So, many a systems thinker may see accountants and their financial management tools (financial measures, budgets, management-by-results, controls, cost-cutting focus…) as a massive impediment to organisations – and most certainly not a way forward.
So, for those of you interested in a giant that has spent decades researching and brilliantly writing about the problem with ‘modern’ management and financial accounting, and what to replace it with, then H. Thomas Johnson is your man!
Tom Johnson is Professor of Business Administration at Portland State University.
He started out as an accountant and then entered academia, starting with a PhD in economic history. This has led him to becoming a worldwide authority on economic history, management accounting, quality management and operations management. He has worked with hundreds of major organisations around the world. His research focuses on “the intersection of systems thinking, modern physics, and sustainable operations management”.
Why should you be interested in him?
Anyone who lives and breathes ‘management by results’1 (MBR) will find their management beliefs and behaviours hugely (and articulately) challenged by Johnson…and this is a very good thing!
Throughout his writings Johnson brilliantly explains:
- the history of ‘before’ MBR (i.e. it hasn’t always been like this!);
- how MBR came about;
- the disastrous outcomes of MBR; and
- a better way, using various organisations as examples (including Toyota)
Johnson has written seven books and over 100 articles, but his three most important/ well known books are:
- ‘Relevance Lost: The rise and fall of Management Accounting’ (1987): Co-written with Professor Robert Kaplan2. It provides the story of accounting, and where it all went wrong!
- ‘Relevance Regained: From top-down control to bottom-up empowerment’ (1992): The follow-up book: a reminder of the problem, but this time with an explanation of what to replace it with.
- ‘Profit Beyond Measure: Extraordinary results through attention to work and people’ (2000): A whole new way –‘ management by means’ (MBM) – explained, with examples from Toyota and Scania. Moving from ‘mechanistic’ (MBR) to ‘living’ (MBM) systems thinking.
A number of my other giants quote from, or refer to ‘Profit beyond Measure’….which is how I came across Johnson and his work.
Johnson has received many awards over the years, including:
- 2003: HBR’s roll of ‘200 leading management thinkers living today’
- 2007: Deming Medal from American Society for Quality: distinguished lifetime achievement
- 2007: Seminal Contributions to Accounting Literature Award from American Accounting Association
- Also referred to as ‘Management by the numbers’
- Robert Kaplan was a co-creator of the ‘Balanced Scorecard’ concept…but don’t let that put you off Johnson’s book 🙂
- Primary Source of bio information: https://www.pdx.edu/sba/h-thomas-johnson