The Lean CFO: Architect of the Lean Management System

by Nicholas S Katko

This book is not about debits, credits, or accounting theory. Instead, it describes how a chief financial officer (CFO) becomes a Lean CFO by leading a company in developing and deploying a Lean management system. The finance team, business executives, and Lean leaders will all benefit from its forward-thinking improvement approach.Explaining why the CFO role is so critical for companies adopting a Lean business strategy, The Lean Architect of the Lean Management System illustrates the process of building and integrating a Lean management system into the overall Lean business strategy. It describes why CFOs should move their companies away from performance measures based on traditional manufacturing practices and into a Lean performance measurement system. In addition, it explains how to integrate a Lean management system with a Lean business strategy to drive financial success.Describes the logic behind why a Lean management system must replace a traditional management accounting systemDiscusses how flow can drive the financial success of LeanDemonstrates the need for constructing a value stream capacity measurement systemExplains how to break your company away from using standard costing to run your businessThe book explains why you must move your company into value stream accounting, which reports your internal financial information by the real profit centers of your business, your value streams. It describes the strategic aspects of making money from a Lean business strategy and also details how to modify your enterprise resource planning system to support Lean rather than hinder it.

Genres: Management, Finance, Business

151 pages, Kindle Edition

First published September 3, 2013

Reviews

[Kostiantyn · Rating 4 out of 5]

A CFO or Chief Financial Officer is a person who takes care of many things. Including accounting and payroll, although not directly. Financial policy, financial strategy, financial planning… and many other weird things. But this is in theory. In reality, at least in mine, these guys usually see Lean (TOC or Six Sigma) as purely cost-cutting projects.

So how can a CFO be lean?

This is exactly what Nicholas Katko is trying to explain in his book. Not lean accounting, not lean manufacturing, not lean something else... And reading this book, I felt that a lean turnaround should start with a Lean CFO.

But these are just my feelings. The fact is that this book could be a good addition to the works of Womack and Jones, Liker and those two gentlemen from Germany. They all pointed out that Lean as a methodology requires a change in mentality (especially in how we see finances in the organization), but does not provide much guidance on this.

I really enjoyed reading this book. Despite its main focus, it talks a lot about value streams and value stream mapping, Gemba walks and leader standard work, flow and pull... But again, you cannot change the accounting system of an organization with this book. But you can try to challenge CFO.

[Victor Mroczkowski · Rating 3 out of 5]

A good book to help readers reflect on the cause and effect relationship between financial performance and true Lean operating practices.

In the end, lean management accounting systems should improve the quality of decision making, and Katko’s book offers good insights for the journey.

[Bot Palacol · Rating 5 out of 5]

Good for CFOs

Take time to read if you want to be a good CFO. Goes beyond traditional costing methods, and considers value stream accounting.

[Manual Rewad · Rating 5 out of 5]

very good