Millennium Marketing Research®

Tom Schori DBA Millennium Marketing Research®, 808 Ironwood, Normal IL 61761, 309-532-8466

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When a company is run by 'bean counters.'

By Thomas R. Schori, Ph.D., and Michael L. Garee, Principals,  Millennium Marketing Research, 808 E. Ironwood, Normal, IL 61761-5239. Tel. 309-532-8466 -

The professional backgrounds of top management of companies, particularly American companies, have tended to run in rather predictable cycles. During one cycle the "sales and marketing" people may dominate, and during another, the "lawyers" rise to the top. For a long time running now, one group above all others has consistently dominated business¾the "finance people," or, to use the pejorative, the "bean counters."

Now, before all you "accounting types" reading this bombard us with your vitriol, hear us out!

Is it "good news" that many of our top business leaders have finance backgrounds, or is it "bad news"? In our humble opinions, and based upon many years of working in and critically observing American business, we contend that it has the potential for being a little of both. First, let’s look at the "good news" aspects.

One of the most critical concerns of top management in any company is cost control. Without it, no matter how good the company’s products and services might be, the longevity of the company can be seriously in question. Who is best equipped to understand, and then to oversee implementation of effective cost controls within a company? The "bean counters," of course. So, here they indeed serve a very useful business purpose.

Another vital concern for a company is maintaining good "cash flow," i.e., making sure there is always enough money to pay expenses by making sure there is a constant, predictable inflow of receivables. Again, the "bean counters" excel at this.

Yet another matter of prime importance is making sure that any profit realized from the business venture is invested in such a manner as to provide a good mix of security and maximum earnings. Once again, the "bean counters" usually are unparalleled in their ability to accomplish this task.

Now, for some of the "bad news" aspects of having "bean counters" at the helm of a company.

Just as a wise person wouldn’t usually hire a "marketing type" to perform the various finance operations within a company, it is usually an equally bad idea to hire a "bean counter" to perform the marketing function. Nonetheless, if a "bean counter" occupies the top position, expect him or her to put fellow "bean counters" in virtually all the key management positions, including marketing! Why? Because he or she usually feels most comfortable with other "bean counters," that’s why. Admittedly, taking this course of action, i.e., hiring people very much like ourselves, is not all that uncommon. Still, it hardly ever makes good business sense.

Since marketing is our area of specialty, we’ll limit our examination of why putting a "bean counter" in charge isn’t generally such a good idea for that area.

While there are always exceptions to any rule, usually it would be difficult to find two types of people more unlike each other than "marketing types" and "bean counters." The marketers tend to be extroverted and people-oriented and the finance people tend toward introversion and are detail-oriented. As long as each sticks to his or her own area of expertise, the characteristics of each serve them usually quite well. It’s when one or the other ventures into the other’s area of expertise that problems, sometimes problems of monumental scope, ensue. Let us give you an example.

We once worked in the marketing and research department of a regional insurance company. The chief executive officer was an accountant by training. Predictably, virtually all the key management people also had accounting/finance backgrounds. The vice president in charge of the marketing and research department (our department) was also an accountant. And, while basically a "good guy," rarely did a week go by that sparks didn’t fly between this VP and our department. Why? Well, for one thing, having been the controller for one of the business units before assuming his new VP position, he insisted that everything undergo a quasi-audit before ever seeing the light of day. That included survey questionnaires, overall research designs, final reports, etc. The end result was quite predictable. While every aspect of research and marketing was "orderly," it rarely was effective or useful to the organization.

Thankfully, this VP didn’t oversee the marketing and research function for very long. Even the "bean counter" CEO finally had to conclude that putting him in charge of the function clearly was a very bad, bad idea!

In fairness to "bean counters," the result would have been equally disastrous for the company¾ probably even more so, actually¾if a "marketing type" had been CEO and he or she put a fellow "marketing type" in charge of, say, accounting!

The "bottom line"? Companies headed by accounting/finance types can be (and certainly are, in some cases) excellently run companies¾ if the CEO doesn’t fall into the easy trap of thinking only fellow accounting/finance types are qualified to head up all the important functions and operations. If the CEO does fall into that trap, chances are great that he or she may end up with a very fine accounting firm, but if that’s not the business the company is in, it is headed for trouble, deep trouble!