Recently, business and information technology consulting was developed as a response to an organizations needs to solve complex problems by contracting with vendors who can deliver specific human skill sets, i.e. strategic, industry specific, technology specific, etc., unavailable internally within their organization. The costs of contracting such vendors are typically higher than utilizing internal resources, but the “efficiency” gains, both short and long term, achieved by consultants managing and delivering project initiatives are expected to cover, if not surpass, contracting costs. In the natural sciences, business thermodynamics is the science that studies the energetics of these transformative processes.
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Energy Information Administration (EIA) - an agency created by Congress in 1977, as a statistical agency of the U.S. Department of Energy. The EIA provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy and its interaction with the economy and the environment. [URL]
Stoner, C. (2000). "Inquiries into the Nature of Free Energy and Entropy in Respect to Biochemical Thermodynamics." Entropy, Volume 2, 172-177. ISSN: 1099-4300. [URL]
Smith, J.M., Van Ness, H.C., Abbot, M.M. (2005). Introduction to Chemical Engineering Thermodynamics. McGraw-Hill. ISBN: 0073104450.
Generally it is understood that an increase in energy efficiency occurs when either energy inputs are reduced for a given type of service, or there are increased or enhanced services for a given amount of energy inputs . Thus, an optimally structured business molecular organism will require less energy initially and over time when compared with a sub-optimally pared organism. Alternatively, if each human molecule within the optimally pared organism chose to continue to input maximum levels of energy, this would result in increased or enhances service results.
To recap, back to the business case, which from a client’s standpoint is the main driver of each project initiative, this ability to predict project efficiency, is major selling point for a consulting vendor. If the manager can effectively illustrate this predicted efficiency to the client, by introducing the project team to the client and allowing the client to perceive for themselves the optimal energy release which can be achieved by the vendors reconfigured SMO, the vendor has successfully positioned itself 10-steps ahead of the competition, all without expending more than one manager days work (or one manager days energy).
Now take the idea of throwing your project team in test tube, measuring the BMO’s energy release, adding and removing individuals in order to scientifically optimize your BMO, then benchmarking this quotient against the competition’s, now that is an extremely efficient view into the future of business and one "huge" return on investment in anyone’s book!
Matching skill sets to requirements is the first step to ensure optimal paring. The vendor is ensuring that skill sets are not duplicated within the team, which would be unnecessary and inefficient. The second step to ensuring optimal paring is to identify project team members that interact in a way that releases the highest amount of energy, i.e. Gibbs free energy. How does one identify when the highest amount of energy is being released?
While scientifically, one could take a selected project team and analyze the team, via of an energy balance, for the amount of energy it releases when interacting or working on a specific project, real life does not always allow for such ‘test tube’ approaches for identifying projects and deploying them on client site. A practical way to assess energy release is to have several team meetings with specific goals towards preparing for project launch. Specific goals should be short in nature, and should be directly measurable against stated objectives. Some examples of goals might be to develop a project approach or to create a project plan.
The manager in charge of selecting final team members should monitor the interaction of the team members and carefully analyze final deliverables against stated objectives. The manager should be able to determine how members are interacting, who interacts most efficiently with one another, who has specific strengths which can leveraged, and which individuals have specific weaknesses which should either be downplayed or cause them to be removed from the team. The manager should analyze the teams output based on time to delivery, quality and completeness. These are the basic tenants that will guide the successfulness of any project initiative, but more importantly, these are the basic tenants that will determine how much energy release can be expected and the overall efficiency of the project team increased.
GIBBS FREE ENERGY:
In essence, the business molecule or organism, consisting of a consortium of bonded human molecules, functions to output work energy. In this direction, according to the science of thermochemistry, optimized, i.e. matched, bondings of molecules results or functions to release energy, which can be thus used to do work in the desired manner. Work output, in biological thermodynamic reactions, is measured by a quantity called the change in the Gibbs free energy. The greater the energy released, the greater the level of work that can be accomplished. The only way to increase the amount of energy released is to ensure that the molecules that interact and bond to form the BMO have been optimally pared.
How does one actively work to ensure optimal paring? Within a consulting organization, project teams are identified based on specific client requirements. Ensuring the project team members have the appropriate skill-sets to deliver stated client requirements is supremely important. The risk of not meeting aggressive timelines and producing high-quality deliverables is very high. The vendor has already contracted to meet specific terms and deliverables, and payment will be forfeited at the end of the contract, if terms and deliverables have not been met. Once the project team has begun working on the client’s site, the investment by the vendor has already been made, and if the payment is ultimately forfeited, the vendor’s return on investment is negative.
BMO FLOW RATE:
The business organism similarly requires fuel (i.e. mental fuel) in order to create energy to produce work output (i.e. project deliverables). If we can identify each of these inputs and those correlative human chemical reactions associated to these processes within a particular system, we can define a certain ‘efficiency equation’ or work output divided by energy input. Consulting vendors typically provide companies efficiency expectations by creating a business case which outlines the strategic foundation for each project initiative, soft dollar savings, i.e. savings which are hard to quantify in real dollar terms, and hard dollar savings, i.e. savings which can be measured in real dollar terms. The business case will specifically provide the ‘return on investment’ or the amount of hard dollar returns a company can expect to receive less any initial and ongoing capital outlays, over a stated period of time.
Inherently, a business case enables organizations to leverage the concepts of our suggested efficiency equation, but they are only scratching the surface. By further understanding how to optimally organize the business molecular structure as a symbiotic unit, and how to improve the source and processing of fuel in order to create more efficient work output, an organizations ‘return on investment’ can be increased!
Technically, metabolism is defined as the total of all chemical reaction activities which occur in a thermodynamic system; in which a 'system' can be defined as either a cell, an organism, a human molecular orbital, a bonded combination of human molecular orbitals, a group, a school, an organization, a social structure, a country, a consulting project team, etc.
Simply, metabolism is the “sum of the energetics of all chemical reactions which occur within a system”. In terms of our day-to-day life, we typically consider metabolism to equate to the rate at which the human body will burn food for energy in which to survive. Within the business environment, we can apply the concept of metabolism at one level higher than the human body-food-energy equation. As stated above, when three or more human molecules bond into one collective structure with economic function, such as a consulting project team, the result is a bonded business structure or business molecule. A molecule, to clarify, is any structure comprised of two or more atoms. Molecular structures can be either dynamic or static.
BUSINESS MOLECULAR ORGANISM:
To review, in human thermodynamics, the supra molecular organism [SMO] is a human thermodynamics construct defined as a bound state of three or more human molecules bonded into one collective structure as: a group, a school, a corporation, a town, a society, a political system, a country, and even a consulting project team! The analog concept in the economic sense is the business molecular organism [BMO]. The organism is characterized by such thermodynamic definers as: metabolism, efficiency, energy balance, mass balance, financial balance, flow rate, structural integrity, etc. The same scientific definers that impact all molecular structures.
While hard to imagine, scientific structures such as the SMO play a significant role in common every day business. The SMO is related to the concept of a ‘social organism’, in which society is defined as a social collective functioning symbiotically as a single organism. The concept of the social organism was synthesized originally in late 19th century by the French sociologist Emile Durkheim. A thermodynamic take on the organismic concept was introduced by thermodynamic philosopher Lawrence Chin in his work: ’A Thermodynamic Interpretation of History'. The social organism and the business organism are both each defined by a characteristic ‘metabolism’.
In thermodynamics, which is the study energy transformations of dynamical systems and the work-output delivered by them, efficiency is defined as the ratio of the useful energy delivered by a dynamic system to the energy supplied to it. Efficiency, generally, is the ratio of work-energy output divided by heat-energy input or in equation form:
η = -W/QH < 1
In biologial systems, "work" can be defined as any activity energetically equivalent to lifting a weight through a height. Heat is defined as energy in transit. More specifically, in a thermodynamic sense, "heat" is never regarded as being stored within a body. Like work, it exists only as "energy in transit" from one body to another; in thermodynamic terminology, between a system and its surroundings. When energy in the form of heat is added to a system, it is stored not as heat but as kinetic and potential energy of the atoms and molecules making up the system.
This formula has direct bearing on both economic efficiency and business efficiency. Project initiatives are typically delivered under aggressive timelines with exceptionally high level of quality and completeness standards. Because such services are contracted, terms such as timeliness, quality standards and deliverable expectations are negotiated prior to project launch, and the vendor can only receive payment after meeting all terms of agreement.
In business thermodynamics, whenever two or more individuals, i.e. human molecules, bond occupationally to form a business or organization, they function to create technically what is called a supramolecular organism [SMO] or in the business sense what would be termed a "business molecule". The interactions, exchanges, dynamics, and financial reactions, that take place between sets of business molecules define what is called business chemistry. In this manner, the consulting model, as stated above, can be a highly efficient one, assuming the optimal ‘business molecular organism’ [BMO] structure can be both established and maintained in a state of dynamic evolution. This is where human thermodynamics begins to form within the business environment.