12 Jan 2011
January 12, 2011

Proactive Positive Laziness

2 Comments

Some years ago I was contracted to an international FMCG.  There had been a change of management and the new team was not sure of the financial status of the business. I’d been called in to drive the year end close and get the books square.

The US boss was in town and we had just held a meeting of the entire finance department.  It had not gone as well as it could – it was clear that days were passing without any substantial progress on the numbers.  After the rest of the team had left the room, I turned to our US guest and said:

“You know the issue here, don’t you?

“Go on” he replied

“They are not lazy enough” I replied

He looked confused and asked me to explain.

“They are all really happy to spend endless hours getting answers to amazing levels of detail rather than finding the quick way of getting to an albeit slightly less accurate answer”.

So why are accountants not lazy?

Accountants tend to come from two places.  Qualified from an audit background or rising up the ranks starting as a bookkeeper.

Too often I’ve seen a macho attitude in ex-audit accountants.  Driven by the competitive nature of gaining their qualifications in an audit practice they are educated to value the macho, back-slapping attitude of ‘pulling an all-nighter’. It is seen as a good thing to work late into or even right through the night to get the job done.  This translates into a drive to work long hours on a task rather than find the quick method of getting almost there.

As a bookkeeper you are taught to balance the books to the penny. Their diligence and attention to detail is crucial to ensuring that the ledgers are in order.  They are a vital part of any well-run business.  They are educated in ensuring that every last number is properly processed.  However, that level of detail is sometimes not required when  promoted to be an accountant.

Whichever route they take, accountants are educated that tasks are to be carried out in a methodical and repetitive manner until 100% complete.  When faced with such a task and a time constraint the normal option is to just work faster.  This often results in a boss who is frustrated because the answer is both late and difficult to digest.

A good starting point to resolving this issue is to understand the size and shape of numbers.

Take the following list of numbers:

16p     £140   75k      £3.2M

Notice how readable they are?

In each number the zeros, ‘k’ and ‘M’ describe the size of the number.  The shape of each number is defined by just two digits.  That is all it takes and all it needs.  Does the number 25k inform a decision-maker any less than 24,694.13?

When presenting and thinking about numbers just keep to two ‘significant digits’ to fully describe the shape of the number.  Anything more is unnecessary.  So how do we get this right and how does it save time?

The answer is to rely on one of my best friends – Vilfredo Federico Damaso Pareto.

2 Responses to Proactive Positive Laziness
  1. Great article Adrian.

    I learnt this early on from a boss, who had a lovely phrase “spurious accuracy.”

    For example adding 2 numbers which have been approximated and then showing the answer with too many digits. If the first number was c £12,200 and the second c £12,500 the answer may as well be c £25,000 as its unlikely to be exactly £24,700.

    Alan McBride

  2. Thanks Alan,

    I’m sure there is a model somewhere that describes how entropy increases when you add numbers together…?

    Adrian


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