I am back after a week away from Evolving Excellence attending the Lean Accounting Summit in Orlando. It was another amazing experience, and those of us who were there at the beginning when Lean Accounting entered the mainstream at the first Summit in Dearborn five years ago spent a lot of time marveling at the skyrocket we have had the pleasure to ride since then. The turnout was lighter this year in terms of people, but not companies. More companies than ever are deploying lean accounting with truly remarkable results – the impact of the economic downturn seemed to be that companies sent 2-3 people instead of their usual 5-6 or more.
Of all the gains, however, the most exhilarating was the growing enthusiasm in the academic community. Way back then we recognized that it would be a losing battle if the colleges kept turning out kids steeped in standard costing and an effort was made to reach out to the college and university faculty to get them on board and, in turn, their students. With scholarshipsawarded by SME to ten student – faculty teams, and five more awards to faculty given by the Summit organizers, the strategy is paying off. I had the distinct pleasure of meeting Dr. Quianhua Ling from Marquette University and one of her students, as well as four students from Clemson over lunch one day, and the future of lean is in very capabler hands if these young folks are any indication. They really get it, and they will provide a great deal of impatience and energy to the cause when their turn comes.
It gave me cause to stop and think about some of the thick headed accounting folks I have met in recent years who are long on rationalizations about Sarbanes-Oxley, GAAP and other irrelevant reasons for ducking their responsibility to take a leadership role in their company's lean journey. These current experts - the up and comers in their organizations - will soon be those people we have all seen, clinging to the past, blaming the dead end their careers have hit on office politics and anything other than their own refusal to change. The kids I met in Orlando, and hundreds – even thousands – more like them will soon roar past these defenders of the status quo.
Success breeds risk aversion and a culture of game-playing and complacency in the big manufacturers. Boeing is the only really big company to really embrace lean accounting and they are, for all of their struggles to find their path, really trying to embrace a true lean enterprise management approach. The rest of the Lean Accounting Summit companies are medium sized companies. The same culture of polishing the edges, while scared to death to rock the boat at the core, seems to pervade the academic elite. The colleges that are embracing lean accounting are no slouches – they include places like Boston University, Brigham Young, Mississippi State, the University of Mississippi, UMass, Tennessee, Washington and Xavier University – but the elite B-Schools are noticeably absent, not really addressing the fundamental issues of management, but trifling with refining theories of merger and acquisition valuation and the like. Like their Fortune 500 brethren, they are doomed to eventual irrelevance.
The day will soon come – and it may well already be here - when serious manufacturers will do their recruiting for financial management at Clemson and they will place a premium on kids who learned from Dr Ling at Marquette. The elite school graduates will find a home somewhere, but not in manufacturing companies where they will have nothing to offer.