I recently gave a draft business case to a CFO. He immediately thumbed through to see what the cost of the project was. “Aren’t you interested in the value?” I asked. “No, I don’t believe in benefits claims!” he replied.
Is the CFO Part of the Problem?
In another case we gave an ex-CFO, now CEO, a document at the end of an assignment. He immediately went to the last page to see what the cost would be. The document had no cost as it was pointing out how the CEO’s performance measurement system negated any attempts to improve the organisation and suggesting some changes to allow effective change. He refused to change anything but still expected his staff to embrace change.
When you think about it, most investment and project management processes are solely focused on ‘controlling cost’. Until we get away from this myopic concentration on cost, we cannot move forward towards maximising value.
In any profession you have a range of skill sets and competencies. Some accountants are only good for adding up numbers; others can run a finance operation and a few are great finance operators. In my experience it is only this last group that are interested in value; the rest are only interested in cost. (Many don’t even seem to understand the concept of ‘value’)
So, how do we change the attitude of a flexible(!) profession like accounting?
Any ideas? Please post your comments below.
© Jed Simms, Australia 2009