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 a compelling book, The Three Laws of Performance,10 that explains why so many change initiatives have failed. The first law is “How people perform correlates to how situations occur to them.” The writers point out that the organization's “default future,” which, we as individuals just know in our bones, will happen – will be made to happen. Thus, in an organization with a systemic problem, the organization's staff will be driven to make initiatives fail so that the default future prevails.
They went on to say that is why the more you change the more you stay the same. The key to change is to recreate, in the organization's staff minds, a new vision of the future – let's call it an invented future.
Zaffron and Logan signal the importance of language (the second law), without language we would not have a past or a future. It is the ability to use language that enables us to categorize thoughts as either the past or the future. Without language we would be like the cat on the mat, sunning itself for yet another afternoon, thinking about the next meal but without the ability to process complex thought.
They then say in order to make change, we need to use a future-based language (the third law). It is interesting; if you listen to the outstanding orators of the past such as Sir Winston Churchill, you will hear future-based language at work. These great speakers knew, intuitively, about the power of future-based language.
We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender.
HARRY MILLS
Harry Mills, a multiple business book author, has written extensively about persuasion.11 In his recent work, The Aha! Advantage,12 he talks about the significance of self-persuasion.
“Self-persuasion is fundamentally more powerful than direct persuasion essentially because of the way it reduces resistance.”
Mills talks about the four faces of the Aha! moment, as shown in Exhibit 2.1, the point when your audience gets the message and now persuades itself to adopt the message as if it was their own.
EXHIBIT 2.1 The four faces of the Aha! moment
Source: The Mills Group
Mills' work is very consistent with Zaffron and Logan. We need to get the staff in the organization to have for themselves that Aha! moment, that “Hell, no! We do not want the default future.” When the staff come to this point, change is inevitable.
This means we need to structure our workshops so there is more involvement, more chance for staff to have that Aha! moment, and less dogmatic rhetoric about the facts.
JOHN KOTTER
In 1996, John Kotter published Leading Change,13 which quickly became the seminal work in the field of change management. He pointed out that effecting change – real, transformative change –