• There are five core functions, and if any of them are missing or under-resourced, the flow of information won’t be balanced with the capacity to process it.

• Information only counts if it’s being delivered in a form in which it can be translated into action, and this means that it needs to arrive quickly enough.

• Systems preserve their viability by dealing with problems as much as possible at the same level at which they arrive, but they also need to have communication channels that cross multiple levels of management, to deal with big shocks that require immediate change.

Often, a core skill of middle management is the ability to manipulate the financial reports to compensate for a set of numbers that aren’t giving the right answer. Everyone who has put together a business plan knows that if you can’t fudge the key assumptions to justify the decision your boss wants to make, you don’t know enough about the business.

There are two obvious ways to fail here. The translation and error-correction mechanism might be inadequate, or the managers might intentionally distort the signals in order to follow priorities of their own. The tragedy of senior management is that it can drift into either of these failure modes without realising; if either problem arises, it arises in their information and communication environment, so they won’t notice it. It’s the problem identified by Niccolò Machiavelli — a prince who is not wise cannot be well advised, and a manager who doesn’t have access to excess analytical capacity won’t be able to tell when something has gone wrong with their subordinates. But maintaining that spare management capacity is expensive.

And this story repeats itself through the history of management science; almost every classic of the literature seems to have described a way of adapting systems to a more complicated world, and then to have become obsolete itself. If you look past the slogans and think about what things like ‘management by objectives’, ‘focus on core competences’ and so on actually mean, they are all different ways of advising executives to restructure their businesses so that they don’t generate complexity faster than it can be managed.

We’ve already seen how accounting systems can act as an information-reducing filter. It follows from this that the greater the emphasis placed on accounting-based targets set by the CEO, the greater the filtering effect.