As a leader, I have been on a LEAN journey for a number of years. But it was only within the last 12 months that I have been exposed to the concept of LEAN accounting. As my interaction with other LEAN leaders has intensified, I have started to ask the question, “Are you doing anything with LEAN in your accounting area?” And, almost without exception, the answer is “no,” or “not yet.” However, this isn’t surprising, as had you asked me the same question just 6 months ago, the answer would have been identical.
My role at Cambridge is unique in that, as COO and CFO, I have a leadership role in both operations and finance. In the world of LEAN, the operations folks are generally the most rapid implementers. This has been true in our case, and most of my LEAN learning has been on the operations side of the business. However, once I was exposed to LEAN accounting, it became clear to me that, absent considerable leadership changes on my part, I was going to quickly become a liability, vs. an asset, in our LEAN efforts. The reality is that any LEAN journey that does not include the accounting and finance areas of an organization is bound to be severely limited in its ability to deliver on all of the wonderful promises of LEAN. The experts in this area like Brian Maskell, Jean Cunningham and Orry Fiume are all passionate in their pointing out that traditional accounting does a poor job of accurately reflecting a company’s financial performance. And that when a company decides to truly embrace LEAN principles, the financial executives are frequently not prepared for how these principles will impact their areas of responsibility. However, this lack of awareness is not the worst part. They point out that the lack of preparedness in the accounting and finance roles will actually HINDER the pace and effectiveness of any LEAN initiative within an organization. So, the obvious question is “Why?” Why do financial executives so frequently find themselves following, rather than leading, during a LEAN initiative? Has your company implemented LEAN in the finance/accounting area? If not, why not? This is intended as the first of a series of blog posts that consider the leadership characteristics that, I believe, are required for a financial executive to move from following to leading a LEAN transformation. Or, at a minimum, if not leading, then acting as a key participant in a LEAN leadership team. First up in the next post…HUMILITY.