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?

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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.

How to be a Crony by Reading between the Lines

There was this discussion about experiences that vendors go through when they're in the middle of a tender or price negotiations. For the record, I have either NOT encountered any such Dark Managers, or its an art that needs to be honed further.

Apparently, one needs to "infer", the hints thrown across the opposite end of the table and work behind the scenes in fulfilling those needs. For example:-

1. I do not believe that my phone will work well with your solution.
   Emphasis on the work "my", as it really means; if you wanna be my buddy - by all means give me a new phone asap. Especially one that'll work with the solution.
   
   It's not necessarily a phone, but could be anything. For example, I do not think my firewall will be able to work with the solution. If the person is a straight shooter, it's probably true, but more often than not its a lazy manager that's been sitting on an upgrade to an old firewall that's 12 years old and about 200 patches behind.
   
   
2. I'm sorry, my kids are screaming at me for an x-box and I need to go now...
   Perk your ears for any "domestic" complaints, it's actually a problem requiring a solution. In this over simplified scenario, it's an x-box. It could be anywhere from "my girlfriend wants to go to a concert and I can't seem to find the time" to "I think I twisted my back the other day..." which really means, I need a spa weekend massage. Happy ending or not depends on the person.
   
   
3. How many customers have used your product?
   This yells SITE VISIT like a beacon, just jump right through it and get it done and over with. Book your tickets to Thailand, Singapore and South Africa (hint - world cup), Vegas etc. Never mind that the closest demo center is just a 15 minutes drive.
   
   
4. Can you tell me the benefits of this system?
   Book a personal time later to explore what kind of "benefits" tickle the Dark Manager's fancy. Especially when you ask whether he/she requires more private time with the "team" to go through it in detail.


5. How many users can this system support?
   The question above shows doubt, which requires "investments" in terms of a "proof-of-concept" machines. I.e. the operations team requires a loaner as they're facing an IT catastrophe. Oh, be warned though, the loaners tend to go missing or returned to you 2 years later.
   

Once you've fulfill most of the needs, the hints will be more obvious and by then you're pretty much a good friend. Feel free to add-on to the list...

Getting a Return on Judgment

The financial meltdown showed the limits of bureaucracy. Recovery depends on how well companies adopt the practices of personalization instead.

by Julian Birkinshaw and Huw Jenkins

_______________________________________________________________
The article above took the words out of my mouth, where bureaucracy creates moral and emotional detachment to actual outcome, elimination of personal accountability and situations such as "communally approving" hanky panky covered under the guise of governance.

Indeed personalization of accountability is key.

Control

Dark Managers achieve control through various means:-

• Information Clamp Down.
Where possible, limit the amount of information leaving the project or the department. The only news that gets reported should only transpire between him and the CEO. It’s a simple principle really; most people gripe, and the amount of lies you put out means that these lies will eventually reach the CEO. So keep your team and your peers in the dark, more importantly if the project is high risk, short in time and lacking in resources.

Secondly, it also allows you to deny things, because CEO’s have so many things in their minds these days, they’ll potentially forget.

• Remember Nothing
It’s easy to remember nothing; you sign nothing, and approve nothing - That way, nothing bad ever happens. This is contrary to the belief that by telling the truth you will not need to remember your lies, in some ways correct but in many ways not actionable. Once you've told the truth, you need to back it up in the future, the knife cuts both ways.

• Make your lie other people’s promise
In short, you’ve over committed on behalf of the organization that overall performance of the system will be fantastic. Now, everyone in the value chain is forced to own up to the promise. The network team is screaming at you that you know better that the bandwidth can’t support it, the infrastructure team is also screaming because the servers won’t handle the load. But guess what, they'll be too afraid to mention to the CEO that no upgrades have been done for the last 5 years cause they've been too lazy to do anything other than order the vendors around.

• Bureaucracy
There’s nothing like a manual time sheet in a book with a strung pen even though the company has already automated it online. It forces your team to go up to your desk, sign in and you get to smirk at them or smile at the prettier ones.

What do you think? Are you confident about the progress of the project?

Perhaps this post would better serve appearing under "white lies/half truth to upper management", but it happens often enough in "Steering Committee" meetings that it's better addressed here.



A steering committee intends to "steer" a particular endeavour towards a roughly correct course or direction. Through the Management's wisdom, having had 5 years working experience (I exaggerate, but you get my point that corporate businesses are being run by folks wet around the ears cause they're related to the boss) their input is like manna from heaven.

So what happens when the "Chairperson" asks you "What do you think? Are you confident about the project?"

As a Dark Manager, there's only ONE answer, "YES SIR! Everything is going on schedule, no major issues".

Even though you know that:-

• half the testing will not be completed because there's not enough time
• the training manuals are 2 versions behind yet still being published anyway
• 80% of the users will not be trained with the product
• Arbitrarily, you decide to re-categorize Major, Moderate and Minor bugs
• Half the team has resigned because they know that the system will go live with a ton of problems.
• The illogical project schedule was dictated by the same "experienced" chairperson.
  

Why? Because based on the principles of Tai Chi - There's always someone else to blame or able to solve your problem.