The Busting Bureaucracy Hackathon

Chris, I think codifying this is much easier than you might imagine.

The organisations Balance Sheet has a list of assets and liabilities on it, they just need apportioning to the individuals in the system. It is crucial that none are ignored and none are added.
Each line on the collective Balance Sheet driven by the corresponding lines of the Individual Balance Sheets.

We started with a simplified version of the traditional Balance Sheet to make it more accessible to the average "non accountant" but soon we found this had two unintended draw backs- 1) In the longer term we wanted our people to learn the vocabulary of the real world for them to be able to read other companies Balance sheets with confidence (when looking at investments) and 2) we found our accountants would not communicate with our staff as equals unless they used the same vocabulary- even when the staff had legitimate complaints or good ideas the accountants would not treat them seriously.

In the end, we chose to set a conventional B/S standard.

It turned out that a Balance Sheet, as it applies to just your activities, is eminently understandable, all that is difficult to get used to is the accounting vocabulary and terminology- such as debit and credit, and what constitutes an asset and a liability.

I don't think any system of behavioural autonomy can operate soundly without the thorny issue of the companies (think shareholders) assets being wielded by individuals who have no legal responsibility for them being properly resolved.

In terms of the exposure of company assets to loss, perhaps our experience might be informative.
Initially people operate at a very naïve level (no matter their previous authority) and their "investments" are pretty irresponsible, however over time as they become more experienced they tend to grow more conservative and risk averse, eventually more cautious than the shareholders themselves would be (tending to hoard investment capital rather than putting it to work).

It takes quite a few years before they grow the expertise and confidence to wisely deploy assets in pursuit of an investment return- for example through advertising, new equipment, new processes, new products, new markets, new people etc etc.

But don't for a minute think I'm saying the problems above make for marginal returns- on the contrary, the benefits we have observed on our collective Balance Sheet has been extraordinary- we have experienced a huge reduction in the cash tied up in the business, an increase in the rate of "turn" of the cash that is tied up, and a considerable increase in the return on that cash through each cycle.

Together these have transformed the success of the business AND made further funds available for investment. There is a really large benefit when this works effectively.
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