Enemy Number One –Dickeson
What Sigoloff, Buck and Palmisano have in common is a mistrust of predictions or forecasts of the future as a basis for operating decisions. They needed simple, current information they can believe as a decision base.
When I spoke to one of the top leaders in our industry the other day about the Contribution model of Printrol II, he cynically responded, “Rog, printers don’t care about accounting; they just want to get out there and sell. Most of ‘em don’t know the difference between an asset and a liability!”
Sigoloff, Buck, Palmisano and printers in general are experienced veterans of business combat. They’re not stupid—far from it. Perhaps it’s the statistical cognoscenti who “just don’t get it.”
By our behavior we’re telling those wizards that monthly financials are steering the car by watching the center line in the road in the rear-view mirror; using absorption job cost accounting to establish prices is foolishness. Since the mid ’80s, we’ve known that small changes in input can cause big variances in output. Yet the accountants and printing software firms still insist on predictive management models that ignore that truth. But not Sigoloff, Buck, Palmisano and printers.
Management is prediction and we can’t predict reliably beyond next week. Want an annual forecast? Subscribe to “The Farmers’ Almanac.” We’re telling the accountants and MIS firms, “Give us weekly financial information for our knowledge base. Make it simple, credible and current. If you don’t do this, you’re artifacts for future archeological digs. The lessons of the Enron fiasco are fresh. We’re madder’n hell and we’re not gonna take it any more.
“We don’t want to hear any more of that EBITDA, LIFO, FIFO, FISH, WIP, Depreciation or Amortization stuff. Talk liquidity. Walk liquidity. We want a job contribution number for the prior week every Monday morning at 9 a.m. telling us the invoiced or cash sales with the weekly Break-even Bogey deducted from it.