The Management Narrative Makes Room for Finance

DRUCKER
In an earlier column titled “The Drucker Curse,” I argued that Peter Drucker, the much acclaimed 20th-century management thinker, could be found guilty of drawing an “iron curtain” across the corporation, a barrier designed to segregate a fledgling but maturing management narrative from a robust and authoritative finance function.

I wrote that his influential writings routinely ignored finance, and while I have read many Drucker texts and found this to be largely accurate, I should mention herejeremyhope that this observation was first made to me by the late Jeremy Hope, author of various management texts, including Reinventing the CFO (Harvard Business School Press,2006).

Five years ago, when I was interviewing Jeremy for a magazine article, he told me that Drucker and other management thinkers of the past century did not fully appreciate the impact that financial controls have had on organizations because they rarely if ever were themselves “finance people.” And so it was that in the 1950s, when Drucker first began writing about the shift from a command & control structure to an information-based organization, the financial best practices needed to guide and incentivize workers seem to have been altogether removed from his line of sight.

Sixty years later, the management narrative is finally being integrated by intrepid finance leaders who are busily embedding their teams along the front lines of the business (view video above). Finally, industry’s finance and management narratives are shoulder to shoulder in sharing the load and pulling the enterprise forward.

Still, these two narratives stood as separate volumes on different shelves for most of the 20th Century. If only Drucker had reflected a little more on the fact that it was GM’s CFO, and not its celebrated CEO, who had invited him inside to take a look around, perhaps, things may have been different.

Other Posts By Jack Sweeney

Why B2B CFOs Are the MVPs of the Content Marketing World

How Did You Become a CFO? Retooling Your Finance Narrative to Look Ahead

The CFO & The Mustard Seed: A Parable of Finance and Innovation

8 Comments

  • Tom Hood

    Reply Reply January 31, 2015

    Jack,

    Love your podcast! You make a great point In outlining the shift in Finance/Accounting in a rapidly changing world. The challenge for CFOs is to make the shift from authoritative to collaborative and from working in the ‘known’ stable space to the changing and unknown space. This requires both a shift in mindset and a shift in skills and competencies. Thanks!

    • jack@cfothoughtleader.com

      Reply Reply February 2, 2015

      Thanks Tom!

  • Brandon

    Reply Reply February 2, 2015

    Thank you for the easy to consume article! I love when people write shorter blogs that I can actually read in 3 minutes!
    Oh and nice work with the screen flow!

  • Maritza Parra

    Reply Reply February 2, 2015

    Just got Peter Drucker’s book on audio – perfect timing for me to have read this to have a new set of eyes (ears in this case) with which to consume the information. Thanks!

  • Dean Patino

    Reply Reply February 2, 2015

    Jack, really appreciate the white boarding explanation. It’s exciting to see this shift taking place, long overdue!

  • Jodi Flynn

    Reply Reply February 2, 2015

    Great content, Jack! This is a change that needs to be made. I’d love to see a post on how the CFO can impact the decentralization of decision-making so there is a more collaborative environment.

  • Nerdy Creator

    Reply Reply February 3, 2015

    Hi Jack, I love your whiteboard video explanation. Would love to try that in the future.

    I used to be an auditor and accountant. From my experience, I see that collaborative environment works better. Because the staff doing the ground work know the details and information that management may have overlooked. So getting them involve in decision making does help.

  • Jaime

    Reply Reply February 6, 2015

    Whoa! So much to learn – so much value in your podcast!

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