VOLUME 1
Introduction
This is the first of a new series of books in which a written text is combined with Internet-based simulation models. The books have been written for students, managers and the public.
The aim of Amplifying Intuition Volume 1 - A Dream of Future Wealth is to provide the reader with an intuitive understanding of the rules of business accounting. “Do you know how to play chess?” is our subject, whereas the rather more demanding question “Do you know how to play chess well?” is tackled in Volume 2, to be entitled The Hidden Art of Management.
Students of business at the outset of their careers are nowadays presented with an impressively professional syllabus. But when I started work in the 1970s, management education was almost non-existent: one simply learned on the job. However, this greater professionalism is sometimes gained at the expense of specialisation: there is a real danger that today's students may not see the wood for the trees. So in this book I have tried to provide a perspective that may help them to survey the whole forest from above.
Managers of companies, whether modest or multinational, know that their profession is both a science and an art. The scientific side involves aspects such as the rules of accountancy, while the artistic side includes the gut-feel of marketing. These are very different skills and they are often performed by different people, some of whom rarely talk to each other. But both of them are vital if a business is to survive and thrive and so I hope that these chapters will help to build a bridge between them.
Members of the public who are not directly involved with business are nevertheless inextricably intertwined with it, whether as consumers, investors or pension-holders. Every few years a large company goes bankrupt and those who have invested in it lose their money. Their distress at this outcome is often exacerbated by the clear recollection that it announced record profits just a few months earlier. Almost all of us therefore share an interest in understanding company performance and so my third aim is simply to explain to interested members of the public how the rules of business finance operate.
Why “Amplifying Intuition”? Our subject matter is well-trampled ground: there are literally thousands of business books available. Many of these are profound but even so, I am not persuaded that one’s mental model is readily augmented by digesting a conventional text. The acquisition of permanent knowledge often seems to depend instead on personal experience: on ‘learning by doing’. So this book delivers its messages side-by-side with Internet-based simulation models that provide an immediate and intuitive experience of the business dynamics that these chapters unfold.
You can find out more about these simulation models at www.amplifying-intuition.com and this will also enable you to determine whether you are entitled to access them. For the benefit of those readers without such access I have included many explanatory screen-shots. These will enable you to follow the argument with your analytical rather than your intuitive capabilities - with the left half of your brain as opposed to the right.
If you are able to use the models then I would wish to emphasise the benefit of doing so while you are reading these chapters. There are many books about learning to ski, but you cannot expect to excel in that ambition without also visiting the slopes. In this sense we can use the Internet as if it were a ski-school or a flight simulator. It is a place where you can make mistakes without suffering the consequences.
Once you have run your own simulated company and watched it go bankrupt while you are simultaneously declaring healthy profits, you will not need anyone to explain to you how this can happen: it will have become entirely obvious. And however galling you may find the experience, rest assured that it is less painful to go bankrupt with a simulated company than with a real one, just as it is less painful to fall on the beginners’ slopes than on a black run, or to crash a simulated aircraft instead of a real one.
Finally, to help you in the transition from theory to practice I hope to enlist in a future volume the help of several successful businessmen. They are the expert ski guides who will share with you their experience of the real management mountainside. I hope they will also give you a degree of confidence that the diagrams in this book and on the website are not simply theoretical depictions. They are instead direct representations of business reality.
Kingston-upon-Thames, February 2008
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