Thursday, September 15, 2011

Beaning the bean counter

Have you ever been tempted to strangle your CFO? Desist. Instead ask your CFO to read Everything You Know About Business is Wrong and to start practising it. If he fails to do either, you can justifiably strangle him.

Alastair Dryburgh, of course, intends his book for a general corporate audience – not just for people in Finance – but his own training as a chartered accountant, followed by years of experience in the commercial functions, makes him particularly adept at identifying the sclerosis a traditional accounting mindset can bring to the best of organisations. Dryburgh displays a practitioner’s insight when he identifies the tension that exists between a Finance Director’s job as Head of Control and Compliance (“Produce the basic accounts. Make sure customers pay when they should. Prevent people spending money they shouldn’t …”) and a Finance Director’s job as a Business Partner (“How can I help this organisation make more money?”). Most of the shibboleths Dryburgh trashes are associated with atavistic accountants but that does not prevent his treatment from being amusing and instructive for the general business reader.

Take, for instance, the first commandment of the accountant’s Decalogue: to cut costs. Dryburgh demonstrates, with logic and illustrations, why making a religion of cost-cutting is not only an inadequate answer to the fundamental question of how to improve profits, but is in fact frequently counterproductive for meeting the goal of raising profits. As Dryburgh puts it, “… getting rid of the corporate jet is … cost saving. Reducing capital expenditure or research and development is sacrificing the future of the company to the immediate short term.”

Full report here Business Standard

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