5150 Business Strategy

Life in the Corporate Fast Lane and Still Remaining Intelligent

Archive for the category “Outside Articles”

I am Positive it Won’t Work or the Power of Groupthink

A long and tortured tale of a failed ERP implementation at a large architectural firm headquartered in San Francisco.

pospiss1The best moments are only available upon reflection as at the time it was a period of total lunacy in my career. Dominated by a culture so dysfunctional that it allowed $5.0 million plus to be pissed down a hole. Of course, I was painted as the dysfunctional one since, as the SF Regional manager, so astutely told me during one discussion, “You need to be positive about the ERP implementation!”, in her chirpy upbeat way. To which I replied, “OK, I am POSITIVE this implementation will fail”. How is that for being positive. This was several months into an implementation that saw us christening the project management module of the software as “Project Uranus”. Very appropriate, given that you could stick this software up “your anus” since it was never going to work.

Talk about swimming upstream, every person on the project team fell in line behind the founders son in proclaiming that the software implementation was going to be a success. This against every single indication that it was failing. A countdown clock to the “go live” date was established so everyone could eagerly await the dawning of the new day for the firm. It was a joke of huge magnitude which only I could see.

Everything was done according to the book to insure success – a focused evaluation and implementation team was formed that included outside consultants, outside accounting firm, and representatives of other firms. The consortium of outside keefe031607firms was a who’s who of the architecture industry in the United States. It was impossible to fail, or so some in upper management thought. With so much brain power, and I use the term lightly, there was no way that we could go down the wrong path. The problem was that, to a person, everyone on the implementation “team” had no facility for independent thought and/or it was not in their vested interest to buck the trend if it would be perceived negatively. The prodigal son made it clear that what he wanted is what would be chosen and implemented, regardless of whether it would work – everyone was to MAKE it work, or else. That was the environment which caused everyone to fall in line and follow each other over the cliff even though it became a forgone conclusion that the implementation was going to fail. Questioning the decision was a career limiting move or it would cost the outside consultants their fees.

I recall one meeting held in a large conference room when things were already going sideways in which everyone formed a circle to encourage openness and unity, LOL. Did I mention this firm bought into, and probably still does, buy into every management craze that happens to be in vogue. Doesn’t matter whether the latest trend works, just that we did them so we showed our intellectual prowess, again LOL. They were high on appearance but low on execution – they had not figured out that without execution the latest theories are nothing more than opiates for the masses – we are doing OK because we are doing what everyone says is right!! I digress, we are in this room in a circle and the prodigal son goes around the room one by one and asks each person to give their impression of where the project stands. Remember, this was to be his way of getting to the truth of the situation, whether his belief that things were OK could be validated by the assembled “experts”. I am standing next to one of the founders of the accounting firm we utilized at White-liesthe time, he leans over and whispers, “..this is a cluster fuck”. I nod my affirmation that, indeed, this is an exercise in stupidity as not one person uttered what was overwhelmingly the only conclusion a sane person could come to – the ERP system chosen was a complete failure and would never work. It was as clear as the nose on everyone’s face but no one wanted that nose cut off by the prodigal son, easier to go with the flow over the cliff and over they all went. All telling little white lies to keep their positions within the firm intact. Several went on to become principals in the firm when they rightly should have been terminated for gross negligence. Nothing so harsh – they were “team” players, no matter they cost the firm $5.0 million as the culture of this firm was better to go along with the dysfunctional behavior because that was part of our culture, and our culture is what got us here. Whacked.

To this day I gag every time I see quotes from senior managers of this firm, or in particular the ex-CEO, who speak authoritatively on management theory or techniques. Unless they have somehow pulled their heads out of their asses, which I doubt, their words of wisdom fall on deaf ears as experience has shown they lack the ability to execute.

Lesson Learned: without execution all the management theories are not worth the paper they are written on. Groups who are not empowered to speak freely are capable of tremendously stupid decisions. When the overpowering emphasis is on going with the flow there is real danger in going over the cliff.

Advertisements

I Don’t Give a Rat’s Ass 2

The partner of an accounting firm we utilized for the annual audit turned out to personify all that is bad in the public accounting world. He had his head up his ass and turned out to be a member of the whack pack. The bank that referred him to us turned out to be official members of the whack pack as well. This audit partner barely knew what work in process was all about but he pontificated as if he originated the term – can you say bullshitter.

I can only assume that the audit partner and the banker involved did not realize that accounting and finance required an affinity for understanding, not only numbers, but what drives the numbers. Neither could find their way out of a paper bag if it involved understanding what financial ratios were about or what they meant to a business in reality. To them the numbers were just numbers and the underlying processes were lost on them. Trying to work with them was a losing proposition. So, we showed them the door.

I was told by the auditor who we hired to replace the whack packer that it was the first time he had heard of an auditor being fired prior to finishing the audit engagement. In retrospect I should have seen it coming since the audit team was staffed with what appeared to be foreign nationals where english was a second language, along with contract auditors who were brought in to supplement this firms thinly experienced staff. In the interest of keeping peace I allowed the incompetence to go on for way too long. By the time I pulled the plug this whack packer had already done all his damage, or so I thought.

Enter the whack pack banker who chose to contact the newly fired auditor. Of course, if you fire an auditor there must be something wrong with the company versus something wrong with how the auditor is performing, right? Ignore the fact that we, as the banks client, had provided copious amounts of data to the bank and kept them in the loop throughout the entire relationship. Another example of supposed professionals not understanding the parameters they are charged with monitoring. The extent of their understanding was that debt to equity should not exceed 3.0. Ask them what might drive debt to equity and their eyes would glaze over and the response was ,”..we only know it should not exceed 3.0, don’t question our requirements”. Head up ass syndrome.Completely clueless.

According to the auditor and the banker we were on the edge of failure, had no future, and the doors would be closing. Funny, three years down the road and the business is thriving. What gives? What gives is that nothing these whack packers predicted through their great expertise came to pass because they were wrong, wrong, wrong. Wow, what a surprise – auditors and bankers who are clueless. Unfortunately, it is not an isolated incident – incompetence in critical positions which influence the future of businesses is far too common.

I still remember the whack pack auditor and our last meeting where he declared that, “.. your charts and tracking are bullshit” when it came to identifying financial trends. Well, Einstein he was not as the benchmarks we utilize have proved to be invaluable despite this whack packers pronouncements. He was so convinced that all the accounting processes we had in place were deficient – funny, seems like his skills were the only thing deficient as the auditors we brought in to replace this numb nut found no deficiencies. Say what!! Of course this is the same numb nut who refused to work on the account because we had not paid his firm as per the terms. I pointed out that he should review the executed contract and, guess what, we were in compliance. This was typical of his incompetence. Adios, dipshit.

Similarly, the bankers thought we were too deficient to be granted lines of credit. We were schmucks that would be destitute in very short order. WTF, we not only got a larger line of credit but better loan covenants as well when we kicked them to the curb. Tell me it ain’t so Joe DiMaggio. How can this be?? It can be because incompetence appears to know no bounds, it pervades organizations at every level and can be devastating to a business. Luckily the “I don’t give a rat’s ass attitude” allowed us to persevere and rise above the whack packers.

Note: a good audit firm works with you to get the job done, not against you. They understand the inherent limits in working in the real world that prevent following accounting rules to the “T”. The same goes for a good banker, they work with you and understand that the world businesses operate in is not perfect – not everything happens as scheduled.

Lesson learned: don’t let the whack packers get you down. Make changes as necessary until you find the relationship that works for all parties involved. Jettison those who lack the intelligence to understand the realities of the environment your business operates in.

Accept the Job Offer or Walk Away? – Amy Gallo – Best Practices – Harvard Business Review

Many times the first question is: Should I waste my time on even talking to this company? It is amazing that a company who searches you out acts like you should drop everything to work for them!! If you have gathered experience which adds value to the position why settle for less and why waste your time with mediocre?

This happened recently with a large architectural firm in Missouri who was looking to replace their CFO. You hear all the usual – this company is on the cutting edge, they want to step up a notch, etc., etc. Just so happens I knew this firm from previous experience and was not “sold” on how cutting edge they were. Similar thing with a firm located in San Francisco looking for a Chief Accounting Officer. Many firms know how to “talk the talk” when it comes to embracing change but there are few who “walk the walk”.

It is always interesting to go on an interview and find that a company does not really want to go to the next level. They are perfectly content in believing their version of reality is the best. Having seen enough of what is out there it is clear that the bar has been drastically lowered. It is not hard to be better when the next rung down is rock bottom.

Following is good article if you get past the histrionics, get an offer, and then have to decide whether to accept:

Accept the Job Offer or Walk Away? – Amy Gallo – Best Practices – Harvard Business Review.

Sometimes it is better to not even engage in the dialogue.

Lesson Learned: If you have been down so long, it looks like up to you.

Post Navigation