Are You Playing Offense or Defense for Your Organization?

I want to argue that management accounting should primarily be contributing to the Offensive function in an organization.

What am I talking about?   Accounting traditionally focuses on control and accountability, Defense, to create a sports analogy. The well known “3 lines of defense model” puts finance in the second line – providing more objective oversight than the first line which is made up of operating executives, managers, and personnel.  I heard the analogy that finance is part of the “braking system” that allows the “engine” to go faster with more control.   I see these perspectives as having some value, but….

Business is won with Offense, not Defense.   Offense is finding or developing new and more profitable markets, customers, products, services, distribution channels, and much more. Defense is important – avoiding loss and mistakes enhances growth and profitability - but it doesn’t create a winning capability.   PACE focuses on Offense:

• Better Revenue Management to improve profit by growing revenue, differentiating customer needs and pricing them more appropriately, identifying new revenue opportunities with existing capacity, evaluating sales patterns for revenue enhancement opportunities, understanding customer behavior and its impact on costs and operations, and much more.

• Improving Managerial Costing to reflect causal operational resources and processes to ensure you are only applying costs to customers, products, and services when value is created, ensure costs reflect the actual economics of the production/service delivery, ensure costs can be causally projected to forward looking scenarios for strategy development and execution adjustments.
  

• A more comprehensive and realistic view of Investment in your organization’s productive capability.  A view that looks at both intangible and tangible investments.  A view that applies the consumption of investments from use in an economically realistic manner to the output and goals of the organization for long term viability and success.
  

Yes, I know a lack of Defense is fatal in business and sports; but an overfocus on Defense is also a path to failure or mediocracy at best.  

My goal, one that I share with PACE, is to focus on and improve the capabilities of management accountants as Offensive players and team members for their organizations.