How Engineers and Accountants Wreck Businesses
Firstly, I need to make two things clear:
- I’m an Engineer and have run businesses
- I’d struggle to do this without a decent Accountant
So what’s the fuss? Well it’s actually not to do with Engineers and Accountants per se. It’s very much about the kind of discipline and thinking that they can bring to organisations unless their appreciation of how organisations work has been greatly broadened through experience. The kind of thinking I’m referring to is maybe best summarised by Maslow – of Pyramid fame – who said:
“If all you have is a hammer, everything looks like a nail”
What can Engineers and Accountants get wrong?
Engineers learn how to make machines and structures using the laws of physics. (I know this is a very incomplete definition but it will do for now). So if this is all they know, they will tend to model and perceive an organisation in mechanical terms (or electrical, electronic, digital etc.). Accountants tend to model organisations, particularly businesses, in financial terms using balance sheets, profit & loss and cashflow. Many decisions are taken on the basis of a spreadsheet and, in some cases, quite rightly. However, reducing a business to a well-oiled machine or a well-crafted spreadsheet will eventually become unstuck, in spectacular style, for two simple reasons:
1. The Environment in which the ‘machine’ operates is not predictable
2. The Elements of the ‘machine’ are unreliable and emotive
The Environment is the world outside of the machine, such as the economy with its social, political, cultural and economic variables, and competitors with their annoying ability to innovate well, to market effectively, to steal your customers and recruit your best people. Little of this can be modelled accurately, nor is it predictable with much certainty. The fundamental Elements of any business are its people. These too are unpredictable, fickle and chaotic. As Henry Ford said:
“Why is it every time I ask for a pair of hands, they come with a brain attached?”
I suspect he might include heart, soul, ego and will, if he were still around.
So any business that employs people and operates in the real world, simply cannot pretend to be a machine or a spreadsheet.
Here are some of the things that directors say when they take a mechanical approach to organisations:
- Employee Engagement? – that’s HR’s responsibility…
- Don’t bring me problems, bring me solutions…
- If you can’t measure it, it doesn’t matter…
- The figures speak for themselves…
- Focus on the outcomes and the rest will follow…
- Up the bonuses and we’ll get more sales…
- Once everyone knows what to do, I can leave them to get on with it…
All of these mind-sets are symptomatic of a simplistic and reductionist approach to business.
A simple example of how the relationship between cause and effect can be non-linear and counter-intuitive lies with pay and remuneration. The mechanistic received wisdom is that the more you pay, the more you get in return (peanuts, monkeys?):
When Andy’s boss decided to give Andy a rise he reckoned it would help keep the headhunters at bay and prevent Andy from leaving to go elsewhere. He felt it was well-deserved, particularly since Andy had been doing great work for the past 7 years.
The strategy was initially successful – Andy could now no longer afford to leave the company and stayed put. But what Andy really wanted was a new challenge in a different environment – something his boss couldn’t offer. So the initial elation of more money soon changed to a feeling of being trapped. Something had to give and it did: Andy’s commitment, work ethic and performance. Eventually he left anyway.
And all because…
The ‘secret’ to building a highly successful business does not lie in logic or objective solutions, important as they might be. Instead, it’s somewhere out there in breadth of thought process, emotional intelligence, intuition, subjectivity, creativity and compassion.
Share this post:
Never trust a slick presenter