by Tom Pryor
If you had my wife as your boss, you would have improved your cost management system years ago. You see, Sue's not one for accepting excuses or procrastinating. She could have been Nike's inspiration for "Just Do It."
When it comes to improvement, most of us "delay" instead of "do". "Today we have a generation of men who suffer from 'loser's limp'." says Tony Evans in his book No More Excuses. "Anyone who has competed in sports knows what I mean by 'loser's limp'. It's what happens when an outfielder misjudges a fly ball and misses the catch, or when a wide receiver drops an easy pass. They fall to the ground and get up limping. The purpose of the limp is to camouflage their failure."
A lot of managers have developed a "loser's limp" when it comes to improving their cost management system. Some managers drop the ball by continually deferring or ignoring Activity Based Management (ABM). And those that have ABC software models misjudge the urgency to train non-financial employees how to use ABC data for ABM cost improvement.
Why do managers procrastinate?
- Fear of method ... Some managers incorrectly assume that ABM is a new, untested method. While ABM may be new to you, it is in fact a sixteen-year-old, proven methodology used by manufacturing, service and governmental organizations of all sizes.
- Fear of failure … This actually is the fear of failing to meet your own, possibly unrealistically high expectations. Even when implemented in its simplest form, ABM reports provide valuable new insight to cost improvement opportunities.
- Fear of implementation … Many managers are afraid of ABM's implementation cost or time commitment. In reality, several low cost, timely implementation options exist. For example, ICMS offers self-implementation toolkits. And if you have little or no time, consider using a local college student to implement the toolkit.
- Fear of success … Some managers avoid success in order to maintain the status quo, e.g. "If I give activity accounting reports to my employees, then I'll be forced to make some changes to the business." The first step towards improving your P&L is admitting that you need to improve it.
- Fear of training … Thousands of talented financial managers with ABC software models feel ill-equipped to train non-financial employees how to read, interpret and use the ABC data. Postponing ABC training constrains cost improvement.
- Fear of surrendering control … Every deadline missed is a battle won in the war to maintain absolute control of your business. Continually postponing an analysis of your overhead cost (ABM) and product line profitability (ABC) is a subtle way of saying, "See, I'm really in control." Are you afraid that ABC may show your favorite product, service or customer is a big loser? Or are you afraid of admitting that you don't know everything there is to know about ABM?
Leap
instead of Limp
We need to start looking at obstacles as opportunities
for success rather than as excuses for failure. Alejandro Garcia had numerous
excuses he could have used to postpone ABM at Camionera del Golfo, S.A. de C.V.
… he's the budget manager not the cost manager, ABM books and software were
in English instead of Spanish, and senior management would not fund the purchase
of software or consulting services.
Alejandro was committed to leaping those obstacles. To begin he entered ICMS' June 2000 free software contest … and won! Using the ABM Toolkit he received from ICMS, Alejandro successfully self-implemented in less than eight weeks. In a September 2000 letter he excitedly shared, "Now we are beginning the product costing to present an ABC Profit & Loss report. CMS-PC 4.0 brings all the information to make it! We are planning to present our results to the corporate CEO in October 2000 and start with the continuous improvement in all the ADO Group!" Your obstacles may differ from Alejandro's but your solution can be the same … leap, don't limp.
Happy
wife, Happy life
These four simple words
have served me well for 31 years. If Sue's happy, we're all happy. For the past
year I've offered some pretty lame excuses as to why I can't lose some weight,
e.g. I can't eat right on airplanes, it's too hot to exercise, my foot hurts.
So much for my Loser's Limps. What are yours? I've scheduled a comprehensive physical
at the Cooper Clinic & Aerobic Center in Dallas. And I've asked my accountability
partner to help me keep my commitment to improve my health. Join me. Stop procrastinating,
professionally and personally. Let's not limp into the 21st century. Let's
run!
Send comments on 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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