What is the stability margin in a business?

The largest shock a business can absorb without crossing its red lines. A cash reserve in months of expenses is the plainest example. The same broken machine is a nuisance with two months of reserve and an emergency with two weeks.

What does phase lag mean in management?

The total delay between a problem appearing and your response landing: noticing it, deciding, and acting. Because of it, purely reactive management tends to correct too late and often too hard.

What is the difference between steady mode and a manoeuvre?

In steady mode the goal stays the same and you make small corrections around it. In a manoeuvre the goal itself moves, such as opening a second location. You then steer along a planned path, inside a corridor of permitted error.

Management Glossary in Plain English, With Coffee Shop Examples

A meeting can spend an hour on alignment, bandwidth and KPIs.

And leave with no number, no owner and no date.

That is the quiet trick of management jargon. It sounds like a plan. Often it replaces one. The word "priorities" fills the slide, and nobody has written down which goal dies first when money runs short.

This glossary works the other way. Every term below names one part of a control loop. Every term points to a number in a real coffee shop. If a word cannot point to a number, it is decoration.

Why a management glossary should fit on one loop

An alphabetical glossary hides how the words connect. Here they follow the loop a business runs every week. What you want. Where you are. How far off you are. What you can move. How you steer.

In the Jirgenson Model, management is a closed loop. Goals in a fixed order, a measured state, the gap between them, and the levers that close it. A forecast then tells you which lever to pull before the damage arrives.

Learn the words in this order and you can name every part of your own business in ten minutes.

Goals: what you want, in order

Goal vector. An ordered list of measurable goals. Not a mission. A list, with numbers and deadlines, no more than nine rows for a person working without software.

Andrew's coffee shop: cash reserve of at least 2.0 months of expenses by month 12. Margin 15% by month 6. Regular customers 40% of receipts. No more than 2 complaints a week. Owner's time no more than 40 hours a week.

Refusal order. The order in which you would give up your goals. The one left at the end is the main one.

Andrew: reserve first, his own hours last. Without a reserve the shop closes, and nothing else matters.

Constraint. What you will not do, even if it would save the goal. It is never traded off.

Andrew: never cheaper beans; never more than +5% on price in one step.

State: where you really are

State vector. The same list as the goals, filled in with measured facts. "A lot" and "a little" are not values.

Andrew at the start: reserve 0.5 months, margin 9%, regular customers 25%, 5 complaints a week, 65 hours a week.

One parameter, one source. Each number has one definition and one place it comes from. Two sources for revenue means two arguments every Monday.

Gap: how far off, and how bad

Error vector. The distance between the goal and the state, row by row. Not a failure. A signal.

Andrew: reserve short by 1.5 months; margin short by 6 points.

Zones. Normal, acceptable, emergency: green, yellow, red. Grey means no data, which is its own warning.

Andrew: the reserve is red; margin, regulars, complaints and hours are yellow.

Red line. The boundary where damage becomes hard to undo, set while you are calm.

Andrew: the cash reserve may never fall below 1.0 month.

Stability margin. The largest shock the business can take without crossing its red lines.

The coffee shop: a broken coffee machine is a nuisance with two months of reserve and an emergency with two weeks. That is why the reserve sits at the top of Andrew's list.

Levers: what you can move

Levers (control vector). Parameters you can change yourself, by your own decision. Profit is not a lever. Price is. Here is how to tell levers of control from results.

Andrew's list: the prices of lattes and cappuccinos, the menu, purchasing, portion size. The weather, the rent and foot traffic failed the test.

Free parameter. A number that moves on its own. You watch it; you do not set goals for it.

Andrew: the share of espresso drinks in sales. It shifts with the menu and prices. He cannot order customers to drink less milk.

Leading and lagging indicators. Lagging tells you what happened. Leading points to what will happen. Steering by lagging numbers alone is living by the fire alarm.

Andrew's leading indicator for margin: average margin per receipt, every week.

Plan and forecast: how you steer

Control concept. One plan per goal, on one page: levers, resources, constraints, leading indicator, deadline and owner.

Control by plan, by deviation, by forecast. The three ways to steer. By plan ignores reality. By deviation reacts to yesterday. By forecast looks ahead and corrects with facts.

Andrew's display case: by plan, a hundred croissants every day, thirty in the bin on Tuesday, thirty guests turned away on Saturday. By forecast: about 70 on a Tuesday, about 130 on a Saturday, 15% fewer when it rains. A rainy Saturday order comes to about 110.

Phase lag. The delay between a disturbance and your response: noticing, deciding, doing. Reacting faster does not remove it. A correction that arrives late is often too strong or too weak.

Modes: holding course or turning

Steady mode. The goal stays fixed. You make small corrections around it, like a helmsman holding a heading in waves.

Manoeuvre. The goal itself moves: a new market, a second location, a way out of a crisis.

Tolerance corridor. In a manoeuvre, the band around the planned path where you are still in control. Drop out of it, and you either return in a controlled way or stop.

Backward move. Planning from the goal back to today. At every step you ask: what must be true right before this?

Name your own loop in ten minutes

Here is the quick win. Take a sheet of paper. Write one line for each part:

Part of the loop	The word	Your line, with a number
What I want	Goal vector	Five goals, numbered by refusal order
Where I am	State vector	Today's value for each, one source each
How far off	Error vector, zones	Gap per row, coloured green, yellow or red
What I can move	Levers	Three things you can change yourself, this week
How I steer	Scheme of control	By plan, by deviation or by forecast? Be honest

If one line stays empty, that is your weakest part. Start there.

What the words cost you if they stay words

Jargon without numbers is not harmless. It lets a business drift while everyone sounds busy.

Take one word: forecast. Andrew's reserve goal is 2.0 months. At his old 9% margin, the "change nothing" forecast reaches it at month 16. With the margin plan working, month 10. Six months of difference, hidden behind the phrase "we are working on profitability".

Every month without a forecast is a month you learn about the gap from the bank.

What a glossary cannot give you

Be clear about what you read. A glossary is a map. It tells you the names of the roads. It does not drive.

Three of these words hide a method that matters most on the worst day:

Term	What you still do not know from the definition	Where the method is
Zones and red protocol	Where exactly to set each line, and the order of action when three rows turn red at once	Chapter 4
Control by forecast	How to build a forecast you can act on with little data, and how to correct it weekly	Chapter 9
Backward move	The five questions that turn a distant goal into a task for this week	Chapter 15

Knowing the word "red protocol" does not tell you which fire to fight first. The definition treats the vocabulary. The method treats the decisions.

For the full list of terms in one place, see the glossary in the Jirgenson Model overview.

Key takeaways

A management glossary is useful only if each word points to a number.
Learn the terms in loop order: goals, state, gap, levers, steering, modes.
Profit is a result. Price is a lever. Mix them up and you get ten minutes of "we have to do something".
Phase lag means faster reactions are not the cure; looking ahead is.
Definitions are the map. The methods behind zones, forecasts and the backward move are the driving.

Words or numbers

You have two choices after reading this. Keep the vocabulary, sound sharper in meetings, and keep finding out about problems from the bank. Or write your five lines tonight and see which part of your loop is empty.

The definitions name the parts. The thresholds, the red protocol, the forecast and the backward move make them work when things break.

Test the logic for free: Chapter 1, with the refusal test. Or get the full control system on Kindle, on Amazon. It comes as a Kindle book, with Andrew's numbers carried from the first page to the last appendix.

Published research

It is scientifically proven that the Jirgenson Model works. The published experiment, its record and its data:

Zenodo (DOI): 10.5281/zenodo.23964934
Hugging Face: E5 Jirgenson Model blind test
Kaggle: E5 blind test dataset
GitHub: experiment folder
Wikidata: dataset Q142022866, author Q141981336
ORCID: 0009-0001-3034-3552

This topic is covered in Appendix B, Glossary of Steer, Don't Guess: Setting Priorities, Reading the Numbers and Correcting Course in Business and Life. The numbers in the examples are illustrative; the book states its limits in Appendix G.