Professor Elam

Execution The Art of Getting Things Done is reviewed at this hyperlink.  The authors argue that many books have been written about strategy. But that is useless unless someone executes the strategy and gets it done.  Now bear with me, I am going to link this idea to the next post. 

Karl Popper or perhaps it was someone else observed that 80% of things that get done are accomplished by about 20% of the people in any one organization. My take is that without those 20%, nothing gets done. So the question becomes, how does one motivate and empower people in an organization to get things done?  Well I supose folks all the way back to Alexander the Great have been pondering this question and every month there is another business book on the topic. 

The Halo Effect argues that we tend to mistake causality with success or failure.  On the way up for example (this transitions to the next post) WMT was hailed as the new model of business success. Sam Walton was given a medal by then President Bush I. Suppliers opened offices in Bentonville, AR to make sure they were on the JIT track and would get contracts.  This book did not use WMT as an example, it used CSCO, the networking company.  But the point is the same. On the way up, execs and companies enjoy a Halo Effect. When success is all round, they are hailed as innovators.  Business books appear spotlighting the ‘new methodology or core strategy” of the firm.  Or perhaps authors praise the CEO like Jack Welch at GE or Bill Gates or Mike Dell.  Once the tide turns of course, so does the praise. Or when such folks are really full of themselves, they write their own books, go to Amazon.com, put in Jack Welch, and see what you get.  Welch divorced his wife, married a 20 year younger woman, cashed out his stock options, got a highly publicized lavish retirement, and now tells us to emulate him.  All this was handily accomplished before GE stock started down of course.   Once te stock price starts down on any company,  the stories read that ‘the firm has lost its focus, the core strategy has been abandoned, etc.’

Or as Jerry Reed sings, When You’re Hot You’re Hot, When You’re Not You’re Not.  Success gives rise to a Halo Effect of success whether it is justified or not, just ask Brittany Spears. 

All of this relates to Managerial Accounting.  Here we focus on what makes for successful business. Now let’s move to the next post on our old friends at WMT, and see the Halo Effect in action.