Relevance Regained

Building on his pathbreaking, awardwinning bestseller, Relevance Lost, H. Thomas Johnson presents a devastating critique of the topdown hierarchical accounting systems that have dominated American corporations since the 1950s.In Relevance Regained, Johnson shows exactly how managing by remote control through resultsoriented accounting information has obstructed the real business objective: to reduce process variation and lead times for the purpose of obtaining and keeping satisfied customers. The failure of most American businesses to be competitive and profitable, he contends, is their reliance on management accounting information to control peoples actions and productivity.Costfocused imperatives from on high must be replaced, Johnson asserts, with information systems that link actions with imperatives of global competition. Selfmanaging work teams, according to Johnson, must own problemsolving information to reduce variation, delays, and excess in processes.Johnson prescribes the necessary changes in management principles that must replace the outdated style associated with the industrial revolution. Responsiveness to customersnot accounting costsand flexibilityreducing lead times and removing constraintsare necessary for sustained competitive excellence and longterm profitability.Johnson discusses the radical overhauls of companies, such as General Electrics workouts/best practices program and HarleyDavidsons work simplification programs, and shows how these strong commitments to new strategies maximize a companys most important assets: people and time. To be globally competitive, he claims, a companys work must be directed toward selling to customers, not just selling products.