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  • Steven Faseyiku

Economics & Process Management

Economics as a social science teaches us to explain things using very simple models. then based on incremental levels of detail, we start to reach an accurate understanding of how things are. As with using economic models to explain real world phenomena, we can use simple process models to explain any value chain. In economics we include more variables to approximate the real world. In process management we become more detail about the tasks needing done to deliver the end product.

Economics and process models serve as a useful blueprint. Or at least they can be a useful place to start. Regardless the key place to begin is always to define the value chain as specifically as possible. By value chain I'm referring to the product or service that is ultimately being delivered. It could be luxury shoes, aerospace equipment, coffee wholesale, or leadership and development training. It is the purpose, the raison d'etre for each business as influenced by what it seeks to achieve.

Once the product is described its vision and values help to create the process blueprint. The key as in economics is to use the simplest process to generate the value chain. By simple I mean minimal resources and steps for exceptional quality delivery, of the product or service.

The reason for this is two-fold. In the beginning we are unconscious of what we don't know, and need experience to deliver and optimise how we deliver any product or service. And by keeping things simple we are always conscious of the nexus of product, vision, and values as our compass for doing anything.

Vision, values, focus, discipline, habits, and imagination all go into creating this blueprint. Time and the experience of the outcomes we generate help us to fine tune them into a steady state of performance. This becomes part of the business model - a controlled process that reliably delivers a consistent amount of output. However to continue to improve the process and its outcomes requires a certain mindset or perspective. It requires an ingrained sense of a need to always make the process more efficient.

To deliver more output per given input, or to require fewer inputs per given output. This is the end goal for improvement, or innovation. Such innovation can be technical a function of physical changes for quantifiable output. And it can be psychological, a function of improving output or input based on perception. In either case what is essential is tangible improvement, and willingness to try both logical and counter-logical methods for achieving it. Economics provide useful perspective for starting, running, and managing any essential business process. The willing spirit combining discipline with imagination is what is needed to improve it.


Phoenyx Advisory

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