of government entities and NGO. Non-Government Organizations, that is.

Part V is all about the future. Future of business management; entrepreneurship and startups; investment management; management of government entities and NGO; information and knowledge management; management consulting and education and of the global economy in general. At CAIB, I was pretty good at forecasting so I took the liberty to do some in my book as well.

I will conclude this book with… well, conclusions, where I will present the most important propositions that can – and should – be derived from this book. And with the usual stuff – appendices, glossary and bibliography. 

Why This Book Is a Good Investment for You

By ‘investment’ I mean investment of your time, of course. You are highly unlikely to spend more than fifty bucks on this book – even for a printed version. Which is a pretty insignificant sum even for most business students. You may even download this book (as an e-book) for free or get it as a gift. But your time is highly valuable – regardless of your professional occupation.

So why would you want to invest your time into studying and using this particular book. And not any other book on comprehensive business analysis? Because using this book will generate far more value for you – financial and functional - than any other book.

Why? Because technologies presented in this book will allow you to better identify, visualize and structure your corporate objects, projects and processes, measure their performance and manage your quantum leap performance maximization project. Better than any competing technology presented in any other book, that is.

Actually, BDL and BDL-based products and technologies are the only ones that make it possible to conduct a truly comprehensive business audit, build a truly comprehensive corporate knowledge base and implement the true kaizen – the system of continuous improvement – that will ensure that your company operates at its maximum possible performance at all times.

Specifics of this superior value-generation depend, of course, on your professional occupation.  

For entrepreneurs who want to maximize the financial value of their companies, it means a bigger (often – much bigger) quantum leap in their shareholders’ value. For venture entrepreneurs (startup owners), it allows to (1) raise financing from venture capitalists on more attractive terms (sometimes – raise financing at all); (2) turn their business ideas into powerful money-making machines – and faster; (3) generate higher amount of financial value faster and easier and (4) monetize this amount via an IPO or a strategic sale faster, easier and at more attractive valuations.

For owners and managers of companies that want to raise money via private placement, this book and BDL technologies will make it possible to (a) raise money at all; (b) do it at much more attractive valuations – more money for the same stake or the same money for a smaller stake and (c) provide for much more efficient relationship with their financial advisor – an investment bank.

For corporate finance analysts of investment banks this book and technologies will make it possible to (a) raise more money for their clients; (b) do it at much better terms; and (c) do it faster and easier. And this will bring better commissions and other fees, of course.

For active investors it means making more money faster and easier – and this getting a much higher return on their investments. It will also make their relationships with managers of their portfolio companies radically more efficient and comfortable.

This book and technologies will allow top managers of private companies better satisfy the financial needs of their shareholders. Which will mean higher bonuses and salary raises, of course. And top managers of public companies they will make much easier to increase corporate stock price in the long run – and communicate with investors (especially the large institutional ones), brokerage companies analysts, financial media and the like.

Passive investors who read this book and study technologies presented in the letter, will be able to do a much more thorough a comprehensive CBA (‘due diligence’). Which will make their investment decisions radically better and consequently will significantly increase return on their investments.

Management consultants (more correctly, strategic management consultants) will be able to provide their clients with much more efficient solutions for maximizing corporate performance and financial value. Which will mean higher consulting fees, performance bonuses and much better competitive position in management consulting services market.

Strategic management instructors will be able to provide much more valuable education (in terms of market value of knowledge and skills acquired by studying this book and using these technologies for student projects and case studies). And their students – receive this education, which will significantly improve their job prospects, earning power and well as competitive and negotiating position in the job market. 

Why I Wrote the Book on Comprehensive Business Analysis

The book is called 'Blueprint for a Quantum Leap: A Comprehensive Business Analysis Guide'. It will be completed on or around 12/15/2014. Sort of a Christmas Gift for myself. 

I did it mostly for the same reason that many non-fiction writers did. I desperately needed this book for my everyday work, but it was not available. No one has written it yet. So I had to do it myself. Ditto for the new – and radically more efficient - comprehensive business analysis and strategic corporate reengineering methodology. That I needed no less desperately.

The idea of this book first came to me almost 20 years ago – in the fall of 1996, when I just got a job as a corporate analyst in the corporate finance department of Vienna-based Creditanstalt Investment Bank (CAIB). At the time rated as the best in Central and Eastern Europe.

I worked primarily on private placement projects. On the sell-side, of course; and mostly with active investors. In fact, almost exclusively with active direct equity investors.

Active investors are called ‘active’ because after making a direct equity investment (buying a minority stake) in a company, they work together with management (and company founders) to make a quantum leap in company performance. And, therefore, in its financial value. And then sell it at a huge profit – either at IPO (initial public offering) or to a strategic buyer.

To maximize the amount of money they get from selling their shares to a financial investor (or to sell the minimal stake to raise a certain target amount), companies usually hire a financial advisor – an investment bank with experience and expertise in private placements. In many (if not most) cases, without assistance from a financial investor, a company will not be able to raise money from financial investor at all.

To facilitate a successful private placement (and, therefore, to earn its commission), a financial advisor (and, therefore, its corporate analysts) must uncover and measure a full potential of their client for making a quantum leap in corporate performance and financial value.

And dutifully and convincingly present this potential in a financial model and in information (or ‘investment’) memorandum that has to accompany this model. Which requires accurate description of both ‘AS IS’ (current) and ‘TO BE’ (desired) visions of the client company. And development of ambitious but realistic transition plans (from ‘AS IS’ to ‘TO BE’) – financial and operational. 

Obviously, these plans then will be implemented jointly by company management and active investors (the latter serving mostly as strategic financial and management consultants).

To do these three jobs, the investment bank and its corporate analysts need the optimal (i.e., most efficient) methodology and tools. Unfortunately, the ones that I had (and that did not change) much in the 20 years since then, were far from being ‘the most efficient’.

I was well-trained – both in my MBA program at the University of Texas at Arlington and by CAIB – in this Corporate Analysts Training Program – and did a good job but I always had this nagging feeling that I could have done more. In fact, much more. If I only had the right methodology and tools. And continued feeling the same after I left CAIB to become a freelance consultant specializing in corporate restructuring and financial value maximization.

I could have done more. I could have uncovered more (in fact, much more) opportunities and potential for maximizing corporate performance and financial value of my target companies. I could have helped my clients make a significantly bigger quantum leap in corporate performance and shareholders’ value.

I could have helped them to get more money from private placement of their shares for the same minority stake or sell a smaller stake for the same target amount of equity financing. And I could have helped active private equity investors to make more money and get a higher return on their investments.

If I only had the right methodology and tools. Because in this business (or in practically other business, for that matter) it is not enough to work hard. You also have to work smart and be efficient. Which requires the most efficient methods, tools and technologies.

What was wrong with available technologies? What were the deficiencies of the methods, tools and technologies that I used? There were many (quite a lot, actually), but all of them essentially boil down to four:

1.      Not transparent enough. With available tools and technologies, not everything important in the business entity could be made visible during the realistic time allowed for a comprehensive business analysis. Which obviously caused missing important opportunities for radically improving corporate performance – both of individual corporate objects and of the whole company. Because the latter requires maximizing (1) performance of each corporate object – product, brand, asset, functional unit, etc. and (2) the synergy between objects – how well they work together.

2.      Not structured enough. ‘Classic’ CBA results in two documents – financial model (MS Excel workbook which includes several worksheets – often a lot of them) and an information or investment memorandum – which is an MS Word file with essentially a linear structure. Due to inherent limitations of human mind (the proverbial ‘7 ± 2 rule’), none of these two documents (and even their combination) allows the decision-maker to see and grasp the whole picture. Thus, he or she can see only ‘bits and pieces’ of the whole and thus simply can not make the best decisions – due to the lack of comprehensive knowledge about the business entity required for best decisions.

3.      Not measurable enough. Available technologies do not allow to develop a comprehensive system of corporate KPI which values must be optimized to maximize the corporate performance and financial value. Which therefore leave much (in fact, a lot) to be desired.

4.      Not manageable enough. For the three abovementioned reasons plus the lack of the ‘common business language’. Each functional area in a business entity (marketing, IT, finance, accounting, operations, etc.) speaks the same ‘language’, which makes it (a) very difficult and time-consuming to perform a CBA and (2) also very difficult (sometimes downright impossible) to make professionals from different functional areas work together towards the same corporate objective – maximization of corporate performance and shareholders’ value.

You can maximize only what you can manage. You can manage only what you can measure. And you can measure only what you can see. Available tools and technologies perform poorly in the last two ‘departments’, which lead in poor (sometimes, very poor) performance in the other two. Which, obviously, is unacceptable in our brave new world of cutthroat competition and the resulting corporate performance requirements.

To remedy these deficiencies, I developed a radically new methodology for comprehensive business analysis and strategic corporate reengineering (SCR). In other words, for making the quantum leap in corporate performance and financial value.

I called this technologies Business Description Language (BDL). BDL is an object-oriented language that takes care of four abovementioned problems. I will cover BDL in more detail in Part I – on comprehensive business analysis methodology.  

It takes care of the transparency problem by identifying all corporate objects whose performance needs to be analyzed and maximized to maximize overall corporate performance and financial value. It takes care of the structuring problem by… well, structuring these objects into a system of corporate objects maps that make it possible for a decision-maker to see the whole corporate picture.

BDL takes care of the measurement problem by identifying all KPI for each corporate object and structuring them into a KPI Scorecard (KPIS) for the object in question. In addition to KPI, BDL allows to attach to every corporate object CBA (1) questions used to analyze the performance of this objects and (2) all object-related corporate documents – via links or preset queries. The latter allows – as a bonus – to develop a truly comprehensive corporate knowledge base.

BDL takes care of the management problem by (a) solving the abovementioned three problems and (b) by providing the common business language for all three stages in your quantum leap: (1) CBA, (2) SCR and (3) kaizen. I will cover in detail all three stages and the corresponding BDL roles in Part I – on comprehensive business analysis methodology.

Why spend 20 years developing and perfecting a new methodology and tools for CBA and SCR? Well, for starters, it is a research project – in the science of corporate management technologies; and I was trained and molded as a scientist. Trained by a school that at the time was one of the best in the world in training scientists. And what scientists do? They do scientific research.

Second, Professor Urin was very persuasive in his insistence that I must do something big and valuable for the science. Global science. I knew almost right away that there is no way in the world I could do it in physics or math, but corporate management was a totally different story. And I hope (actually, I am quite confident) that in Part I, I will convince you that, indeed, BDL is highly valuable for the science and practice of corporate management.

Why write a book then? Well, this is the issue of deliverables. New technologies need to be expressed (implemented) in some kind of deliverables. With corporate management technologies (which in my case double as knowledge management technologies), there are only two kinds of deliverables possible – a book (magazine article is too small for that) and a software product. So I did both (I will cover the latter in the last chapter of Part I).

How do I want to create value with this book and my software product? What do I want to achieve?

I want every business and ultimately, every organization (government, NGO, etc. – these also can profitably use my technologies) in the world to be the most and the best they can be. Operate at their maximum performance, which requires them to use resources available to them – financial, material, human, etc. – in the most efficient way. And every their employee to do the same.

I firmly believe that the only problem, the only serious impediment to both individual and corporate prosperity is the highly inefficient (most studies indicates that in most cases it stands at around 5-10% at best) utilization of resources available to them.

And that to solve all problems that plague mankind – economic, political, social, etc. – we need to develop and deploy the most efficient technologies for utilizing these resources to generate the maximum possible amount of aggregate value – financial, functional and emotional. And spiritual – for whom it matters. Now, that would be quite a quantum leap.   

By developing my software product and writing this book (and thus making my technologies available to every manager, investor, consultant, educator, etc. willing to use them) and by providing an inspiration and drive to learn and use these technologies, I hope and intend to make a significant contribution to this quantum leap. And I also believe that time has finally come for these technologies to be developed, described, disseminated and used.

As simple as that. So help me God.