Culture has become an easy explanation for organizational problems that seem impervious to correction. Unfortunately, consultants assume, because anthropologists seek commonalities that characterize cultures, that different cultures will respond to the same influences in the same ways. They argue an approach proven in one company will work in another.
The two places I worked where culture consultants were hired had serious safety incidents while I was employed. Their responses were very different. At GM, three men wore safety harnesses to work on a roof on a weekend. One slipped over the edge; his weight pulled over a second man. The third managed to save himself, but the others died.
When I came in Monday morning, the news left a collective sense of being kicked in the gut. It created one of those cracks in time when, for a brief moment, people relieve their anxieties about dangers of the job by talking about previous accidents. No doubt, investigations were done, but those of us who had no direct involvement heard no more. It wasn’t covered up, so much as handled by the appropriate people.
At the last place I worked, an electrician drilled into conduit protecting live wires and survives in a vegetative state. People heard the news with the same detachment they exhibited when they heard the name of the person killed in the morning commute. It was personal: if one knew the man or his family, the response was sympathetic; if not, it was simply news.
A few weeks later, my supervisor told me we were in trouble because our customer’s customer was angry at being embarrassed by questions about the electrocution. When that was followed by other serious incidents, our customer had all its employees and subcontractors watch videos by the accident investigation teams.
Embarrassment is a social response, not an empathetic one. At the GM plant, everyone immediately sensed the horror of the accident, but was not involved in the investigation. At the other place, few were touched by the accident, but management involved us all in its aftermath. The first was a spontaneous shared cultural emotion, the other an imposed social experience.
GM plants hired consultants to address quality problems because it was suddenly less competitive; the other hired them to change the safety culture to counter bad publicity. GM is a conformist environment. No new car ever made it from the drawing board to the showroom without many people working together over time. In my last job, our customer succeeded on the work of talented individuals who had team support, but each team member was biding his or her time until he or she could lead his or her own team to make his or her own contribution.
Problems in the one place were seen as having group solutions; when men groused privately, men on the line blamed engineers, who blamed bean counters, who blamed the next group, and so on up the organization, until the unions were blamed. At the other place, the problem would always be traced to a single individual who needed to be punished. Any patterns in problems were dismissed as coincidence.
The GM plants hired trainers to help small groups think differently about something employees recognized as critical. At the latter place, managers brought in consultants to change the ways individuals behave to solve problems many saw as peripheral to the company’s purpose.
At GM, quality training for salaried employees took a few hours on several days. At the other, all salaried employees sat through three consecutive days of safety management. The one accommodated attendees who still had regular work to do. The other preempted work. Many had to return to their desks and put in unpaid overtime to keep critical work flowing. Resentment existed before the first word was spoken.
The safety consultants took the words "shared beliefs" as their gospel text, and suggested the way to deal with the culture problem was to break down barriers between groups by bringing us together in classes that deliberately mixed us with our customers, secretaries with managers. Much of time was spent in small-group, team building sessions whose only purpose seemed to be to stretch a thin presentation. They compounded their error when they included a video by a man who caused a refinery fire when he didn’t follow procedures.
Their solutions failed the common sense test. They suggested procedures for governing dangerous employees’ behavior, so it would be safe to work with them. Everyone who’d ever worked with such men had a simpler answer: keep them off my job. Customers would tell us people we could never send to their area again, and, no doubt, ways were found within the unions to isolate those seen as accidents waiting to happen.
GM is highly stratified, but its along class lines. It’s been decades since a man rose from the shop floor to the fourteenth, and many think people at the top are increasing isolated from the realities of the market. Still, it’s possible for the son of a union man to rise within the organization, to make a big jump in two generations.
My last employer had a caste structure. No one ever rose from a skilled trades job to a high administrative one; few children rose into the ranks of technocrats. Each layer drew its members from different schools, different communities. The only mobility was from the trades to low level clerical or technician’s jobs, or from high level technocrats to higher level administrators.
The consultants’ root problem was confusing anthropologists with sociologists, who would have identified groups then targeted training for them, thereby flattering their importance. Once the training was done with the wrong methods to solve the wrong problem, there was no way management could salvage the situation except to change its approach. Instead, it confused ego with effectiveness, and asserted it had to be right.
When security problems were perceived as analogous to safety ones, its only answer was to raise the stakes by bringing someone in with the directive to make it happen or else. That man left a meeting where he’d been humiliated by questions about security to hold a video conference for our customers and us. He berated us for an hour, but offered no analysis of our problems and proposed no solutions. When people complained about the style, his supporters said our expectations for common courtesy were part of the culture that had to be changed.
When our customer’s managers conflated two kinds of problems, the one critical to the survival of the organization, the other important but tangential, they doomed everyone, themselves and their employees, to perpetuating responses that didn’t work - more training met more resistence, resulting in more distrust and more frustration.
When new people come in with assignments to reform an organization, people want to know if they’re serious. GM asked "can he walk the walk?" At the more individualistic place, people waited to see if anyone was fired. Earlier, when a new man came into our subcontract and offered an open door, he got an earful, and responded he wasn’t just going to fire people. No one bothered him again.
When the customer did fire people, complaints increased because department heads were held responsible, not individual miscreants. When men actually went to jail, they were dismissed as rare bad apples, not genuinely representative of the organization. Then the man who instituted the removals was himself removed, because his tactics had further embarrassed his customer.
We were back where we started, with problems without solutions, but saddled with people vindicated by resistence to change. Within its closed world, our customer is like GM when it removed Robert Stemple in 1992, and like GM then it has an increasingly unhappy customer who will find other ways
Sunday, March 26, 2006
Sunday, March 19, 2006
Culture Consultants - Part 1 - Psychology
Consultants use the word culture to market their services. When I worked at General Motors in the 1980s, problems existed with quality and competitiveness; where I last worked, safety and security were impediments to survival. In both places, consultants convinced managers the problem was workers’ attitudes that could be altered with training. In both places, they failed. And, in both places, there were genuine problems that needed to be addressed that could, indeed, be traced to attitudes.
The problem with the proposed solution is that attitudes are as much psychological phenomena as anthropological ones. If we looked at Chernobyl, we would see safety problems that transcended the cultures of the United States and Soviet Russia, and might conclude the difficulty of following detailed instructions was something inherent in human nature. But, if we looked at Japan, we would see quality problems eliminated by social organization, and deduce culture moderated the influence of innate psychological responses.
When I was in school, our simple definition of culture was "shared patterns of human behavior and belief that were learned." Once analysts framed problems as anthropological ones, solutions followed from the word "learned." If consultants had framed them in psychological terms, they would have had to deal with motives or incentives. That is a far more complex problem to solve, and consultants who tried it years ago failed.
Before workers are going to accept they are the ones who need to adapt, they need to be convinced there’s a problem. It helps if they can believe in the proposed solution. We know from the disappearance of societies in the Easter Islands and Greenland that even in the severest crises, people may not recognize the need or human capacity for change, and will die to maintain cultural and personal consistency.
In the two GM plants where I worked in the 1980s, people did adapt Japanese ideas both because they feared their plants would close and because they knew who was more successful at selling cars. Their biggest problem was perpetuating their innovations. Over time, they had to accept workers from other lines who had not been part of the original experiment because they weren’t as amenable to correction but had seniority to bid when jobs opened.
The more serious problem was young managers. Those who came from other locations had no incentive to conform with unique demands of the plants. The formula for promotion was set outside, and meeting the plants’ requirements might hinder future advancement. Indeed, if a place did close, their only hope was applying to another, now suspicious corporate office.
In both places, many came to see demands for improvement coming from higher level managers who couldn’t sway their immediate subordinates and thus lost credibility. The question became "he can talk the talk, but can he walk the walk?"
It’s not enough to hire consultants. If a CEO wants divergence, he has to promote a plausible alternative. That’s not the same as sending top executives to some resort to wordsmith a mission statement. Indeed, if a company head knows what he wants, he doesn’t need anyone to tell him.
In 1980, Roger Smith had a vision for General Motors: compensate for problems from unpredictable customers and employees with automation; replace recalcitrant managers and workers with a new company, Saturn; reduce administrative costs by merging five brand names, two manufacturing divisions, and other autonomous groups into three integrated organizations.
As long as Smith addressed problems that were cultural and had clearly defined solutions, he had support. So many wanted to tour his joint venture plant built with Toyota at Fremont, California, it had to limit the number of visitors. When he turned to corporate bureaucracy, he made people apprehensive. Corporate folk wisdom passed through xeroxed graffiti warned the old and cunning would triumph over the young and talented.
Once his demonstration plant in Hamtramack disrupted a local community and he proposed transferring employees to EDS in 1984, the cultural problem became increasingly personal. The threat of economic loss, be it to an engineer or a Detroit area resident, no longer seemed worth the sacrifice after management bungled the introduction of the first car in years to excite customers, the 1984 Fiero.
Smith’s solutions became all stick and no carrot. When individuals’ psychological allegiance with established ways became stronger than with proffered change, GM lost the opportunity to modify its behavior. The other common piece of xeroxed graffiti in those years compared any new project to mating elephants, something that provoked a great deal of stomping and roaring and took many months to produce a small result long after the instigating male had disappeared.
When leaders who promote messianic change fail, those who reject the need for transformation become more entrenched. When Roger Smith retired in 1990, General Motors soon removed Robert Stemple, the man he’d named as his replacement, and sold almost everything he’d introduced.
Now, more than a decade later, the company faces potential bankruptcy, and top managers still think they can ignore suggestions from outsiders. Their best answer is to make investors happy by lowering costs by cutting production, but to satisfy themselves they continue what they’ve been doing in the remaining operations.
Those who recognize there are problems may feel doomed like Norsemen and Easter Islanders abandoned to a fate dictated by those who support the status quo and wonder what it will take to make people with power aware more is required when it’s never their jobs or benefits that are eliminated. Change is still all punishment and no reward.
The problem with the proposed solution is that attitudes are as much psychological phenomena as anthropological ones. If we looked at Chernobyl, we would see safety problems that transcended the cultures of the United States and Soviet Russia, and might conclude the difficulty of following detailed instructions was something inherent in human nature. But, if we looked at Japan, we would see quality problems eliminated by social organization, and deduce culture moderated the influence of innate psychological responses.
When I was in school, our simple definition of culture was "shared patterns of human behavior and belief that were learned." Once analysts framed problems as anthropological ones, solutions followed from the word "learned." If consultants had framed them in psychological terms, they would have had to deal with motives or incentives. That is a far more complex problem to solve, and consultants who tried it years ago failed.
Before workers are going to accept they are the ones who need to adapt, they need to be convinced there’s a problem. It helps if they can believe in the proposed solution. We know from the disappearance of societies in the Easter Islands and Greenland that even in the severest crises, people may not recognize the need or human capacity for change, and will die to maintain cultural and personal consistency.
In the two GM plants where I worked in the 1980s, people did adapt Japanese ideas both because they feared their plants would close and because they knew who was more successful at selling cars. Their biggest problem was perpetuating their innovations. Over time, they had to accept workers from other lines who had not been part of the original experiment because they weren’t as amenable to correction but had seniority to bid when jobs opened.
The more serious problem was young managers. Those who came from other locations had no incentive to conform with unique demands of the plants. The formula for promotion was set outside, and meeting the plants’ requirements might hinder future advancement. Indeed, if a place did close, their only hope was applying to another, now suspicious corporate office.
In both places, many came to see demands for improvement coming from higher level managers who couldn’t sway their immediate subordinates and thus lost credibility. The question became "he can talk the talk, but can he walk the walk?"
It’s not enough to hire consultants. If a CEO wants divergence, he has to promote a plausible alternative. That’s not the same as sending top executives to some resort to wordsmith a mission statement. Indeed, if a company head knows what he wants, he doesn’t need anyone to tell him.
In 1980, Roger Smith had a vision for General Motors: compensate for problems from unpredictable customers and employees with automation; replace recalcitrant managers and workers with a new company, Saturn; reduce administrative costs by merging five brand names, two manufacturing divisions, and other autonomous groups into three integrated organizations.
As long as Smith addressed problems that were cultural and had clearly defined solutions, he had support. So many wanted to tour his joint venture plant built with Toyota at Fremont, California, it had to limit the number of visitors. When he turned to corporate bureaucracy, he made people apprehensive. Corporate folk wisdom passed through xeroxed graffiti warned the old and cunning would triumph over the young and talented.
Once his demonstration plant in Hamtramack disrupted a local community and he proposed transferring employees to EDS in 1984, the cultural problem became increasingly personal. The threat of economic loss, be it to an engineer or a Detroit area resident, no longer seemed worth the sacrifice after management bungled the introduction of the first car in years to excite customers, the 1984 Fiero.
Smith’s solutions became all stick and no carrot. When individuals’ psychological allegiance with established ways became stronger than with proffered change, GM lost the opportunity to modify its behavior. The other common piece of xeroxed graffiti in those years compared any new project to mating elephants, something that provoked a great deal of stomping and roaring and took many months to produce a small result long after the instigating male had disappeared.
When leaders who promote messianic change fail, those who reject the need for transformation become more entrenched. When Roger Smith retired in 1990, General Motors soon removed Robert Stemple, the man he’d named as his replacement, and sold almost everything he’d introduced.
Now, more than a decade later, the company faces potential bankruptcy, and top managers still think they can ignore suggestions from outsiders. Their best answer is to make investors happy by lowering costs by cutting production, but to satisfy themselves they continue what they’ve been doing in the remaining operations.
Those who recognize there are problems may feel doomed like Norsemen and Easter Islanders abandoned to a fate dictated by those who support the status quo and wonder what it will take to make people with power aware more is required when it’s never their jobs or benefits that are eliminated. Change is still all punishment and no reward.
Sunday, March 12, 2006
Corporate Culture - Part 1 - Trickster Tales
Culture is one of those words loved by people whose only paradigm for beginning an essay or speech is tabulating the definitions they found in the dictionary. Far more interesting are the layers of meaning the concept has in reality
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The easiest corporate culture to identify is the one described by folklorists who work back from evidence to underlying causes. That is, they discover a collection of tales or anecdotes, sometimes called memorats, with shared themes or motifs, and then identify the characteristics of the people who’ve heard or repeated the stories.
The transformation of experience into art is rare, and I’ve only found one genuine folk narrative tradition. When I worked for a manufacturer of replacement windshields in the late 1970s, it was still run by the founder, then in his 80s, and simply called the old man. He was treated as a trickster.
During the annual physical inventory, I was told about the times he loaded everything into trucks and hid it in his barn to reduce the taxes he owed the state. When a strike was brewing, I heard about the time he laid everyone off the day before Christmas to exploit the contract clause that stipulates people don’t get paid for holidays if they don’t work the day before and the day after. When people complained he directed them to unemployment. The state was helpless and had to take over his payroll for two weeks.
I heard about his conflict with his daughter, whose husband thought he would inherit the company and worried her father’s erratic behavior would devalue the assets. During one confrontation, someone turned on the intercom and broadcast the family feud to the plant floor. It may sound like he was outsmarted, but the person telling the tale made clear who was still in charge and who had had to trim his ambitions.
The trickster didn’t just con the state, his family and employees. He turned his skills to compassionate acts. He didn’t like having to allow people the 15 minutes breaks mandated by the Department of Labor, so he hired a woman to walk through the halls with a trolley and coffee urn. The point wasn’t that people had no excuse to leave their desks, but that he found a way to pay Sophie, the widow of an old employee.
I was told the reason we had a chapel was to allow him to deduct the cost of his chauffeur cum chaplain. The point again wasn’t the tax scam, but that he found a way to support the Black driver.
Stories about the old man were widespread. Since it wasn’t the sort of company where a person could build a career, many people passed through. I not only heard tales in the office, but when I ran into people at professional meetings. The Detroit Free Press ran at least two long profiles of the old man in the 1980s, one when the business finally closed, and one when he died. They didn’t amplify the narrative tradition, but the length of their stories signified the man’s mythic status.
The reason these stories took form and were retold is they were part of a larger culture. I later worked for a company where the CEO cut everyone’s pay the amount of Ronald Reagan’s first tax cut, on the day the cut took effect. In effect, he left us where we were, and booked the gain. No stories came out of that plant. When others hear the story, it has no resonance. At best it’s an example of sharp practice, but not a folk tale.
The boss as trickster may be a fading tradition, but the place it survived was one conducive to the perpetuation of tradition. Shatterproof Glass existed on the outskirts of Detroit, near the border with Dearborn, close to an old Hungarian community. One can hazard guesses about the continuity of patriarchal society brought from the Austro-Hungarian and Romanov empires. However, by the 1970s, the young had abandoned the neighborhoods and any direct links would have been hard to establish.
Perhaps more important was the plant’s proximity to River Rouge where Harry Bennett used goons to intimidate Henry Ford’s work force. Before unions, many Detroit area plants were run by brutal superintendents, described as "ass kickers" by several I’ve talked to. Perhaps in the scheme of things, Shatterproof was a better place to work.
Moral ambiguities of industrial life are clearer when they appear in a single person like the old man, than in the Manichaean split between plant owners who found charities and their henchmen. Like most tales in the tradition of Br'er Rabbit, Shatterproof stories champion the use of intellect over force, and suggest ways to survive an irrational society.
Survival is the unifying theme beneath many stories, not just of the old man, but of the company itself. It’s plant building may have had most of its windows broken, but I was told it once housed the assembly line of Eddie Rickenbacker back when he experimented with automobiles. It may have been degraded as a pickle factory, but Shatterproof always bent a good piece of glass. The old man may have moved the plant to North Carolina, may have run it to the ground, but it was his to the end. Who could hope for more?
.
The easiest corporate culture to identify is the one described by folklorists who work back from evidence to underlying causes. That is, they discover a collection of tales or anecdotes, sometimes called memorats, with shared themes or motifs, and then identify the characteristics of the people who’ve heard or repeated the stories.
The transformation of experience into art is rare, and I’ve only found one genuine folk narrative tradition. When I worked for a manufacturer of replacement windshields in the late 1970s, it was still run by the founder, then in his 80s, and simply called the old man. He was treated as a trickster.
During the annual physical inventory, I was told about the times he loaded everything into trucks and hid it in his barn to reduce the taxes he owed the state. When a strike was brewing, I heard about the time he laid everyone off the day before Christmas to exploit the contract clause that stipulates people don’t get paid for holidays if they don’t work the day before and the day after. When people complained he directed them to unemployment. The state was helpless and had to take over his payroll for two weeks.
I heard about his conflict with his daughter, whose husband thought he would inherit the company and worried her father’s erratic behavior would devalue the assets. During one confrontation, someone turned on the intercom and broadcast the family feud to the plant floor. It may sound like he was outsmarted, but the person telling the tale made clear who was still in charge and who had had to trim his ambitions.
The trickster didn’t just con the state, his family and employees. He turned his skills to compassionate acts. He didn’t like having to allow people the 15 minutes breaks mandated by the Department of Labor, so he hired a woman to walk through the halls with a trolley and coffee urn. The point wasn’t that people had no excuse to leave their desks, but that he found a way to pay Sophie, the widow of an old employee.
I was told the reason we had a chapel was to allow him to deduct the cost of his chauffeur cum chaplain. The point again wasn’t the tax scam, but that he found a way to support the Black driver.
Stories about the old man were widespread. Since it wasn’t the sort of company where a person could build a career, many people passed through. I not only heard tales in the office, but when I ran into people at professional meetings. The Detroit Free Press ran at least two long profiles of the old man in the 1980s, one when the business finally closed, and one when he died. They didn’t amplify the narrative tradition, but the length of their stories signified the man’s mythic status.
The reason these stories took form and were retold is they were part of a larger culture. I later worked for a company where the CEO cut everyone’s pay the amount of Ronald Reagan’s first tax cut, on the day the cut took effect. In effect, he left us where we were, and booked the gain. No stories came out of that plant. When others hear the story, it has no resonance. At best it’s an example of sharp practice, but not a folk tale.
The boss as trickster may be a fading tradition, but the place it survived was one conducive to the perpetuation of tradition. Shatterproof Glass existed on the outskirts of Detroit, near the border with Dearborn, close to an old Hungarian community. One can hazard guesses about the continuity of patriarchal society brought from the Austro-Hungarian and Romanov empires. However, by the 1970s, the young had abandoned the neighborhoods and any direct links would have been hard to establish.
Perhaps more important was the plant’s proximity to River Rouge where Harry Bennett used goons to intimidate Henry Ford’s work force. Before unions, many Detroit area plants were run by brutal superintendents, described as "ass kickers" by several I’ve talked to. Perhaps in the scheme of things, Shatterproof was a better place to work.
Moral ambiguities of industrial life are clearer when they appear in a single person like the old man, than in the Manichaean split between plant owners who found charities and their henchmen. Like most tales in the tradition of Br'er Rabbit, Shatterproof stories champion the use of intellect over force, and suggest ways to survive an irrational society.
Survival is the unifying theme beneath many stories, not just of the old man, but of the company itself. It’s plant building may have had most of its windows broken, but I was told it once housed the assembly line of Eddie Rickenbacker back when he experimented with automobiles. It may have been degraded as a pickle factory, but Shatterproof always bent a good piece of glass. The old man may have moved the plant to North Carolina, may have run it to the ground, but it was his to the end. Who could hope for more?
Sunday, March 05, 2006
Takeover - Part 3 - Aftermath
In theater, when the curtain rings down on a tempestuous climax, it lifts again on characters transformed by the shock of experience. In our little corner of takeover land, life does not imitate art. The new fiscal year finds characters frozen in their poses. Those who got sick get sicker. Those who got angry get angrier. Those who were arrogant get ruder. Those who believed they were right become self righteous.
The accounting department’s cacophony increases when it implements a new release of its financial software. Since managers are still absolutely convinced their profit numbers were right in September, they reconfigure the system to produce more familiar results. They ask no advice from anyone who worked with the application before, since their reports had shown a variance and so they couldn’t have known what they were doing.
By the end of the first fiscal period, they manage to update the general ledger twice, but only write a few checks. The rest are written with backup software outside the system. Parallel books exist for the cash account – what’s in the bank, and what’s in the computer. The information systems department feels comfortable enough to lay-off the three remaining people who knew the old system.
In the meantime, the financial group has had lots of meetings with the customer to discuss the four million dollar deficit the previous fiscal year, and can still render no explanations. The customer patiently explains it’s expectations. Our managers naively believe it’s a growth experience for all, an exercise in cross-organizational management bonding. Networking. Top-down management mandated by Sarbanes-Oxley and the latest MBA program.
At the end of the second fiscal period, they can write checks in the system, but don’t know why a number of checks don’t post properly. The system simply fails to make one of the entries, so general ledger journals don’t balance. They find work arounds to force bad transactions through so the books can be closed for the period. One person makes one large entry with no reference to the generating transactions with the description "this entry’s junk." Another books to the wrong accounts.
Four weeks later, who knows what’s right. I look for offsetting accounts for checks and see only interim wash accounts. The system no longer generates half journals, although it still occasionally fails to make any entry at all. But transactions that require multiple entries, simply aren’t complete: checks are written, but accruals aren’t reversed, credit card purchases aren’t reallocated. To reconcile any of the accounts would take days, and make no difference to the final profit-loss numbers. Labor without benefit.
By the close of the next fiscal period, everything’s in the books, if not distributed between department cost centers. Most entries go to expense accounts that disappear at the end of the year; the important balance sheet looks OK. But the totals aren’t good enough and management finally acknowledges the customer is serious about cutting the money it’s going to spend with us. They eliminate 17 people, three in our department: a clerk who's been there 45 years, the assistant comptroller handling the budget, and me. They also tell the accounting manager who was supposed to implement the computer application she’s being transferred and demoted.
Our customers grumble. They don’t know what we’ve billed them. The one who has been trying to get accurate numbers for several months triggers more charades for managers who think going to meetings signifies their importance. They may have gotten an agreed upon method of communication. She can’t balance her budget; they underrate her importance because she’s a woman.
Another customer complains that when we change computer programs that send him that billing data, nothing’s tested until it fails. His operating costs are twice his budget and the overrun is from our errors. When he tells them they can’t just fire all the institutional knowledge, they shrug. They underrate his importance because he’s not an accountant.
Since our managers are so inherently rude, they mistake their customer’s innate bureaucratic courtesy for acquiescence. They aren’t privy to its fantasies that a way can be found to cancel the contract, that it only needs put up with us for a little longer. Our managers aren’t aware when the fantasies take on the credence of rumors and some state the imminent cancellation as fact.
How would our CFO and his assistant comptrollers know? They were brought here to introduce modern business practices, and obviously our customers are as archaic as we. Only two people with accounting knowledge from the old company are left, and the finance manager downgraded their evaluations. Since the takeover, six are gone, plus three more they brought in. Of the three clerks, one’s been riffed, one’s just given notice, and one’s still on maternity leave. Eleven new people know what to do. Just exactly what’s expected, and no more.
The culture change is complete. The new CFO’s in complete control. He always forgets sequels exist, and never grants his employees are Walter Mittys perfecting the scenario of his cashierment each time he walks by.
The accounting department’s cacophony increases when it implements a new release of its financial software. Since managers are still absolutely convinced their profit numbers were right in September, they reconfigure the system to produce more familiar results. They ask no advice from anyone who worked with the application before, since their reports had shown a variance and so they couldn’t have known what they were doing.
By the end of the first fiscal period, they manage to update the general ledger twice, but only write a few checks. The rest are written with backup software outside the system. Parallel books exist for the cash account – what’s in the bank, and what’s in the computer. The information systems department feels comfortable enough to lay-off the three remaining people who knew the old system.
In the meantime, the financial group has had lots of meetings with the customer to discuss the four million dollar deficit the previous fiscal year, and can still render no explanations. The customer patiently explains it’s expectations. Our managers naively believe it’s a growth experience for all, an exercise in cross-organizational management bonding. Networking. Top-down management mandated by Sarbanes-Oxley and the latest MBA program.
At the end of the second fiscal period, they can write checks in the system, but don’t know why a number of checks don’t post properly. The system simply fails to make one of the entries, so general ledger journals don’t balance. They find work arounds to force bad transactions through so the books can be closed for the period. One person makes one large entry with no reference to the generating transactions with the description "this entry’s junk." Another books to the wrong accounts.
Four weeks later, who knows what’s right. I look for offsetting accounts for checks and see only interim wash accounts. The system no longer generates half journals, although it still occasionally fails to make any entry at all. But transactions that require multiple entries, simply aren’t complete: checks are written, but accruals aren’t reversed, credit card purchases aren’t reallocated. To reconcile any of the accounts would take days, and make no difference to the final profit-loss numbers. Labor without benefit.
By the close of the next fiscal period, everything’s in the books, if not distributed between department cost centers. Most entries go to expense accounts that disappear at the end of the year; the important balance sheet looks OK. But the totals aren’t good enough and management finally acknowledges the customer is serious about cutting the money it’s going to spend with us. They eliminate 17 people, three in our department: a clerk who's been there 45 years, the assistant comptroller handling the budget, and me. They also tell the accounting manager who was supposed to implement the computer application she’s being transferred and demoted.
Our customers grumble. They don’t know what we’ve billed them. The one who has been trying to get accurate numbers for several months triggers more charades for managers who think going to meetings signifies their importance. They may have gotten an agreed upon method of communication. She can’t balance her budget; they underrate her importance because she’s a woman.
Another customer complains that when we change computer programs that send him that billing data, nothing’s tested until it fails. His operating costs are twice his budget and the overrun is from our errors. When he tells them they can’t just fire all the institutional knowledge, they shrug. They underrate his importance because he’s not an accountant.
Since our managers are so inherently rude, they mistake their customer’s innate bureaucratic courtesy for acquiescence. They aren’t privy to its fantasies that a way can be found to cancel the contract, that it only needs put up with us for a little longer. Our managers aren’t aware when the fantasies take on the credence of rumors and some state the imminent cancellation as fact.
How would our CFO and his assistant comptrollers know? They were brought here to introduce modern business practices, and obviously our customers are as archaic as we. Only two people with accounting knowledge from the old company are left, and the finance manager downgraded their evaluations. Since the takeover, six are gone, plus three more they brought in. Of the three clerks, one’s been riffed, one’s just given notice, and one’s still on maternity leave. Eleven new people know what to do. Just exactly what’s expected, and no more.
The culture change is complete. The new CFO’s in complete control. He always forgets sequels exist, and never grants his employees are Walter Mittys perfecting the scenario of his cashierment each time he walks by.
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