Why is the world run by bean counters?

A colleague asked me yesterday, why is the world run by bean counters? Interesting question.

My take is that for the last 150 years, Western culture has been in the grip of left-brain thinking, and manipulating people like things. This made sense as long as there were huge economic gains that came from it. So the bean counters, the accountants, the economists, the green eyeshade people were on top of the world. The economics was on their side. They were masters of the universe. They were perfectly adapted to this way of running things.

But then something happened. The gains from running the world this way stopped coming. The bean counters didn't notice that the economic foundation for the approach had collapsed. The problem was covered up with “financial engineering” and accounting tricks with debt. The result is that we end up with the poignant world described in a recent Financial Times article on the death of the American dream.

It's a picture of general decline and no way out. Business schools, textbooks, consultants, are all pressing ahead with cost cutting, downsizings, outsourcing and so on, as nothing has changed. Because the returns get smaller and smaller, there is a lot of desperate flailing going on. Executive turnovers is accelerating. Life expectancy of firms in the Fortune 500 has declined from 50 years to 15 years, and is heading toward 5 years, if nothing changes. Mind-boggling statistics. So mind-boggling in fact, that leading business journals seem reluctant to publish it, even though statistics come from a huge study from an ultra reliable source.

It’s important to note what’s wrong with bean counting. It’s not that counting is wrong. Counting is good. We desperately need to know what’s working and what isn’t. The problem with the bean counters is what’s being counted. It’s a focus on solely counting things, rather than dimensions of life related to people. It’s perfectly possible to measure dimensions like client delight and employee satisfaction, but the bean counters focus solely on counting the beans.

The bean counting is the consequence of a view of the world as consisting of “things” to be manipulated, rather than people to be interacted with and conversed with and responded to. The new economics counts the people dimensions as well as the beans. And guess what? Even in conventional bean-counting terms, radical management turns out to be two- to four-times more productive than traditional management with its focus on scalable efficiency and treating customers and employees as things to be manipulated.

So there is a revolution under way to run the world differently. Those who master it will prosper. Those who don't will go the other way. The new way is much more amenable to holistic Eastern thinking and so it may be that China, India will be powers in the future. It also seems much easier to do in Scandinavia, where the values are already in place. In the USA, it's hard to say how long it will take. The country has tremendous capacity to adapt. But the forces of stasis are so entrenched, and the arrogance of the bean counters so extreme, it won't be easy.

From a longer historical perspective, I believe it will happen inexorably, because of the economics. Resistance is futile. But it could take decades, even a century, before people finally accept that everything they believed to be eternally true was merely a temporary set of measures that worked for a limited period of time in a particular social and economic context.

New economics, new social scene, new ways of thinking, speaking and acting, new world. Welcome to the future!

Comments

[Jeff Brunson]

Thanks for this well-spoken post. And this comes from someone who was college-trained as an accountant. I became an accountant however because of the message that the world didn't really care about those right-brained passions of mine.
Well, 10 years ago I corrected that in my career and work. With that said, I do not regret my past with accounting and such ... it is part of the story that has made life so rich right now for me.

And in part, this richness has to do with the fact that I'm spending all my work efforts in bringing more brain balance to the world of work.

Thanks again.

[davidburkus]

Great question. Equally great answer. I have a potential short-answer to this question:

Bean counters know where the money is kept.

[Steve Denning]

Jeff--I'm not against accountants and counting. On the contrary, I think it's crucial that we count and keep track. What's important, though, is to count the right things. That's where we went off track. We need accountants who count the human-based dimensions of our lives. Steve

[Imelda McGrattan]

Beautiful little article. The evolution of actions based on new critical, all encompassing holitstic thinking ....

[Neil Olonoff]

The world is emphatically NOT run by bean-counters! The world is run by elected or hired executives who utilize bean-counters as instruments. Are Presidents or CEOs bean-counters? Most are not. Someone recently told me that it is a little known fact that the majority of CEOs got their undergraduate degrees in English. (Don't know if it is true.) But if it is true, it makes sense, because the work of a CEO -- or a President -- is primarily communication, not "managing," whatever that means.

[Steve Denning]

Hi Neil,

I agree that presidents and CEOs tend to stand to stay above the fray, and let the bean counters do their stuff. Armies of MBA graduates and consultants, wandering around organizations aiming for "scalable efficiency" and looking for things to cut. (KM is a typical low-hanging fruit--a nice quick win!)

It hardly matters wheher Tony Hayward had a degree in English or engineering. I think the latter. The point is that he encouraged the bean counters to run BP, while maintaining a nice front about how BP had changed, was focused on safety, etc etc. But as it turned out, it was: same old, same old.

Presidents and CEO may talk a good game, but that doesn't relieve them of the responsibility for handing over the keys to the bean counters.

Best
Steve

[Gerry Lantz]

Efficiency and insight can come from counting beans. The old saw is true: you can't control what you don't measure. There are, however, plenty of behaviors, ideas, and values that can't or aren't measured but are just as valuable contributors to success. How about hearing just ONE good, new idea from an unexpected source? Wrokers? Customers? Casual observers?

Right now the counters are "cutting" their way to growth but it is unlikely to work--unless it means major surgery such as is going on in the auto industry--along with an infusion of capital from government with strings attached.

Wall St. may be screaming for better numbers, but that treadmill has exhausted everyone. A new energizing model is needed and whether it arises from Eastern thinking or the collective unconscious of an organization, a new definition of value and success will emerge.

There are other players in running a business who could make a stronger contribution providing tools to re-direct org. strategy.

Human value (not human resources/capital), as you have been saying, has gotten lost, despite all the HR programs out there. Bottom-up and outside-in listening and contribution (such as practiced in Appreciative Inquiry) are a start. HR depts. have seriously dropped the ball. They say they want to be a strategic partner with Executive Leaders but have largely not provided tools for bottom up listening (and outside-in listening)--which would mean they would have to press marketing, sales, and the executive wing to let them in with tools to bring human value back into the equation--some of this may be happening at a small level with intra-corp. social media. Most HR depts. mean well and are overwhelmed with personnel management, training, benefits, corp. messaging role. But they could bring participatory strategic tools to the table that would allow EVERYONE to contribute and own the direction of the company. Not chaotically but collaboratively.

I know all this is apple pie, but a more open and inclusive strategic planning process including workers who execute, want to do a good job, and truly bring delight to customers (who are also leaders as you have said in earlier posts)is do-able in a heartbeat.

[stevedenning.typepad.com]

Why is the world run by bean counters.. I like it :)

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