Will Lehmann cause E&Y's downfall...?

The last time an accounting firm was implicated with a major screw up it went belly up, remember Andersen which was swallowed up by E&Y. Now it seems that E&Y have their own dirty customers to deal with.

So who exactly can we trust these days?

Lehman file rocks Wall Street

By Francesco Guerrera and Henny Sender in New York and Patrick Jenkins in London

Published: March 12 2010 00:41 | Last updated: March 13 2010 00:21

The fallout from the report into the collapse of Lehman Brothers shook Wall Street and London on Friday as US officials grilled banks about off balance-sheet trades and questions were raised over the City’s role in the company’s attempts to cover up its problems.

The 2,200-page report by Anton Valukas, appointed by a US court to probe the reasons for Lehman’s failure in September 2008, paints a damning picture of the bank’s top management, including former chief executive Dick Fuld, three of its chief financial officers and auditors Ernst & Young.

Read the full news here

On Strategy

"Strategy without Tactics is the slowest route to victory. Tactics without strategy is the noise before defeat" - Sun Tzu

"Action without Glory is the hardest route to being sidelined. Glory without Action is best noiseless when you take credit for other people's work" - The Dark Manager

Hubris & the Carping Cycle

Kubler-Ross in the 1969 book, "On Death and Dying" introduced the concept of "Coping Cycle" when dealing with Grief. Indeed, management turns this model on its head where we could replace Grief with Hubris; and what i'd like to call the "Carping Cycle".

This is essentially what happens when failures happen during the Dark Manager's watch

Stage #1- Denial
The Dark Manager will start of ranting about how well it could have been done. Complaining about how the staff or contractor do not have the skills to manage the situation, and usually ends saying something like "this is a small issue" or "non-issue".

Stage #2- Anger
The situation gets escalated to Audit which now breaths down the manager's neck. He/She then vehemently shows proof that all procedures have been followed and a two bit fresh grad with 1 year experience has no place diving through his documents.

Stage #3- Bargaining
So Audit sends someone of higher seniority, and the issue gets escalated higher up. Which now the Manager justifies that he is after all protecting the company's good name. And that tight datelines need to be met and hence concessions were required . Approval is sought from the upper management for more time to close the gaps.

More often than not the Dark Manager will begin to ignore emails or play hide and seek with the Audit manager with excuses like "Oh, the VP just called me, I have to go..." and since there's at least 12 VPs in the organization, no one really knows who he's talking baout.

Stage #4- Depression
The project crumbles around him, staffs are resigning, and you see him either spending more time in the smoking room sulking or not seeing him at all. We term it as going AWOL but in his terminology - he's just too busy working with international customers that he needs to be on site. He/she begins to swear by Genchi Genbutsu.

Stage #5- Acceptance
Unfortunately, Acceptance never actually happens. The manager pushes ahead anyway and concocts a report that everything is under control with the project. And that it is NOT HIS JOB to fix environmental/situational problems. The often quoted comment is "My job is to deliver the project on time, everything else is irrelevant.

An extremely nifty approach should your organization be filled by other Dark Managers that are too lazy to "prepare" the necessary requirements for the project in the first place.