Blog series one and two, The end of ‘Gestapo’ accounting, delved into the role of ‘You the leader’ in changing and leveraging the emerging accounting paradigm, as well as the strategy to institutionalise such a paradigm at the organisation. This particular blog series explores ‘design/structure’ challenges. We ought to ask and answer the question: ‘what organisation Structure can best leverage ‘You – The Leader’ and ‘Strategy’, in order to change the manner in which accounting is managed?’
The Effectiveness lab’s Organisational Development (OD) philosophy is grounded in four fundamental organisational enablers: Leadership, Strategy, Design, and People. The lab’s hypothesis is that when organisations and individuals grasp the so-called L.S.D.P variables, starting with the ‘L’, they derive S.M.A.R.T outcomes and efficacy.
You need a quintessential leader as the foundation for: sound strategy development, designing an appropriate structure for strategy implementation, and getting the best out of the people employed to implement the strategy. In effect, the journey to efficacy begins with sound leadership. At the Effectiveness lab, the mantra for the latter is ‘You-the Leader’. Strategy, Structure or People without Leadership won’t get you far. It is no accident therefore that the majority of institutions on earth have got a leader singularly sitting on a pedestal. It’s leadership first, or we think
‘The end of ‘Gestapo’ accounting’ series has articulated the need for changing the manner the accounting function is managed at the modern firm.
The easy part is the lobby for the change of guard from the so-called ‘Gestapo’ accountant to the modern ‘soft’ skilled species. However, organisations need to review carefully the effects, especially negative, that may arise from changing the accounting paradigm. Accountants deal with the ‘life-blood’ of an organisation, money. Any operation to change operating terms of the accountants has to be done with surgical precision. There is simply no room for error.
Perhaps, the above explains why the ‘Gestapo’ tag has outlived many attempts to change accounting mannerisms at organisations. Yes, you all have complained about accountants to the CEO; main crime – that they slow business down. However, CEO’s have listened to you, yet opted not to do much about your cry.
We have put the case for the right Leadership, as well as Strategy in changing the accounting status quo at the organisation. However, that is about 50% of the entire change journey. The real work starts when the strategy is implemented. Organisations need viable Structures to implement the strategy. The ‘Structure’ of the organisation houses the Strategy and enables ‘You -The Leader’ to keep tabs on what is happening in regards to your change agenda.
Will the modern organisation leak money and other resources with the demise of ‘Gestapo’ accounting?
Well, the above heading pauses a valid question. Especially if our earlier assumption that the accountant is the resource police at the modern firm still stands. Imagine organisations opening their doors on any given day with the accountant playing a different role, certainly, no longer the ‘Gestapo’. What would happen to the resources? How will the organisation create wealth and not lose it at the same time? After all, the gatekeeper of old will be no longer
The answer to the above and the guarantee of stability lies in ‘You – the leader’ and your pedigree (blog Series one), the Strategy you choose to implement the accounting paradigm change (blog series two), and how the two are imbued in a robust organisation architecture.
You should all know that it is not the individual accountant that is controlling resources, and sustaining the Bulldog culture, but the ‘job/role’ they have been asked to hold within a given organisation architecture. If the job asks the accountant to ‘Bulldog’, they will do exactly that. I am sure that like us, you have worked with accountants away from their organisation boxes; and the vast majority are extremely affable.
So, build the organisation’s building blocks another way, placing the accountant in a different role and box, and you will find a new kind of creature in your accountant. Of course, accountants that have worked under the “Gestapo’ culture organisation architecture, may find it hard to transition to the new paradigm. After all, old habits die hard
Creating the new accounting function architecture – a new jigsaw puzzle!
We can, after all, create a new organisation structure that can shape or host the new and ’soft’ skilled accountant. If this organisation structure were a jig-saw, it would have to be cut a certain way. The pieces will be designed, cut, and assembled a different way and they won’t fit the pattern of old.
Indeed, the power of ‘organisation structure design’ can be used as a lever to change the accounting paradigm. If a Bulldog type accountant joined your organisation and found it running the opposite paradigm, albeit with difficulty, they will be forced to acclimate to the ‘new’ accountant behaviours.
What about the design of the new jigsaw?
- Be mindful that the new jigsaw and its pieces are going to create a new interwoven accounting structure i.e. accountants spread across departments or units and working ‘with’ and not ‘above’ departments.
- So, instead of specialist accounting units, working in boxes and having an arms-length relationship with the rest of the organisation, accountants will work for and share space with the operating units
- Accounting structures will take the shape of a ‘concentric pattern’ – i.e. they will work for and within departments or units on a day to day basis and report to the non-accountant department head
- To maintain professional integrity, there will be an accounting centre into which all accountants shall matrix-report – but this is purely for ‘professional’ and not ‘control’ or ‘policing’ purposes; such reporting will enable accountants to fulfil their other technical mandate – i.e. consolidating books, ensuring FRS are followed, etc
- We know that the above is a different type of accounting jigsaw from the one you know – the boxed and Bulldogging type; indeed this new jigsaw, once put together, is horizontal or circular but not vertical.
- Accountants for the first time will report to operating unit heads (not ‘learned’ accountants) for day to day management and their concentric-centre for professional purposes
In many ways, we aren’t talking anything new here; this is a matrix structure that has been around for many years — not so? Only that this time, the centre of power has shifted from the CFO, who should in the new paradigm have their hands full with Strategic discourse, to the operating unit heads
We believe that this approach works best when mundane-accounting functions that fester ‘Gestapo’ like accounting habits are sub-contracted to outside providers. For example: payroll management, Accounts Receivable and Payable, etc.
The above must be scary, almost whimsical to the orthodox accountant and certain CEO’s – but is the time not right to consider horizontal accounting? We hope to live and see the day when accountants deal with the upstream accounting needs (checking and passing original accounting documents) of business units, moreover directly working within the units (physically or virtually), but have the downstream elements (final accounts etc) managed by accounting service provider agencies. We should soon start to see accounting super-markets!
Welcome to the age of horizontal accounting and perhaps, the beginning of the death of traditional accounting
What DNA will match the above superior skills need? Look out for Series four next week