Are Your Accounting Methods Killing Your Progress?

Article Revised: March 26, 2019

Accounting methods have not kept pace with progress in the process excellence arena. Six Sigma, Lean, and the Theory of Constraints all look at the organization as a way to deliver value to stakeholders by way of processes and value streams. However, accounting practices continue to look at individual activities, capital equipment expenditures, and resource allocation as a collection of unrelated expense items. Since middle managers (and even senior leaders) are assessed and compensated based on their ability to deliver “the numbers,” they tend to take actions that suboptimize value streams and processes. These actions can be a dagger in the heart of true process excellence.

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