In reality this does not happen. If I was to go into a reader's garage, what would I find? Maybe an exercise machine that started off life in great excitement as we envisaged a leaner self. After a couple of weeks in the lounge it started its inexorable journey to the garage, there to rest under the dust cover for a day in the future when we would use it again so we could say “I told you so.”
In the world of commerce this trait is equally damaging. We will hold onto systems, keep going with projects, keep writing that report that nobody reads because to remove it would mean a loss of face. Let's get over it.
Management guru Peter Drucker,8 whom I consider to be the Leonardo da Vinci of management, frequently used the word abandonment. I think it is one of the top 10 gifts Drucker gave us all. He said, “Don't tell me what you're doing, tell me what you've stopped doing.” He frequently said that abandonment is the key to innovation. He left some rather telling statements.
If leaders are unable to abandon yesterday, they simply will not be able to create tomorrow.
Without systematic and purposeful abandonment, an organization will be overtaken by events. It will squander its best resources on things it should never have been doing or should no longer do. As a result, it will lack the resources needed to exploit the opportunities that arise.
In finance, many processes are followed, year-in and year-out, because “it's the way things have always been done.” When staff question, “Why do we do this?” the CFO or financial controller will often answer, “There must be a reason; so please do it.” In order for the better practices in this book to work, there must be an adoption of:
● An abandonment of processes and procedures that are broken
● A letting go of the past
● A commitment to challenge the rules of the past
An organization that embraced Peter Drucker's abandonment earmarked the first Monday of every month for “abandonment meetings at every management level.” Each session targets a different area, so that over the course of a year, everything is given the once-over. This process would work well in the finance team, except we should meet once a week to discuss at least two abandonments.
Every organization I have come across should have an abandonment KPI measuring the number of abandonments that have been made around the organization last week. Teams that were no embracing the concept would soon want to get the CEO's attention and acclaim by embracing the concept.
The act of abandonment gives a tremendous sense of relief to the finance team, for it stops the past from haunting the future. It takes courage and conviction from the CFO. Knowing when to abandon and having the courage to do so are important leadership attributes.
I have included in the electronic media a book review of Elizabeth Haas Edersheim's The Definitive Drucker.9 Read the book for more on abandonment and his other great advice. I consider this book one of the top 10 management books I have read. I hope, like me, you will become a follower of the great Peter Drucker.
THE IMPORTANCE OF CHALLENGING THE STATUS QUO
Far too often, we have accepted antiquated and anti-lean practices within the corporate accounting repertoire as the status quo. If the medical profession used our approach, it would probably still be using leeches. (Well, actually, I understand that leeches are still used in special cases.) The medical profession has breakthrough conferences on a regular basis, and all the practicing surgeons in that field attend and adopt the new procedure. This should be the corporate finance model. The problem with corporate finance is that the “surgeon,” the CFO, is often too busy to attend, caught in the aforementioned Catch-22.
In an interview, called “The Lost Interview,” Steve Jobs was asked, “As a 22-year-old worth $10 million, and a 25-year-old worth $100 million, how did you get your business acumen?” He said that over time, he realized that most business was pretty straightforward. He talked about when Apple had its first computerized manufacturing plant for the Apple II and the accountant sent Steve Jobs his first standard costing report. Jobs asked, “Why do we have a standard cost and not an actual cost?” The response was, “That is the way it's done.” He soon realized that the reason was the accounting system could not record an actual cost quick enough. When that was fixed, standard costing reports vanished.
In business, Jobs believed that few in management thought deeply about why things were done. He came up with this quote I want to share with you. I believe this quote should be on every wall and in front of every work station in the finance team work area.
“Your time is limited, so don't waste it living someone else's life. Don't be trapped into living with the results of other people's thinking. Don't let the noise of others' opinions drown your own inner voice.”
PDF DOWNLOAD
To assist the finance team on the journey, templates, checklists, and book reviews have been provided. The reader can access, free of charge, a PDF of the following material from www.davidparmenter.com/The_Financial_Controller_and_CFO's_Toolkit.
The templates include:
● A book review of Elizabeth Haas Edersheim's The Definitive Drucker
● The Toyota 14 management principles
● My analysis of Drucker's top 10 gifts
Chapter 2
Leading and Selling the Change
OVERVIEW
Far too many well-meaning initiatives fail because we have not understood the psychology behind getting change to work. This chapter explores the work of Steve Zaffron and Dave Logan in The Three Laws of Performance and John Kotter's Leading Change. It covers the importance of Harry Mills' “self-persuasion,” sets out an eight-stage process that will help you implement the practices in this book, and offers guidance on delivering persuasive presentations.
Before we venture on to the process of implementation, we need first to address selling the change within our organization. Finance teams around the world have wanted to embrace lean practices but are weary because many initiatives both inside the finance team and in other teams fail far too often.
As we will know from past experiences, this sales process is not easy and can be prone to failure. I would argue that more than half the initiatives that are declined at the concept stage were undersold. In other words, given the right approach, the initiative would have gone ahead.
If you are not prepared to learn the skills to cover the common deficiencies in a selling change process, I would argue that you are resigning yourself to providing the same service level for years to come. Selling change requires a special set of skills and we all can, and should, get better at it.
Three books have opened up the way for us to rethink change and to apply techniques that will get change over the line.
STEVE ZAFFRON AND DAVE LOGAN
Steve Zaffron and Dave Logan have written
To understand Peter Drucker's work, read Elizabeth Haas Edersheim,
Ibid.
