Education Goes Bad

Willie Sutton explained in his autobiography that he never actually explained his bank robbing as being motivated by the money’s location. Sutton just liked robbing banks. He collected the money as evidence that he’d done it. Willard, on the other hand, has acknowledged he’s going to D.C. ’cause that’s where the money is. He’s got a Willie Sutton complex.

Guess where he got it? At the Harvard Business School.

…the legend has resulted in the “Willie Sutton rule,” used in activity-based costing (ABC) of management accounting. The law stipulates that ABC should be applied “where the money is,” meaning where the highest costs are incurred, and thus the highest potential of over-all cost reduction is.

Willard’s going to D.C. to practice his ABC because, apparently, he doesn’t know it’s our money and that the White House doesn’t control it.

Yes, the speech was from 2002, when he was touting his ability as the prospective Governor of Massachusetts to extract money from Washington for the citizens of his adopted state, which he ultimately failed at. So, now he wants to take up official residence there, so he can “practice his love,” as Dubya would say.

No doubt, Willard is consistent. His objectives are always the same — to cut other people’s money and get more for himself and his cronies. That the banksters don’t have total control of the money must be really galling. Imagine having to contend with 315 million Willie Suttons coming after their money.

Reminds me of an old story:

A city slicker gets lost in rural New Hampshire. He sees a farmer working in a pasture full of boulders and stops to ask for help. After the farmer gives him directions, the city slicker wants to know where all the rocks came from.
“Glacier left ’em”, the farmer says.
The city slicker looks around, asks, “Where’s the glacier?”
Went back for more rocks.

Hard to know if Willard’s like the city slicker or the glacier — or an instinct-driven force of nature.

Note the farmer’s brevity compared to this explanation of ABC:

With ABC, an organization can soundly estimate the cost elements of entire products and services. That may help inform a company’s decision to either:
Identify and eliminate those products and services that are unprofitable and lower the prices of those that are overpriced (product and service portfolio aim)
Or identify and eliminate production or service processes that are ineffective and allocate processing concepts that lead to the very same product at a better yield (process re-engineering aim).
In a business organization, the ABC methodology assigns an organization’s resource costs through activities to the products and services provided to its customers. ABC is generally used as a tool for understanding product and customer cost and profitability based on the production or performing processes. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing, identification and measurement of process improvement initiatives.

Not only is the verbiage dense, but the very idea that management should be evaluated (accounted for) by cutting costs where the work (activity) is actually done is a signal that the proponents of this theory are committed to indirection — that is, they aim to accomplish one result by affecting something else. Management is good when workers cost less.

What Willard is spouting is not a happenstance. However, ABC has already fallen out of favor because it doesn’t work to produce value. Duh!
Imagine assessing the quality of a musical composition by the number of notes!


Editor's note: This story originally published at Hannah's Blog. Mitt Romney - Caricature Image: By DonkeyHotey from his flickr photostream and used under creative commons license.

Monica Smith

Monica Smith writes Hannah's Blog. Born in Germany, she came to the United States as a child, living first in California, then after an interval in Chile, in New York. Married to a retired professor at the University of Florida, where she lived for 17 years, she moved to St. Simons Island, Georgia, in 1993 and now divides her time between Georgia and New Hampshire. (New Hampshire, she says, is always interesting during a presidential election.) She and her husband have three children and five grandchildren. Ms. Smith says she "learned long ago that I am not a good team player when I got hired at the Library of Congress, fresh out of college with a degree in political science and proficiency in four foreign languages, to 'edit' library cards and informed my supervisor that if she was going to insist I punch the clock exactly on time, my productivity was going to fall from being the highest to being the same as everyone else's. The supervisor opted to assign me to another building where there was no time-clock. After I had the first of our three children, I decided a paycheck wasn't worth the hassle."