Thursday, August 23, 2007

What is the real impact of accounting on business?

Here is a quote from 'Tom Peters' True Confessions' [fascinating article for any fans of his] on FastCompany, which sums up very nicely the unquantifiable impact that accounting can have on an organisation -

"Who else? I was supremely pissed off at Robert McNamara. McNamara had been an assistant accounting professor at Harvard Business School. Somebody hooked him up with General Curtis E. LeMay, who was running the U.S. Air Force. The way I remember the story, LeMay didn't know how many airplanes he had or where they were parked. So McNamara the accountant figured out how many planes there were and where they were parked, and he put together a report for LeMay. All of a sudden, where there had been no systems, McNamara introduced systems. Terrific. That makes McNamara the Peter Drucker of the Pentagon -- because Drucker had done the same thing for big companies. But by the time the Vietnam War came and McNamara was secretary of defense, the systems had completely taken over. People were driven out of the equation. McNamara introduced the tyranny of the bean counters. So Robert McNamara was the enemy."

Accountants are notorious for only taking into account the Rand [Dollar] value of anything when making decisions. I disagree with this approach entirely - just because there are some things you can't measure, it doesn't mean they don't exist.

Spending much of my working time in a creative environment [and having been trained in an accounting one], I've been challenged with a similar question lately: how do you balance ENERGY and EXCITEMENT with structure and governance?

Well, I'm searching daily, and I'll be sure to post any breakthroughs [although at this point, there still seems like a long way to go to finding an answer]. But with organisations such as Virgin finding a way to make business fun, we can be sure the answer is out there!

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