Magazine article CMA - the Management Accounting Magazine

Building Accountability in a Changing World

Magazine article CMA - the Management Accounting Magazine

Building Accountability in a Changing World

Article excerpt

All too easily, strategic planning can generate "good intentions," but a lack of real commitment to organizational action. Here's a primer on how A & W is avoiding this problem by establishing clear accountability for future results.

Change is pervasive in business today and no organization is immune from it. Driven by the economic "global village," forces such as industry consolidation and international competition require even the smallest organization to respond to rapidly shifting market conditions. Ironically, it can be said that, today, change is the only constant.

Not only is there a much faster pace of change, but the nature of managing change is different. In the past, changes occurred in a step function. The task of the manager was to help the organization through the hurdle of a major change, but then we carried on in an uninterrupted mode for many years to come. In today's world, organizational success requires us to be continuously adapting to change.

In response to this frenetic environment, many CEOs and their organizations have tended to reject accountability. With change occurring at such a pace, how can anyone be accountable for future results? Indeed, in a recent survey of CEOs, a startlingly high number rejected any attempt to strategically manage the future of their business, saying that change was so fast, all that one could hope to do was to react. Clearly this type of response, whether at the CEO level or at the department level in an organization, represents a loss of accountability.

A&W was required to confront major change many years before its competitors had to. A&W was the first significant fast food chain in Canada and most Canadians grew up in the '50s and '60s "cruising the Dub." However, shifts in the marketplace, both in terms of consumer preferences and the competitive landscape, resulted in the death of the drive-in. As I like to say, jokingly, we were in the business of feeding people in their cars in a country with seven months of winter and five months of bad skating! This business format worked fine in a less competitive landscape, but once large American chains began to enter Canada in the early '70s, the business entered a period of rapid decline.

We were called on to answer questions, then, that many managers face today; which are: How do we respond to change? What management processes can we use to deal with fundamental strategic change in our business?

Dealing with fundamental change is a major challenge for managers. Senior executives get promoted by building and demonstrating strong operations skills. However, the questions we face in dealing with fundamental change are not operational, but strategic. This difference is not merely academic, but profound, since operations and strategy deal with dramatically different issues. For example, operations asks the question: "Are we doing things right?" Whereas strategy asks the question: "Are we doing the right thing?" Operations wants to avoid change; strategy's task is to make change. Operations assumes today's standards are correct and focuses solely on getting off-standard performance back in line with the existing standard. Strategy's purpose is to define totally new standards for the future business.

Faced with a dying business in the mid-'70s, we at A&W were fortunate to encounter a consultant named Bob Johnson, of Trendsitions Strategy Management, who had developed a unique approach to strategic decision-making. Indeed, in my experience both in business and at some of the world's leading business schools, I have never encountered a strategic decision-making process that is as effective as the one developed by Johnson. His model became our "how to" in re-inventing A&W.

Firstly, the Trendsitions model that we have used focuses on strategic decision-making versus strategic planning. Unfortunately, strategic planning has too often earned itself a bad reputation because of the extensive work that managers do in developing strategic plans, and the lack of action and concrete results that seem to flow from such plans. …

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