{"id":86076,"date":"2021-07-19t12:45:37","date_gmt":"2021-07-19t16:45:37","guid":{"rendered":"\/\/www.g005e.com\/?p=86076"},"modified":"2023-01-30t12:45:45","modified_gmt":"2023-01-30t17:45:45","slug":"gary-cokins-on-predictive-accounting","status":"publish","type":"post","link":"\/\/www.g005e.com\/2021\/07\/19\/gary-cokins-on-predictive-accounting\/","title":{"rendered":"let&#8217;s get real: kill saly"},"content":{"rendered":"<p><strong>gary cokins on predictive accounting and driver-based budgeting.<\/strong><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/player.vimeo.com\/video\/570373635\" width=\"640\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h6>^ click to play video<\/h6>\n<h6><iframe loading=\"lazy\" src=\"https:\/\/podomatic.com\/embed\/html5\/episode\/10068800?autoplay=false\" width=\"504\" height=\"208\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\"><\/iframe><br \/>\n<span style=\"color: #0056a6;\">^ download the podcast and <span style=\"text-decoration: underline;\"><a class=\"external\" style=\"color: #0056a6; text-decoration: underline;\" href=\"https:\/\/podcasts.apple.com\/us\/podcast\/cpa-trendlines-podcasts\/id1537866697\" target=\"_blank\" rel=\"noopener noreferrer\">subscribe on itunes here<\/a><\/span><\/span><\/h6>\n<p><em>with steven sacks<\/em><br \/>\n<em><a href=\"\/\/www.g005e.com\/shop\/ss20tnf\/\">the new fundamentals<\/a><\/em><\/p>\n<p>the main problem with the annual budget process as a fiscal exercise done by the accountants is that it is disconnected from the executive team strategy.<\/p>\n<blockquote><p><b>more steven sacks: <\/b><a href=\"\/\/www.g005e.com\/2021\/05\/27\/would-you-buy-your-own-services\/\">would you buy your own services?<\/a>\u00a0|\u00a0<a href=\"\/\/www.g005e.com\/2021\/04\/25\/the-future-of-the-accounting-profession\/\">the future of the accounting profession<\/a>\u00a0|\u00a0<a href=\"\/\/www.g005e.com\/2021\/03\/28\/avoid-last-minute-deal-making\/\">avoid last-minute deal making<\/a>\u00a0|\u00a0<a href=\"\/\/www.g005e.com\/2021\/02\/21\/business-is-about-relationships\/\">business is about relationships<\/a>\u00a0|\u00a0<a href=\"\/\/www.g005e.com\/2021\/01\/31\/can-a-cpa-firm-be-different-in-a-changing-market\/\">can a cpa firm be different in a changing market?<\/a>\u00a0|\u00a0<a href=\"\/\/www.g005e.com\/2021\/01\/10\/a-rapidly-changing-business-environment-requires-flexibility\/\">a rapidly changing business environment requires flexibility<\/a><\/p>\n<p><strong>more with gary cokins: <\/strong><a href=\"\/\/www.g005e.com\/2021\/03\/05\/busting-the-myths-of-performance-management\/\">the myths of performance management<\/a> | <a href=\"\/\/www.g005e.com\/2021\/04\/19\/gary-cokins-the-truth-about-activity-based-costing\/\">gary cokins: the truth about activity-based costing<\/a><\/p>\n<p><strong><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-49700 size-full\" src=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2016\/08\/yellow_key_clip_art-e1375897299811-36p-hi-1-e1603911598474.jpg\" alt=\"goprocpa.com\" width=\"39\" height=\"16\" \/>exclusively for pro members.\u00a0<\/strong><a href=\"\/\/www.g005e.com\/wp-login.php?redirect_to=\/\/www.g005e.com\/2021\/07\/04\/accounting-is-a-profession-not-an-industry\/\">log in here<\/a>\u00a0or\u00a0<a class=\"external\" href=\"http:\/\/goprocpa.com\/\" target=\"_blank\" rel=\"noopener\">2022世界杯足球排名 today<\/a>.<\/p><\/blockquote>\n<p>corporate finance expert gary cokins says the typical annual budget process allows too much room for bad habits, such as the use-it-or-lose-it mindset of allocated resources, as well as incorporating last year&#8217;s inefficiencies in processes into the current year.<\/p>\n<p><strong>five key take-aways:<\/strong><\/p>\n<ol>\n<li>there is interest now in corporate performance management because executives are frustrated with strategy failure. they are good at formulating strategy, but meeting expected goals is a real problem.<\/li>\n<li>the way to get rid of spreadsheet budgeting is to view the amount of spending of any organization as the result of the confluence of two streams. the first is going to be repeatable work. it tends to be operational. the second is non-repeatable because it involves capital, risk management, and strategy projects.<\/li>\n<li>accounting must carefully identify and construct key performance indicators. but not every type of measurement is key.<\/li>\n<li>activity-based costing is just full absorption costing done correctly, without the \u201cbutter spreading\u201d on spreadsheets of labor hours or units produced or sales dollars or full-time equivalent headcount or square feet. none of those reflect the unique consumption that the products or service lines actually consume.<\/li>\n<li>many people have heard about the balanced scorecard, but it&#8217;s just a feedback mechanism. the real intelligence is in the strategy map.<\/li>\n<\/ol>\n<p><!--more--><\/p>\n<p><strong>about gary cokins <\/strong><\/p>\n<p style=\"padding-left: 40px;\">gary cokins is an internationally recognized expert, speaker, and author in enterprise and corporate performance management improvement methods and business analytics. he is the founder of analytics-based performance management, an advisory firm located in cary, north carolina at www.garycokins.com. gary received a bs degree with honors in industrial engineering\/operations research from cornell university in 1971. he received his mba with honors from northwestern university\u2019s kellogg school of management in 1974.<\/p>\n<p style=\"padding-left: 40px;\">gary began his career as a strategic planner with fmc\u2019s link-belt division and then served as financial controller and operations manager. in 1981 gary began his management consulting career first with deloitte consulting, and then in 1988 with kpmg consulting. in 1992 gary headed the national cost management consulting services for electronic data systems (eds) now part of hp. from 1997 until 2013 gary was a principal consultant with sas, a leading provider of business analytics software.<\/p>\n<p style=\"padding-left: 40px;\">his two most recent books are performance management: integrating strategy execution, methodologies, risk, and analytics, and predictive business analytics. his books are published by john wiley &amp; sons.<\/p>\n<p style=\"padding-left: 40px;\">connect with cokins on <a href=\"https:\/\/www.linkedin.com\/in\/garycokins\" target=\"_blank\" rel=\"noopener\">linkedin<\/a>. find cokins\u2019 books at <a href=\"https:\/\/www.goodreads.com\/author\/list\/47692.gary_cokins\" target=\"_blank\" rel=\"noopener\">good reads.<\/a><\/p>\n<h2><strong>transcript<\/strong><\/h2>\n<p><strong>steven sacks\u00a0<\/strong><\/p>\n<p>i&#8217;m steven sacks, owner of solutions to results, a consulting firm that helps cpa firms and organizations in the areas of communication culture, education, and training. today, our guest is gary cokins, an internationally recognized expert speaker and author on enterprise and corporate performance management improvement methods and business analytics. an author of books on performance management, risk and analytics, and predictive analytics, gary has been a consultant with deloitte, kpmg, and sas. this is our third in a financial management series, which has previously covered the myth of performance management and the truth about activity-based costing. today, gary, and i will cover the topic of predictive accounting with a focus on driver-based budgeting. welcome, gary.<\/p>\n<p><strong>gary cokins\u00a0<\/strong><\/p>\n<p>thanks, steven. thanks for inviting me to do the third of a series. maybe we&#8217;ll do more.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>absolutely. gary, you mentioned that the annual budget process is broken. why do you believe it&#8217;s broken? and what do you think are its main deficiencies?<\/p>\n<p><strong>gary cokins\u00a0\u00a0<\/strong><\/p>\n<p>yeah. i think the annual budget process is a fiscal exercise that&#8217;s done by the accountants that has two issues. one is disconnected from the executive team strategy. and it tends not to be volume sensitive. volume meaning demand volume. there&#8217;s a lot of jokes. people make a lot of jokes about the annual budget. i mean, just here&#8217;s a few of them. and imagine you would do a check in the box to each of these. it&#8217;s invasive and time-consuming without the few benefits. it takes six to three months, basically to prepare the thing. it requires two or more executive tweaks after it&#8217;s published. they don&#8217;t like &#8212; the executives don&#8217;t like the numbers. you know, make some changes. it&#8217;s out of date a couple of months after the things published due to a lot of other changes. it stars the department with truly valid needs, meaning in the next fiscal year, they may be in really increased demand for certain departments, but you only gave him a few additional employees. they really needed a lot more. it caves into the loudest voice in political muscle from gray hairs like you and me, who are veterans. they know how to sandbag that budget. you know, kind of pad that thing, buffer it, just in case, there&#8217;s some issues. it incorporates last year&#8217;s inefficiencies in processes into this year&#8217;s. but the one that bothers me the most is when a manager is three, four months from the end of the fiscal year glide path, and it looks to them, they&#8217;re not going to spend all of their budget, allotted to them. what do they start doing? they start spending foolishly, needlessly, because they know that next year&#8217;s budget for them is going to be pegged to how much they spent this year. we call it use-it-or-lose-it behavior. so, there&#8217;s got to be a better way, and i&#8217;m going to describe that better way in this session.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>budgeting is one of the several components of enterprise performance management and corporate performance management. briefly, what are some of the other components, and why is there interest in corporate performance management?<\/p>\n<p><strong>gary cokins\u00a0\u00a0<\/strong><\/p>\n<p>we&#8217;re going to stray away from the predictive accounting for a few minutes. i&#8217;m going to talk about what i see as many of the forces that have caused interest, and it will describe some of these components or elements. the first one is executives&#8217; frustration with strategy failure. they&#8217;re quite good at formulating strategy. their frustration&#8217;s failure to successfully execute the strategy. another one increased accountability. today, there&#8217;s no place to hide. you will be measured, you will be monitored. doesn&#8217;t necessarily mean your job&#8217;s at risk, but it could adversely affect your salary increases and job promotions. a third one is more rapid decision making. unlike years ago, you could test and learn at meetings and conference rooms. today, people are on the phone &#8212; go or no go, yes or no. they have to make decisions in almost near real time. fourth, mistrust of the management accounting system, many line managers do not trust the internal management accounting. they know those cost allocations are flawed and misleading and subsidize others. so, there&#8217;s got to be a better way. and there is a better way. five, poor customer value management. i think we&#8217;re all realizing now that customers are the source of value creation for shareholders and owners. and many customers view the suppliers as commodities. so, for a supplier to be competitive, they&#8217;ve got to provide differentiated services to different segments of customers and know how much it costs for those price discounts coupons. not all of them are doing that well. they tend to stop at the product, gross profit margin line &#8212; really need customer profitability. we talked about it that in the second session that you interviewed me with. the other one is the contentious poor budgeting. we&#8217;ll talk about that for the rest of this presentation. then another one is basically unfulfilled return on investment promises from large it systems. and if you ask a chief information officer, it\u00a0 director, after they&#8217;ve just spent three years implementing a large enterprise resource planning system, you asked them: how well do you think the return on investment met or exceeded what the software salesman sold you on three years ago? many of them are gonna be hard pressed to say yes. they go wow! we just spent three years implementing this thing. you know, i don&#8217;t know whether, you know, we got the roi yet. that does not mean you should not implement it. you have to \u00a0&#8212; to remain competitive. but those large systems produce a lot of data, but not necessarily information. you convert information from data. and so, what the enterprise performance methods, and i&#8217;ve already sort of described some of them. they&#8217;re really like many gears in the machine, seamlessly.\u00a0 what they do, like seeds from the ground, they create that roi. that&#8217;s really the integration of multiple methods is really what enterprise and corporate performance management is all about. it&#8217;s not a processor system. integration seamlessly like gears and a machine of methods.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>so, how can an organization resolve the deficiencies in the budgeting process?<\/p>\n<p><strong>gary cokins\u00a0\u00a0<\/strong><\/p>\n<p>well, first, let&#8217;s talk about how you should not do it. but how everybody does do it. typically, this is the budgeting process. you give all the line managers a spreadsheet for their cost center. you know, january to december. general ledger accounts, including rubber clips &#8212; and rubber bands and detailed, you know, paper clips. they fill out all the numbers. someone in the accounting department consolidates all the cost centers. you bring in the forecast and the revenue and price. you calculate it. you give it to the executives. they say, well, that&#8217;s okay, but not enough profit. change some of the numbers. so, they give all the spreadsheets back to the managers. they lower some of the spending. back to the accounting department. consolidated. back to the executives. they say that&#8217;s better, not good enough. up, down, up, down, up, down, up, down. golly, you almost want to ask the executives, what number do you want in the first place? but that would give us their aspiration, not what&#8217;s realistic. so, the way to basically get rid of what i call spreadsheet budgeting, is to view the amount of spending &#8212; think of that as the budget &#8212; of any organization is the result of two rivers streams that are coming at it. the upper river stream is going to be the repeatable work. it tends to be operational. it&#8217;s demand driven, typically customer-demand driven. and the key to that one, to actually calculate being an industrial engineer, that was my undergraduate at cornell. i&#8217;m a &#8212; think i should mention, i became a division controller at age 27. but i&#8217;m an engineer masquerading as an accountant. i&#8217;m 71 now. i&#8217;ve been in that space all along. you basically have to create a cost model, historically descriptive of the past\u00a0 &#8212; activity-based costing a powerful tool and appropriate tool to do that. when you do that, you get what are called unit level cost consumption rates. so, for the predictive view, for this operational, this is i think, industrial engineering 101, first semester of freshman year. volume and mix times unit level, consumption rate equals capacity required, number and types of employees, salary and their wages, and spending with suppliers. for the lower river stream, the non-repeatable work, that&#8217;s really going to come from projects. and there&#8217;s three types of projects and could &#8212; because they have beginnings and end. one project is going to be capital projects. we&#8217;re all familiar with those. you know, we propose those. what type of assets equipment to purchase the future. another one is risk management projects, risk mitigation. because enterprise risk management is now very embraced by more organizations. and so, the risk management people that tend to look at, well, what are going to be the most painful of the risk events and &#8212; and most probable? and we spend money to mitigate them. and then a third type is going to be strategic projects, because you need project &#8212; strategy is not about doing the same thing over and over again, a little bit better. it&#8217;s about change and use projects to basically accomplish typical strategic objectives to execute the strategy. remember, that was the first four. so, that&#8217;s the way to resolve the deficiencies of the annual budget.<\/p>\n<p><strong>steven sacks\u00a0<\/strong><\/p>\n<p>so, as a follow up to do a deeper dive into activity-based costing, you mentioned that it&#8217;s kind of too complex to implement from the accountant&#8217;s perspective. and then once it&#8217;s implemented, then it&#8217;s too difficult to maintain. so, you&#8217;ve mentioned rapid prototyping as a solution for this. what is rapid prototyping and what role does it play in the accountant&#8217;s reluctance?<\/p>\n<p><strong>gary cokins\u00a0\u00a0<\/strong><\/p>\n<p>yeah. well, let me reinforce you know, how you introduced this. yeah, activity-based costing has this black eye, bad reputation from the 1970s and 80s and 90s. the systems that people implemented were way too large, way too complex\u00a0 &#8212; that 3000 activities, felt everybody had to have timesheets. all of those are misconceptions. but the problem is they were unsustainable, no one understood them, and so they failed. and everybody said, oh, abc doesn&#8217;t work. activity-based costing is just full absorption costing done correctly. you know, not doing this butter spreading of overhead on, you know, number of labor hours or units produced or sales dollars or full-time equivalent headcount, square feet, square meter. none of those reflect the unique consumption that the products and service lines, consumer, the end-end business processes and the work activities that belong to them that in turn, consume the spending. so, activity-based costing traces and assigns it much more correctly. so, the way to resolve this, and something i began doing over 20 years ago, is to not over build and make the model complex. it&#8217;s to start by having a one-day workshop with just five or six cross-functional employees of the company, organization, in a room, build a very fast model. you know, just maybe three activities per cost centers, so 10 times that&#8217;s 30 activities. if there&#8217;s 10 cost centers, have them do &#8212; just estimate the percentages of time, typically in a 10-10- 80, 30-30-40, as long as that adds up to 100%. you know, in costing, everything normalizes to 100%. and then basically what the activities, kind of trace them to product families, service line families, so forth. basically, it&#8217;s a complete model not intended to have any useful results. the key is the next day. bring in their fellow line managers and the executives. they see it, it&#8217;s engaging. it&#8217;s their company. the lightbulbs go on with everybody. oh, that&#8217;s how we get rid of that butter spreading. oh, now we can truly see our profit margins. oh, now we can know which customers are more or less profitable. oh, now we can do benchmarking with apples and apples, not apples and oranges. oh, oh , oh. it&#8217;s accelerated learning, and they get buy in. you can ask them, when this model is done in two to three weeks, what will you do with it? so, we&#8217;re getting them to commit. then for three or four days, you make the model a little deeper. decompose some of the activities. replace some of those percentage estimates with quantity drivers. maybe do that another iteration or two. within three to four weeks, permanent, repeatable production system. you know, you get, you know, you don&#8217;t get &#8212; with the old way, you get diminishing returns on extra accuracy for the extra level of effort to work. well, they put in way, way too much effort. that model gives you 95% accuracy. so, why spend more effort to go to 96%? you know, i always say is the higher climb worth the better view. this is management accounting. this is not external financial statutory reporting for compliance. i tell the accountants, for statutory reporting, you get the numbers wrong, you go to jail. management accounting, you get the numbers wrong, you don&#8217;t go to jail. so, get it done quick and better.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>but you also stated that a problem is that the budget is disconnected from company&#8217;s strategy, and that the strategy map with its associated balanced scorecard can resolve this. so, what are some of the challenges in implementing them? and how can the challenges be overcome?<\/p>\n<p><strong>gary cokins\u00a0\u00a0<\/strong><\/p>\n<p>well, one of the challenges is how to define, you know, what are key performance indicators. and i think i need to put a little bit of backdrop quick primer on the strategy map, the balanced scorecard. they were created by harvard business school professor robert s. kaplan, who incidentally also did the pioneering work in activity-based costing. i got trained by him at kpmg in 1988. and the strategy map then feeds the balanced scorecard. many people have heard about the balanced scorecard, but it&#8217;s just a feedback mechanism. the real intelligence is in the strategy map. and what kaplan and dr. david norton, his associate, realizes executives were overreacting to financial results reported at the end of the period. they said, you need to shift your attention to non-financial metrics collected during the period. and i encourage people go to &#8212; google it, or if you go to my website, www.garycokins.com. there&#8217;s tabs, there&#8217;s free articles that i&#8217;ve written. they created this map with these four perspectives. they go from bottom to top, learning and growth, to process improvement, to customer satisfaction, retention, and loyalty, to financial. in each of them is three or four strategic objectives. and that&#8217;s the map. you&#8217;ve got these strategic objectives and if they&#8217;re all basically being accomplished, and the executives put targets on the kpis to measure, then basically we&#8217;re aligning everybody&#8217;s behavior with the strategy and we get strategy, you know, execution. a definition of a kpi: monitoring the progress towards accomplishing the strategic objectives. you know, so it&#8217;s really a strategic monitoring tool. it&#8217;s not an operational tool.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>well, let me ask you this. there are the kpis, key performance indicators. and then there are operational performance indicators. so, what are the similarities, differences between both?<\/p>\n<p><strong>gary cokins\u00a0<\/strong><\/p>\n<p>they&#8217;re all important. they&#8217;re both types of measures, but they serve different purposes. the kpis, and where i learned about kind of, right sizing the model is i asked organizations, oh, you&#8217;ve got a balanced scorecard. how many kpis? we have 300. oh, that&#8217;s great. 300? how can they all be a k? they can&#8217;t all be a key, which made me realize you really should only have two to three key performance indicators for each objective. but if you &#8212; what&#8217;s called cascading, cascading down from those kpis, you then start saying, well, these are the operational ones, like on-time delivery performance, customer satisfaction. they&#8217;re not strategic, but by accomplishing and performing them, they contribute to the strategic kpis. so that&#8217;s the difference.<\/p>\n<p><strong>steven sacks\u00a0<\/strong><\/p>\n<p>okay, thank you for that. we touched a bit during a prior webcast on the adoption rate of progressive management accounting methods. and we both observe that the adoption rate is rather slow. what reasons can you provide for this? and how can the adoption rate be accelerated?<\/p>\n<p><strong>gary cokins\u00a0<\/strong><\/p>\n<p>well, let me just reinforce. i&#8217;m extremely frustrated by this slow adoption rate. it&#8217;s pathetic. i mean, kaplan created activity-based costing. he didn&#8217;t create it. he just researched it. he didn&#8217;t invent it. it&#8217;s just full absorption costing. you know, 40 years ago, i have empirical evidence that only a roughly five to 10% of organizations that should be using abc are doing it. the other 90% are doing that butter spreading, which means they&#8217;re getting flawed and misleading information to their managers. so, one of the barriers can be it-related, you know, dirty data, low quality data. but the it functions got tools. one&#8217;s called extraction, transform, and load &#8212; etl &#8212; that purifies the data. for larger companies, they may have different hardware. we got dell equipment, we got hewlett packard equipment, we got ibm equipment. that can all be solved. a second barrier is this perception of that it&#8217;s too complex, not affordable, too difficult to do. i just mentioned how you can put in an abc model &#8212; not six to nine months with timesheets and 3,000 activities &#8212; within three to four weeks. similarly, with the strategy map, i am another workshop that can build a strategy map, a balanced scorecard in one day. so, that&#8217;s an issue. but the real barriers got nothing to do with software, nothing to do with methods, nothing to do with substance. it&#8217;s people. and it starts with resistance to change. resistance to change is human nature. people like the status quo. only babies like change. you know, diapers. but other related ones is fear of knowing the truth, or fear of other departments knowing the truth, or fear of being measured, fear of being held accountable. weak leadership. i just said it. you know, not &#8212; the iqs of every executive team are not necessarily always at the top. so, you notice those have nothing to do with systems or methods. it&#8217;s about people, which basically means to overcome some of these barriers, you really need change management, social change management, and quite frankly, most accountants &#8212; and i don&#8217;t want to offend them &#8212; you know, they&#8217;re not skilled at this. they don&#8217;t you know, they, how many of them have degrees in sociology or psychology? none. they&#8217;re all newtonians. and you and me are newtonians. what i mean by newtonians, isaac newton to us, and them, the world&#8217;s a big machine. they just want the levers, pulleys, dials. they have to be a little bit of darwinian, like charles darwin sense and response in organism. so, it&#8217;s tricky to figure out how do i get the buy in to basically proceed.<\/p>\n<p><strong>steven sacks\u00a0<\/strong><\/p>\n<p>so, if there&#8217;s one takeaway that you would like our audience to remember and perhaps even employ in their companies, what would that be? and secondarily, are there any resources that can be used to reinforce or expand on some of the concepts that we addressed today?<\/p>\n<p><strong>gary cokins\u00a0<\/strong><\/p>\n<p>takeaway is don&#8217;t underestimate resistance to change. it&#8217;s big. and so, you really got to think about how do i get by and what are the techniques\u00a0 &#8212; and, that would be a webinar on a whole other topic by you know, change management people. i have some ideas how to do that.<\/p>\n<p><strong>steven sacks\u00a0\u00a0<\/strong><\/p>\n<p>well, i want to again, thank you, gary, for sharing your insight on this. i think it&#8217;s important\u00a0 &#8212; a couple of takeaways that i got from this is, one is the measuring for accountability, because if performance and raises and promotions are based on true analytics, you know, that are substantiated, that are pure, that are reliable and relevant, that would help change the mindset. and rather than being slow to adopt these change management methods, i think you&#8217;d see an acceleration towards embracing them.<\/p>\n<p><strong>gary cokins\u00a0<\/strong><\/p>\n<p>absolutely. and, you know, i&#8217;m not an expert in motivational theory. but that&#8217;s really what you&#8217;re sort of referring to. and compensation and bonuses &#8212; kind of a subset that&#8217;s in there. and, you know, back to the strategy map with kpis thing, when the executives set targets on the kpis that have been selected, and selecting the right ones is part of the challenge, it&#8217;s like the carrot with the mule on the donkey. you&#8217;re basically aligning people\u2019s &#8212; you know, you get what you measure. you can&#8217;t measure it, you can&#8217;t manage it. you can&#8217;t manage it, you can improve it. so, when different teams are held accountable with trying to meet that target, and hopefully the executives didn&#8217;t create stretch targets that are not stretchable, just practical. you&#8217;re effectively lining everybody up. you&#8217;re like synchronizing, like the rowers and the olympic, you know, crew. everybody&#8217;s stroking together.<\/p>\n<p><strong>steven sacks\u00a0<\/strong><\/p>\n<p>thank you, gary.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><a href=\"\/\/www.g005e.com\/?p=86076\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-86080\" src=\"\/\/www.g005e.com\/wp-content\/uploads\/2021\/07\/screen-shot-2021-07-19-at-11.20.15-am.png\" alt=\"\" width=\"207\" height=\"100\" srcset=\"\/\/www.g005e.com\/wp-content\/uploads\/2021\/07\/screen-shot-2021-07-19-at-11.20.15-am.png 760w, \/\/www.g005e.com\/wp-content\/uploads\/2021\/07\/screen-shot-2021-07-19-at-11.20.15-am-300x145.png 300w, \/\/www.g005e.com\/wp-content\/uploads\/2021\/07\/screen-shot-2021-07-19-at-11.20.15-am-600x291.png 600w, \/\/www.g005e.com\/wp-content\/uploads\/2021\/07\/screen-shot-2021-07-19-at-11.20.15-am-424x205.png 424w\" sizes=\"auto, (max-width: 207px) 100vw, 207px\" \/><\/a><\/p>\n<h6><span style=\"color: #00a160;\">^ <a href=\"\/\/www.g005e.com\/?p=86076\"><span style=\"text-decoration: underline;\">click to play video<\/span><\/a><\/span><\/h6>\n<p><strong>gary cokins on predictive accounting and driver-based budgeting.<\/strong><br \/>\n<em>with steven sacks<\/em><br \/>\n<em><a href=\"\/\/www.g005e.com\/shop\/ss20tnf\/\">the new fundamentals<\/a><\/em><\/p>\n","protected":false},"author":1892,"featured_media":86080,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3184,1905,1362,2327,2734,3120,3002,2764],"tags":[],"class_list":["post-86076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advisory","category-clients-and-service","category-featured-video","category-innovation","category-podcast","category-pro-member-exclusive","category-special","category-video"],"acf":[],"yoast_head":"<!-- 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