‘Don’t get set into one form, adapt it and build your own, and let it grow, be like water.Bruce Lee
You must be shapeless, formless, like water.
When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle.
When you pour water in a teapot, it becomes the teapot.
Water can drip and it can crash.
Become like water my friend.’
These Bruce Lee’s words have inspired and continue to inspire many martial artists. This concept has its origin in the Taoist philosophy and can be applied to many everyday life situations.
Today we try and interpret this concept, applying it to a specific field that concerns us closely: the financial reporting.
In past years most companies have adopted a static and standardized approach in managing the company performance in an equally fixed market context without any particular field specificity. We could define this period as the “monolith era”, namely the time of the large multinational groups operating in multiple markets, relying on the group synergies and on the know-how that could be easily transferred from the holding to its subsidiaries.
Nowadays, competition has taken a different turn. The new economy and the global economic crisis obliged companies to make a greater effort to reach their goals. Disruptive events, such as Brexit or the entry of the ‘millenials’ on the consumer markets, must be faced promptly and with ability to adapt to new contexts. In this situation, many startups have had the chance to leverage their small size and their dynamism as critical success factors. Nevertheless, after a period of growth in sales revenue and profit, the time came for them to adopt a scientific and structured approach to the performance management.
Therefore, the issue is the following: it is necessary to find the right set of indicators to monitor the trend of the results, to assess the strategy adopted and (if possible) to undertake corrective measures. But what to do if the indicators and the information change at every closing? What if we move from the simple profitability to the business sustainability?
Bruce Lee gives us the answer to this question.
Our financial reporting system must be like water. It must be able to adapt to the context in which it is applied. This is especially true for large groups that must manage businesses of different sizes in different contexts.
The basic concept is that there is not a better set of information than others, but a system able to organise and browse a consistent database as fast and efficiently as possible.
Here is how companies can become like water: by putting the financial information structure first, without focusing on the current reporting and compliance needs. Relying on a CDO and a CFO who can interpret the operating flow and related data assembled in a well-organised and unique database available to all transactional and business intelligence systems (even better if integrated in a single Corporate Performance Management platform).
Returning to Bruce Lee’s metaphor, the companies that become like water can adapt their fighting style to their opponent and deal the final blow at the appropriate time.
So my friends, if you want to get a black belt in your business, follow the teaching of master Lee and be like water.
(view this post on Tagetik Official Blog)