Next week it will be one year since I first heard from a mega-giant, multi-national company everyone has heard of with a few questions about lean – and lean accounting in particular. They had heard of some of the work I had done with a few other companies in very similar industries, and those companies are enjoying a lot of success. It is important to point out that these guys are in trouble – which is why they called. The phone call ended with them wanting to find a time when they could get their top six or eight accounting people on the phone for a conference call so they could better understand lean accounting.
It took exactly four weeks for their accounting people to collectively find an hour. Another four weeks after that, they got back in touch with me to further explore whether they were interested. By this time the Lean Accounting Summit had come and gone and the two months since we began talking was not enough time for them to line up anyone to attend.
The story goes on and on, with the bottom line that, after going back and forth in slow motion with dozens of emails and a half dozen phone calls for ten months, they decided that they do not want to learn about lean accounting, and they opted to engage McKinsey to help them with a new strategy instead.
Note that all of this was not to decide whether to engage me to do anything but come in and give them a one day seminar on lean accounting - a few bucks (I work cheap) and a day out of their lives. They decided that learning was not a solution to their problems – they altready knew all there is to know about accounting. The problems they had a year ago are worse today, but I suspect that announcing a major initiative with a big name consultant to impress Wall Street was their primary objective, and actually doing anything much different was not something in which they are particularly interested.
This company is a smaller one that caught wind of lean accounting as a result of a talk I gave. They called me to learn about it and wanted me to come in for the same education I offered to Company #1. After the conversation we swapped emails for a day or two, and picked a date two weeks later for my visit. Less than a week after the visit, their controller sent me a couple of spread sheets on which she had broken spending and revenues down by value stream, and had taken her first pass at segregating value adding and non-value adding expenses. We passed the spread sheets back and forth for a couple of days, and four weeks after the first call they were launching a new cost reduction plan, changing course from worrying about labor to getting rid of the waste; and they were planning a new course of sales and marketing action to use a radically different pricing strategy to take advantage of a lot of idle capacity.
Company #1 is loaded with very well-educated and experienced talent. The folks who met, discussed, contemplated and did nothing for almost a year have great resumes and make a lot of money. The boss at Company #2 is an engineer who was brought in to run things by his older relatives who own the business, and I imagine the controller has dreams of living and working her entire life in the same small town in which the company is located. Company #2 also asked me if it was all right to have a guy from their local CPA firm sit in so he could support them in the future since he is local and cheap – fine with me since I am from far away and basically lazy.
So what are the morals of the story – which is not a particularly new one for me? Company #1 is like a lot of companies with which I have dealt. They are big, bureaucratic, unwilling to learn, and doomed to extinction – even though their leadership is smarter, more experienced and much better compensated than the vast majority of manufacturers. Company #2 is less educated, less experienced, much less well compensated, but long on native common sense and willingness to work, and absolutely committed to the long haul, to the community and to each other. They are already showing signs of serious improvement.
So draw your own conclusions about the relative importance of resume qualifications versus character, and the strategy versus culture.