The most disappointing aspect of Lean Accounting is the tendency of many managers to skim over the part of Simple Excellence that says decisions are based two thirds or more on common sense, core values, wisdom and experience, with numbers a minor consideration. The tendency is to simply replace the old accounting numbers with a new – Lean Accounting – set and continue along the path of trying to run the business by the numbers.
Management by the numbers, no matter the source of the numbers, is a losing game. The cost of anything, the right lot size to produce, whether a new machine is a good investment, whether something is close enough to specifications, and how much of a raise or bonus to pay someone cannot be boiled down to a mathematical equation. The correct answer is different every time the decision is faced. The correct answer is always ‘it depends’; and it comes down to smart people who know the values, strategy and objectives sorting through all of the available information and selecting the right bits of data upon which to base a decision.
Perhaps most foolish of all is the idea that “Companies” can “Trade in Hunch Hiring for Computer Modeling“. There is no skill in any business that cannot be trained into an employee – but teaching respect, core values and how to interact with others is almost impossible to teach someone who has not had those traits instilled in them from very early in life.
“Data show that creative types tend to stick around for the necessary six months. Inquisitive people often don’t.” What??? People who ask a lot of questions don’t stick around – so we should use computers to sort out and make sure we don’t hire any such folks??? On what planet does that pass the common sense test? Seems to me that, if inquisitive folks don’t stick around we shouldn’t avoid hiring them – we should try to figure out why the answers to their questions lead them to decide to work somewhere else.
You can’t use a computer to sort out good people from bad. That’s absurd on its face. “Spending on so-called talent management software rose to $3.8 billion in 2011.” That strikes me as $3.8 billion of pure waste spent by managers trying to duck responsibility for the most important decisions they are tasked with making. Cultural fit is the most important element of a hiring decision – and that can’t be programmed into a computer any more than it can be the basis for marriage decisions. There is a good reason why people date each other for two years or more before they get engaged – and still end up in divorce court almost half the time. There is a reason why eHarmony uses the computer to determine who you should date – then the personal interaction kicks in to decide whether to pursue the relationship further.
It seems ‘management’ is the never-ending quest to have computers take the risk out of management decision making … to find the extensive enough, comprehensive enough, sophisticated enough algorithm to have a computer do the tough work of making difficult decisions – or at least being able to blame the computer and the numbers for bad decisions.
The most important decision management makes is hiring the right people. The product of those decisions is the culture of the organization. Success is the result of hiring the right people and putting them in place to make decisions – myriad small ongoing decisions. Turning the hiring decision over to a computer – especially a computer programmed to weed out the inquisitive ones – is a singularly dumb idea and a formula for disaster. There is no substitute for a good manager looking someone in the eye and taking the measure of that person, then betting the future of the business on the opinion formed as a result of that good, long look.