As a CPA with over 30 years of accounting experience, I certainly had to swallow my pride as I read this book. Dr. Lee provides compelling evidence that you cannot rely on accounting information alone to make cash decisions.
—Michael Hales
Chief Financial Officer
Northern Kentucky University
Epictetus, a Greek Stoic philosopher, is reported to have said that many things in this world are not and yet appear to be. Such is the case with many of our traditional definitions and descriptions of “cost savings” as described in so many accounting texts. Dr. Lee has taken a page from Epictetus in pointing out that we need a new paradigm of defining a “cost saving” if we are going to really provide the necessary information needed to manage a business or use accounting information to make more informed business decisions. This book is clearly a game changer in that regard.
—Dr. Joseph F. Castellano
Professor Emeritus, University of Dayton
Dr. Lee has committed to educating business executives in a way that drives real, generational change. Strategic Cost Transformation is written to accomplish just that. We all want to get to the future ahead of our competitors and to be the early adaptors of the next wave of change, and this highly effective roadmap moves us immediately from idea to reality in a surprisingly doable way. When I first saw Reginald present his ideas, I immediately knew there was something necessary and urgent to his ideas that my company needed to implement. Strategic Cost Transformation is outstanding and does not disappoint. As a lifelong accountant and businessman it energizes me to bring my team’s talents and experiences to become more deeply involved with operating processes and cash flows, thereby creating exceptional profitability and competitive advantage.
—Steve Zofkie
Chief Financial Officer, Applied Mechanical Systems, Inc.
Technology has fundamentally changed our role with clients, the way we show up to execute that role, and also our responsibility to create, capture, and communicate value.
In this new world, the training, mindset, skills, approaches, and experience that got us to where we are now are not going to get us to where we need to be. Cost accounting might make sense in a 2D transactional world where we are focused purely on metrics and understanding what has transpired in the past. In that realm, we got some comfort from tracking time (efficiency) and creating subjective mathematical relationships that only matter to us, not our clients.
Cost accounting has become a kind of anesthesia for not having the impact and results that we must have in order to remain relevant to our clients. We now find ourselves in the business of relationships and this requires us to find new measurements and drivers that are meaningful and create real impact and value in the eyes of our clients. Many authors have posited that cost accounting is not relevant but Dr. Lee is the first to prove it mathematically and offer the replacement, which is cash flow management based on objective data from the operational realm. If you are an accountant or studying to become one, I recommend this book to you highly.
—Rhondalynn Korolak
Lawyer, accountant, best-selling author, advisory expert and Managing
Director of businest® and Make the SHIFTTM
Traditional cost accounting didn’t hold much allure for me and still doesn’t. After my introduction to activity-based costing and the theory of constraints almost 30 years ago, I thought the path was clear to begin adding true value to the enterprise using these disciplines as an AND rather than an OR for better systems thinking, better internal decision making and to make money. I successfully focused primarily on enterprise-wide process cost measurements for the next 30 years in the service industry, building ever more strategic, financial and operational deliverables. However, my Quixotic adventures to leverage ABC methodologies into cash and capacity analysis were particularly challenging and victories came at great costs. I needed a better solution. This book provides that solution—lighting the way through an important new discipline and understanding focused on separating cash and capacity to operations analyses from those that focus on cost accounting measurements. Dr. Lee’s book is recommended reading for every FP&A department with a mission of aligning its resources to the enterprise’s corporate goals and objectives.
—Jeff Enyart
Former Second Vice President, Finance & FP&A
Ohio National Financial Services
I’ve been an Operations Controller for the past 15 years and actively involved in manufacturing for the past 25 year. After reading Dr. Lee’s book the word anticipation comes to my mind. Finance must understand where the operations will end up after strategy and operational performance, execution. As a result we need to anticipate where, what, and when our companies will meet their targets, and most importantly, if those decisions will lead us to a favorable cash position. As well the book provides a comprehensive approach on how to dissect accounting and operational performance measures, measures that accounting will not support for the new CFO’s role we are living.
—Luis Manuel Hernández
CEO, KMCM Consulting Services, Inc.
Secretary and Member of the Board of México Manufacturing Industry Council (Index)
Once again, Reginald has opened the door for a more expansive discussion around a core business practice. Having studied engineering myself, I understand the reference to thermodynamics but I rarely have never seen it used in this context, well done. This creates a simple dialogue within our businesses that more effectively focuses on the proper separation of running versus reporting.
—Joe Morgan
Founder and CEO
siY, LLC
Former President and Chairman
SONY Chemicals Corporation of America
Former President and CEO, Board Member Standard Register
In this book, Reginald Tomas Lee sheds new light on the traditional way we think about strategic costs.
As companies fiercely compete against each other, solving problems related to cash, profit, and costs demand different innovative thoughts, new ideas, and vision used in synergy with a single objective in mind: Making money.
Reginald introduces the reader to a new and alternative take on cost management, while presenting important operational guidelines for companies that wish to maximize results. He instigates a paradigm shift and presents you with new lenses with which to see how financial performance should be managed.
All of this rather complex content comes in a light, but richly detailed reading.
—Simone Espindola de Oliveira
Manager/Partner of Tecnosul Consulting Cost Engineering,
Blumenau, Santa Catarina, Brazil
Dr. Lee continues his crusade against one of the single most dangerous tools of business: Cost accounting.
Having previously proved that cost accounting is the perfect example of the mantra that there is no right way to do the wrong thing, Strategic Cost Transformation now provides the roadmap for doing all the things cost accounting purports to address—and so spectacularly fails at.
If Alvin Toffler’s view that the “illiterate (are) ... those who cannot learn, unlearn, and relearn” is correct, then Lee’s latest book should provide the catalyst for literate business owners to finally abandon cost accounting, even if the accounting professionals refuse to.
—Matthew Burgess
Director, View Legal (a timeless law firm)
As a one-time practicing lawyer, I was taught long ago the gospel according to cost accounting. Indeed, cost accounting seemed to the largely innumerate legal profession such a simple, precise, and acceptable doctrine, and formed the bed rock of most professional firms’ business model of leveraging people × time × hourly rate. Measurements and rewards of profitability were and still are in most professional firms being made based on cost accounting doctrines. What a shock and relief it was to me to read Dr. Lee’s book Lies, Damned Lies and Cost Accounting, which exposed the fraud and the big con that is cost accounting.
Now with Strategic Cost Transformation Dr. Lee not only builds on his expose of cost accounting but also postures a much better, accurate, and effective model to guide the most forward thinking professionals and business owners. Whether the hard core cost accounting aficionados are ever prepared to admit “we were wrong” is another thing entirely.
—John Chisholm
Adjunct Professor, La Trobe Law School
Fellow Elect, College of Law Practice Management