Doubting Thomas

by Tom Pryor

I have been called many names during my life. I was called "Beancounter" at Johnson & Johnson because of my pursuit of accounting preciseness. Later in my career, a Motorola VP of Manufacturing nicknamed me "Herbie", one of the characters in the popular book THE GOAL. The VP was accusing me and the cost system as the bottleneck in the advancement of Total Quality Management. He was correct. But there is one name I've never been called… Doubting Thomas.

Thomas, one of the twelve disciples, was a cynic. "Unless I see the nail marks in His hands and put my finger where the nails were, and put my hand into His side, I will not believe it." (John 20:25) My Thesaurus includes "Doubting Thomas" as an alternative to the word skeptic, which is a synonym to cynical. Thomas did not believe what the other disciples told him. He had to see it to believe it.

Every cynic that I've ever met believed that they had everything figured out. So did Thomas, until Jesus confronted him after His resurrection. It is easy to get cynical about new and improved methods in the workplace. Lies often sound like the truth. And truths often sound like a lie.

Lies that sound like the truth

1. "ABM will be considered a success if we complete the project on time."
   This is a lie that sounds like the truth. While meeting a target date is desirable, there are much more important objectives. In his new book HIGH IMPACT CONSULTING Robert Schaffer states that a project cannot be deemed successful unless "the consultant provides a solution to a problem, not a just a new tool, with measurable results that can be sustained by the customer after the consultant leaves."
2. "ABM is a new accounting system."
   This is a lie that sounds like the truth. Most accounting systems are in compliance with external rules and regulations. The need for more relevant and accurate decision-making and cost improvement information is an internal need of non-accountants. While accountants have a role in implementing an ABM/ABC system, non-accountants will be the primary users of the system.
3. "There is a lack of supply of students with ABM/ABC knowledge."
   Wrong again. The problem is not lack of supply. Instead, it's a lack of demand. Students need to be encouraged, equipped and empowered before they will demand or want ABM knowledge. Dr. Sidney Baxendale, University of Louisville, explains his innovative solution to increasing the supply of ABM students in the Jan/Feb 2000 issue of the Journal of Cost Management. The first half of the course is textbook learning. The second half is a company-classroom partnership where students go out into the community and implement ABM/ABC in an actual company. It has been a fantastic success.

Truths that sound like a lie

1. "We can lower cost by adding headcount."
   This is a truth that sounds like a lie. Many organizations have found that adding resources to an activity or business process often results in a lowering of the cost per output. Traditional accounting measures the amount of resources management has given each department or function. ABM measures what they did with those resources.
2. "ABM training will have a measurable payback."
   Again, this is a truth that sounds to good to be true. But true it is. Adults learn best by applying what they've learned. For example, during ICMS' ABM Boot Camp© people learn ABM principles and techniques in 90- minute sessions immediately followed by application of the methods in an actual department (cost center). Savings greater than the training cost are always achieved.
3. "Software selection is not the most important ABC decision."
   Another truth that sounds like a lie. I have visited this past year with companies that have spent from $50,000 to $5,000,000 on Activity Based Costing systems, with no measurable benefits. Our culture has become too reliant on technology as the solution to our problems. Software can be both a cure and a curse. One ABC software vendor advertises "ABC is the answer. Now what's the problem?" Make sure that you define the problem you need to solve before you answer the question "Which ABC software should we buy?"

It is often said that familiarity breeds contempt. Well, something else it breeds is ignorance. One of the reasons that I have never been called a Doubting Thomas is because of my daily commitment to learning. I read a book each week. (Click here for some of my favorites). I ask questions and listen to mentors. I have a daily quiet time. I encourage you to take a fresh look at your beliefs, both personally and professionally. Sort out the lies that sound like truths and the truths that sound like a lie. I have no doubt that you and your organization will be much better for it.

Send comments about this article to Tom Pryor at TomPryor@icms.net. Or, call ICMS to talk to someone about your ABM needs... (817) 483-6511.

If this article has inspired you and your organization to cut costs this year, call us at 817-475-2945, or e-mail your needs to tompryor@icms.net.

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