Measuring 3 Ps – Policies, Practices & People that add m in (E=mc²)

IBCM © Strategy to “ Measure what is measurable, and make measurable what is not so.- Galileo Galilei:”

From the fact file: “Biotor Industries: “Tue, Dec 23 2008. Morgan Stanley (NYSE:MS) today announced that its Asia private equity group, Morgan Stanley Private Equity Asia, has invested Rs. 182 crores (approximately US$38.5 million) for a significant minority stake in Biotor Industries Limited, the largest integrated manufacturer of castor oil and castor derivatives in the world. PricewaterhouseCoopers acted as Biotor’s exclusive financial advisor for the transaction. ⁱ

Within a year scam broke loose and the king of castor oil of Biotor Bawaji was arrested and he died in prison custody in August 2010.

Fri May 13 2011: The CID (Economic Offences) has got nine-day transit remand of the owners of Biotor Company in connection with a Rs 1,500-crore loan fraud. Bharat Mangaldas Kapadia and his brother, Rajesh Mangaldas Kapadia — were arrested by the Central Bureau of Investigation (CBI) in January for allegedly giving forged land documents of farmers to avail loans from three nationalised banks.^{ii “}

Note the players involved: Morgan Stanley, PricewaterhouseCoopers, Biotor Industries Limited, the largest integrated manufacturer of castor oil and castor derivatives in the world. Note the time taken to plunge into disaster.

Intangible Value Capital

(1) Hidden Values: An organisation is made up of three kinds of elementary particles: policies, which have a positive electrical charge; practices, which have a negative electrical charge; and the People who have no charge. Policies and People are packed into the nucleus, while practices spin around outside.

• Policies are the creative process of management excellence where the managerial emphasis is apparent, the protons of the organisation atom. Organisation that has an identity is measured as to policies created and collectively form Intellectual Value Capital of the Organisation.

• Practices are the action process of the related policies where the operational emphasis is apparent, electrons of the organisation atom, for an infinite succession of finite purposes. Organisation that has an identity is measured as to practices followed and collectively form Emotional Value Capital of the Organisation.

• People (society) do not influence identity of the organisation but they do add to its mass. People form a nucleus with policies of an organisation where participation of society is apparent, the neutrons of the organisation atom. Organisation that has an identity is measured as to policies created, practices followed, with society compacted into the nucleus and collectively form Intangible Value Capital of the Organisation.

(2) Manifestation of values: There’s a commonality between a potter and a scientist accomplishing the task effortlessly, each entrusted with the same energy force Intangible.

• Intangible Value Capital is the measurement of the usage of Intellectual and Emotional Value Capital, brings out the best from matter by colliding with Intangible transforming into pure energy.

(3) Corporate Strategies predict probabilities for future events based on past ones. That by which a strategy transforms in six stages from a state of non-existence into a tangible substance as a policy document or an IPR or an identifiable object adds up to the Intellectual Value Capital of an organisation.

• Illustratively, Corrado and Hulten (2010) estimated that in 2007 investments in intangibles which was at $4.1 trillion was excluded from published national accounts data in the United States,ⁱ is the result of incomplete strategies gone berserk.
• All substance animate and inanimate, sentient (active) and insentient (inactive) objects go through the same creative process. From foetus to baby, from seeds to plant, from ideas to IPRs, to manufacturing, to enacting laws, to accounting standards, to diamonds, to Constitution framework, are all created to be called ‘Matter’ or ‘Substance’ when each goes through an identical Creative Process.

• Corporate Strategies end up as Intellectual Value Capital that represents the Quality of a company, that adds mass m to the energy force by forming a nucleus with the society.

(4) Corporate Governance, is the result of practices followed by the management with each action directly related to the intellectual value capital, forming emotional value capital of a company that revolves around the policies accomplishing finite tasks in infinite succession.

• With the intellectual value capital (policies) as the backbone emotional value capital (practices) establishes the connection to the cause and effect of a cosmic formula, churning out intangible value capital.

• Governance, as it ought to be, functions in a dynamic state enabled by real-time monitoring of material actions.

(5) Enterprise Resource Control: All man-made objects, the outcome of accomplishing tasks in an infinite succession of finite purposes, hold on to a single source of energy – intangible supplied by a single resource provider – People. The manifestations of values found in every building block of the organisation, in multiple functions at multiple dimensions exhibit a self-similarity by measurable terms of binary value 1 and 0(zero) signifying the presence or absence of energy force intangible.

• Intangible is the essence of enterprise resource control resolving the paradox i. of efficiency – by real-time monitoring, ii. of values – by participation of society and iii. of profits – by study of cost consequence, enabled by Inactivity Based Cost Management, analysing inactive intangible.

• Paradox is the result of, what KPMG, EIU report findings stateⁱⁱ: Many firms are grappling with the problem of deciding exactly what and how to measure ; Deciding how to measure is more difficult than deciding what to measure.

(6) Corporate Critical Density: Policies, Practices and People add mass m to the organisational atom that the 3-Ps personify.

• Huge energy (E=mc²), where E is the energy, m is the mass and c the speed of light, is bound up in every material event. The three components of m – the 3 Ps – Policies, Practices and People – are the energy force of the organisation when optimised is multiplied by speed of light times speed of light, indicator of a company’s of capability.

• For the universe to exist as it does requires that hydrogen be converted to helium in a precise but comparatively stately manner that gravity is perfectly pitched – ‘critical density’ is the cosmologists’ term for it – and that it will hold the universe together at the just right dimensions to allow things to go on indefinitely.ⁱⁱⁱ

• The character of gravity revolves around the 3Ps that Corporate Critical Density is the fulcrum for sustainability of optimal efficiency, sustainability of values and sustainability of profits to go on indefinitely.

• With the six-stages of the creative process as well as action process of policies and practices respectively the Intellectual Value Capital and Emotional Value Capital shall be 0-5 at any given time with the optimal value attributed to each at 5 indicating the presence or absence of intangible given the binary value of 1 and 0.

• Intangible Value Capital = (Intellectual Value Capital + Emotional Value Capital)/2, by simple average of all corporates, determines the industry rating. Rating agencies cannot say, “AAA? – it is only our opinion.’ Country rating AAA will have to be bottoms up averaging Intangible value Capital of all resource providers.
  

(7) Three steps to resolve Corporate Paradox

• 1. Real-time monitoring: By equating creative process to every man-made and natural substance, establishing causality of action, relating symmetry of properties between both the said processes of a substance with a common denominator Intangible in six-stages of development, enabling dynamic Governance, the company measuring by real-time monitoring resolves the paradox of efficiency.

  2. Participation of Society: By forming a nucleus with people, policies defining the fiduciary responsibility of the company, recognising society’s ethical responsibility in every building-block of fiscal responsibility, made accountable by four resource categories, ensuring practices do spin around the nucleus, a company by measuring and incorporating society’s participation, resolves the paradox of values.

  3. Study of Cost Consequence: That by which remains in a state of non-existence during creative process, that remains insentient during action process, enabling intangible to collide with the inert matter converting mass in the organisational-atom into pure energy, the company measuring by study of cost consequence resolves the paradox of profits.

  Corporate Critical Density is the result of tweaking the 3 Ps – Policies, Practices and People, when perfectly pitched by the gravity shall hold the Corporate world together at the just right dimensions to allow things to go on indefinitely. Huge energy (E=mc²), where E the energy, m is the mass and c the speed of light} is bound up in the 3Ps as mass of the organisational atom available for use to companies by triggering the intangible, following the dictum Energy as liberated matter, matter as energy waiting to happen ⁱ.

(8) The wonder of management

As Newton said Nature is very consonant and conformable to herself, there is beauty and symmetry in all tangible substance. Science succeeds getting closer and closer to the Nature’s underlying structure that Corporate Management shall adopt for the applicability of the criterion of simplicity.

Whereas Corporate Management has gone farther and farther keen to display insular capacity to stand alone equations of complexity. The potential of management is in tweaking the 3 Ps – Policies, Practices and People to add mass to the organisational atom. A single building-block has the same similarity to every other single block of the entire planet of tangible substance, be it a machinery or a democratic written constitution.

21st Century will see those companies who realise this factor of homogeneity of 3Ps and shall make the best use of adding mass m in (E=mc²) without which E is 0(zero).

Jayaraman Rajah Iyer