I recently came across another thoughtful “LinkedIn Pulse” feed titled “The management narrative that makes room for Finance” byJack Sweeney, author, blogger and pod-caster at “CFO Thought Leader”.
In his post Jack argues that when it comes to managing a business corporation, despite Peter Drucker’s (renowned 20th century management guru) changing his early thinking from “commandand control structure” to an “information based organization”, he (Drucker) had largely ignored the ability of Finance Organizations to influence and support that change.
Back in business school, I distinctly remember reading a chapter written by Drucker on Controls, Control and Management, in which he said "Controls" is means and "Control" is the end. In my early 20s, and with little experience, I had no clue what that really meant. Now that I am older (not very much wiser), I am starting to interpret, understand and reason Drucker’s thinking.
By “Controls and Control” Peter Drucker probably envisioned centralized management in a relatively stable environment where organizations could be managed through “command and control” structures. With that line of thinking, I can understand where Jack is coming from when he says Peter Drucker probably never appreciated the strength of Finance in supporting a “collaborative and change” oriented management structure. If you want to know more on a “command and control” versus a “collaborate and change” management structure, I highly recommend watching this short 2 minute video by
However, if I take a more liberal interpretation of “Controls” as measurement of information about the performance of an organization and “Control” as the eventual end state the businesses needs to get to, I see an information based organization view in the definition – something that more closely aligns to Peter Drucker’s changed thinking. It is about how to understand what has happened or is happening to a business and what should be done to move the organization to where its
I completely agree with Jack on the need for "collaborative change management” and “finance being best positioned to effect that change”, and would even stretch it to say that eventually CFOs need to collaborate based on information (and analytics around such information) to help their business partners with decision that facilitates change. This fits a more contemporary interpretation and something that Peter Drucker would probably agree with.
Unfortunately, compared to what we have today, the information foundation and associated processes/
I believe Financial Analytics is the Holy Grail that will help CFOs and their Finance Organizations facilitate collaboration and change across the enterprise.
Welcome all thoughts and comments.