What would “The Duke” say about the Trivialization of Non-executive Functions?

You can thank Carrie from Carrie’s Nation for this rambling rant. This is all her fault!

That’s just a joke my friends. In her most recent comment on my April 3, 2008 post about the downside of outsourcing (sorry co-sourcing), Carrie stated, ”Everyone has those weird odd jobs that take way too much time, which management refuses to acknowledge takes more than 10 minutes per week to complete.” True enough. But it’s not just the importance of and the time and effort invested in the “odd jobs” that executive management refuses to appreciate or even recognize. There are entire functions that receive the same treatment.

I’ve been managing accounting operations for over thirty years and seen this time and again. Every time the cost reduction bloodhounds start sniffing out staff cuts, there are four functional areas that immediately become trivialized and then targeted for the chopping block: accounts payable, accounts receivable, payroll and inventory control. And these are just the areas that I’m most familiar with. I’m certain that other managers have their own axes to grind with the executives over the required staffing levels of other functions as well.

I know how important those four accounting functions are. I know what can happen when full time attention is removed from them. There is a lot more involved in these jobs than meets the eye or sometimes even understood by the incumbents themselves. I’ve seen the disasters that can be created when these functions are left unattended for even two or three months.

Through the years, I’ve cautioned employees involved in these areas to be extremely cautious when approached by pompous CFO’s (who’ve never really worked a day in their lives) and/or fast talking consultants (who actually know better but whose fees are predicated upon pinpointing areas for reductions) and asked about what they do and how long it takes them to accomplish their tasks. I always remind these employees of the old axiom, “No good deed goes unpunished.”

People are proud of their work and always want to impress their superiors and outsiders with how well they their perform their jobs. Because of this, there is a tendency for some employees to cut their own throats with their own words. When the consultant asks, “Tell me what you do?” The accounts receivable clerk answers, “I post cash receipts to open invoices.” The consultant then responds with the infamous set up question,“And how long does that take you every day?” “Oh, I can get that done in an hour or so,” beams the clerk trying to impress the consultant with their prowess and efficiency. I cringe every time I hear this because I can see the wheels turning behind the consultant’s beady little eyes. “Hmmm, an hour a day! What are they doing for the other seven; skylarking, surfing the Internet, talking on the phone? The employee has just cooked his/her goose and may not even realize it. The report back to the executive suite will be devastating. It will reinforce the notion that the function is easy and equally unimportant. I’ve seen the same scenario play out in each of the other three functions that I mentioned earlier.

What’s never asked about is the time and effort spent on supplier account maintenance and customer account housekeeping, collection calls, straightening out paychecks or payroll tax issues, inventory cycle counting and correcting bills of material issues. These are the items that take the time and require the experience of the employees. This is the tender loving care that will be lost when the positions are cut or consolidated. The effects won’t surface immediately, but when they do – look out below. And who will be held responsible when things go awry? Why the functional managers of course! How could they allow this to happen?

Now hear this! I am most definitely NOT advocating featherbedding here! I’m talking about intellectually honest management. I’m talking about rational staffing to meet real requirements and a true understanding of the effects of short term cost reductions.
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But that all seems to be lost in the knee-jerk top level reactions to short term needs. You see the executive elites no longer believe in the long term continuity of the corporation. Everything is for the NOW. All costs must cut immediately. The next month’s or quarter’s bottom line is all that’s important. Who cares if the functions fall apart due to neglect over the next year or two? Many of the executives will have moved on to other lucrative engagements by then.

Interestingly enough, the opposite seems to be true when the elites analyze their own executive functions. It sure seems strange that their pals and favorite consultants can always be paid huge salaries and fees to come aboard to enhance the “strategic” position of the firm or to focus on a single issue needing attention. .I’ve seen the exorbitant salaries, recruiting fees, sign-on bonuses, relocation allowances as well as the “contracts” replete with golden parachutes offered to these characters. But someone hoodwinked “the board” into approving them and so it’s OK to have more generals in the bunkers and fewer troops in the field. What way to fight a war!

I’ll end with one of my favorite movie lines. It illustrates my feelings about this dichotomy. See if it makes any sense to you. In the film The Comancheros, Texas Ranger John Wayne goes through the arrogant southern aristocrat and gambler Stuart Whitman’s belongings after arresting him for murder. The scene takes place on a riverboat back in the 1840’s. Wayne has handcuffed a sleeping Whitman to a bedpost. As he rifles through the detainee’s jacket, Wayne finds the bill of sale for Whitman’s clothing. I believe that “The Duke’s” reaction goes something like this, “$300 for a suit of clothes. Where I come from, we could outfit twenty men for that kind of money.”

Do we need more working lawmen or more arrogant aristocratic gamblers?

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