In business half truths pose substantial problems. Why? People may have their own biases as they interpret data and information. How untrue and dangerous could half truths be for providing business insight?
Politicians and economists have always been accused of providing half truths.. More often than not statistics are quoted with much confidence which add to misleading half truths. The analysis of half truths poses a problem to the fraternity of accountants also. But delving deeper into their close analysis can be very confounding, and it may or may not prove to be fruitful.
Business decision-making is one of the more vulnerable victims of half truths. The problems mainly arise with human intention and disjointed actions. This disjoint is actually meant to show that “Yes, we are going to strive with our new people strategy for better bottom up management”. While decision makers may just be announcing various new objectives based on strategy, these objectives were never meant to come to fruition.
A special case is in the area of financial planning and analysis (FP&A) and its subsequent implementations. A financial plan may be proposed for a new process improvement and efficiency drive. The plan might be drawn up in excessive detail. Hours may be spent just deciding on the Project Charter. However, the Project Charter becomes Project Chatter. It comes as no surprise that these plans are withdrawn halfway through. The planners might appear to be very busy, but does busy-ness lead to results?
These same planners might say the finance community is providing obstacles to innovation and change. And, this may be true to some extent for the bean counters team. But, this all underscores the need for a new breed of accountants who ideally should be available to help these value proposers. Management accountants provide reliable insights and make their business cases by providing relevant information in the context of solving a problem or pursuing an opportunity. For example, the activity analysis from an activity-based costing (ABC) system may lead to a much needed Six Sigma project in an organization thus fostering better coordination and collaboration within the organization.
While I do not doubt the intent of these planners and value proposers, the point is they often wish to appear to be busy adding value, rather than adding actual value. Their intentions may not be to actually make decisions and execute based on those plans. The Half Truths of planning and not acting to implement those plans pose dangers.
Mintzberg’s theory revealed that a strategy’s intended goal often turns out to result in something not originally intended.
One reason could be that human willingness and some predisposition towards a particular outcome gives birth to these Half Truths. Organizations depending on well intentioned managers may very well announce good intentions. WorldCom, Enron, Satyam – to name just a few.
But, good intentions are not all that is needed to create value for shareholders and investors.
By Aslam Khan.