Interview Gary Cokins SAS Institute

Here is an interview with Gary Cokins , a well respected veteran of the Business Intelligence industry working with the SAS Institute. Gary has just launched his sixth book (wow!) and the gentlemen he is , he agreed to answer these questions en route to his constant traveling.Gary is the expert on performance measurement so we decided to quiz him a bit on this.

CIO’s need to shift their mindset from a technical one to a managerial one.- Gary Cokins, SAS Institute

Ajay -Gary, please describe your career journey from a freshman in college to your position today. What are the key items of advice that you would give to high school students to encourage taking science careers in this recession?

COKINS: I have been very fortunate. After receiving my MBA in 1974 from the Northwestern University Kellogg Graduate School of Management, I worked in industry for ten years. I had the luck of being a financial controller at Fortune 100 corporation division and then becoming operations manager at the same location. I then had to “eat the financial data I was serving,” and it was a true wake-up call – much of the information was at best useless and at worst misleading. Later with Deloitte I was trained on the theory of constraints (TOC) methodology which indicted cost accounting as “enemy number one of productivity.” I learned about the shortcomings with how accountants make assumptions.

In 1988, when Professor Kaplan struck an exclusive relationship with KPMG Peat Marwick, I was recruited to KPMG with about three others with similar operational backgrounds as I to implement activity based cost management (ABC/M) systems but with using an ABC/M modeling software tool. I learned from experience. Four years later, my mentor Bob Bonsack, who had moved on from Deloitte to Electronic Data Systems (EDS) recruited me to head EDS’ cost management consulting. With about fifteen consultants, I was exposed to over a hundred implementations of cost systems. It was there that I experimented with creating a two day “ABC/M rapid prototyping” method that was radically different from the multi-month approach. By starting with a quick vision of what their ABC/M system would look like, companies could iteratively re-model to the level of detail, granularity, and accuracy needed to support analysis and decisions. It did not initially require a huge system, which was why some ABC/M system implementations got into trouble. My major self-realization is that costing is accomplished by modeling cost consumption relationships – an insight that continues to evade many accountants.

When I began to see the application of strategy maps and the balanced scorecard, more light bulbs went off in my brain. I then began truly seeing the organization as a “system” where all the performance improvement methodologies and core processes are inter-connected. I realized that the technologies are no longer the impediment because they are proven. The obstacle is the organization’s thinking – and the mindset of senior management who is presumably doing the leading.

My advice to high school students take your studies more seriously than you even imagine, and spend less time text-messaging everyone you know and focus on the more meaningful relationships. They will eventually be your friends rather than just acquaintances. And take math courses!

Ajay- So what exactly do you do at SAS? And name some interesting anecdotes that led to a lot of value as well as fun for both your company and clients. How does Gary spend his daily day at SAS Institute?

COKINS: My primary role with SAS is to create and deliver thought leadership content about Performance Management leveraging business analytics. I present webinars and write articles, blogs, presentations and also books. For the last four years I have averaged visiting roughly 40 international cities where SAS offices are located to present seminars and meet SAS customers to educate them on the concepts and benefits from Performance Management methodologies.

Recent examples of having fun and providing value to organizations involved providing expert advice to the International Monetary Fund (IMF) in Washington DC and the European Patent Office (EPO) in Brussels. The IMF is at the beginning of implementing an activity based cost management (ABC/M) system whereas the EPO is completing their ABC/M system design. Both organizations were seeking tips for success and pitfalls to avoid. One of my major recommendations was to not under-estimate the natural resistance to change of managers and employees. That is, they need to focus much more on getting their buy-in than worrying if the system is perfect. The value to them is realizing that Performance Management methodologies are much more social than technical.

Regarding my daily activities, when I am not traveling, I am mainly reading articles written by other experts or journalists and then translating my relevant takeaways into content that I can educate others with. I also respond to questions and requests both internally within SAS and externally from customers, management consultants, and university faculty.

Ajay- When you were a young employee, what was the toughest challenge that you faced? What was your worst mistake and how did you overcome it? What lessons did you learn from it?

COKINS: In my first few years in business following my university graduation, my toughest challenge was persuading my supervisors, usually older men than I, to accept my new ideas. I have always been a creative thinker, almost a dreamer; and I was not accustomed to the resistance that managers have to innovations, particularly those suggested by young inexperienced employees fresh from their university schooling.

My worst mistake was developing a computer program that automatically suggested treasury cash balance transfers to optimize the corporate cash management system of my first employer, a large Fortune 100 corporation. My computer program was basically replacing the decisions made by the corporate cash manager and part of his job. I overcame this disappointment by learning what needs the corporate cash manager did have and developing a different computer program that solved his needs. With its success, he eventually accepted the first computer program.

My lesson was one should first understand what people may want rather than trying to impose on them what you think they need without involving them.

Ajay- Looking back on your distinguished career, what project are you proud of the most? What project would you do over again if given the chance?

COKINS: In 1973 I became a financial controller of a large division of another Fortune 100 manufacturer. I created a rolling financial planning and forecast software program, using pre-spreadsheet software from a mainframe (years before personal computers and Excel). The program modeled product line sales forecasts by month and integrated both the income statement and balance sheet. It became a valuable tool for the executive team to suggest and immediately see varying sales levels as a “what if” scenario builder to calculate the different profit and working capital results. The executive team marveled at how analytical software, in contrast to our transactional ERP-like system, could make sense of the complexity of our operations with thousands of products and customers.

Regarding a project that fell short of expectations, I actually did get a chance to do it over again. As a consultant with Deloitte, I lead a project designing and implementing an activity based cost management (ABC/M) system using the client’s general ledger accounting software. It took many months, and when finished it was too complex for the client to fully understand. Several years later with a similar project I applied a rapid prototyping with iterative re-modeling approach that involved the company’s managers from the first day. (I mentioned this approach in my reply to the first question.) We completed the ABC/M system in just a few weeks, and everyone understood it and also how to interpret the information for analysis and decisions. I have since been a proponent of this type of rapid learning and system design approach.

Ajay- What do people do for fun at SAS Institute do when not creating or selling algorithms? How is SAS reaching out to other members of the analytics community in terms of basic science and development?

COKINS: SAS employees are inspired by our CEO, Dr. Jim Goodnight, who founded SAS roughly 35 years ago. Dr. Goodnight loves solving problems of all flavors. For fun, but also part of our jobs, SAS employees search for problems that only computer software can solve.

SAS’ offerings evolve by listening to our customers, who are typically scientists, researchers, and business analysts. Drug development and marketing analysts are examples. Our customers are our “community.” We motivate them, with formal methods of collecting input from them, to share with us enhancements to our future versions of our software.

Ajay- Describe your new book on Performance Management from the point of a beginner. Assume that I am a college student who does not know why I should read it. Then assume that I am a CIO and have little time to read it. What is in it for a CIO?

COKINS: This is my sixth book I have written. My first four books were about activity based cost management (ABC/M) and the last two about Performance Management. What is different about this second book is it immediately clarifies the confusion and ambiguity about what Performance Management is and is not. It is also written in a humorous and simplified way with lots of analogies and metaphors, such as all of the Performance Management methodologies integrated together like gears in an automobile engine and with a GPS for predictive navigation and dashboards for feedback. Beginners perceive each methodology, such as a balanced scorecard or customer relationship management system, are stand-alone tools. There is synergy when they are integrated.

CIOs have similar needs. They need to shift their mindset from a technical one to a managerial one. Just a few chapters from this book can help CIOs see the broad picture of how all of their organizations processes fit together, and how they can be aligned to efficiently execute the ever-adjusting strategy that the executives continuously formulate with operations.

Biography and Contact Information

Gary Cokins, CPIM

(gary.cokins@sas.com; phone 919 531 2012)

http://blogs.sas.com/cokins

Gary Cokins is a global product marketing manager involved with performance management solutions with SAS, a leading provider of performance management and business analytics software headquartered in Cary, North Carolina. Gary is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974.

Gary began his career as a strategic planner FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte Consulting. Next with KPMG Peat Marwick, Gary was trained on ABC by Harvard Business School Professors Robert S. Kaplan and Robin Cooper. More recently, Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS)/ A.T. Kearney.

Gary was the lead author of the acclaimed An ABC Manager’s Primer (ISBN 0-86641-220-4) sponsored by the Institute of Management Accountants (IMA). Gary’s second book, Activity Based Cost Management: Making it Work (ISBN 0-7863-0740-4), was judged by the Harvard Business School Press as “read this book first.” A reviewer for Gary’s third book, Activity Based Cost Management: An Executive’s Guide (ISBN 0-471-44328-X) said, Gary has the gift to take the concept that many view as complex and reduce it to its simplest terms.” This book was ranked number one in sales volume of 151 similar books on BarnesandNoble.com. Gary has also written Activity Based Cost Management in Government (ISBN 1-056726-110-8). His latest books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-471-57690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1).

Mr. Cokins participates and serves on committees including: CAM-I, the Supply Chain Council, the International Federation of Accountants (IFAC), and the Institute of Management Accountants. Mr. Cokins is a member of Journal of Cost Management Editorial Advisory Board. Cokins can be reached at gary.cokins@sas.com . His blog is at http//:blogs.sas.com/cokins

and his latest book can also be previewed at http://www.sas.com/apps/pubscat/bookdetails.jsp?catid=1&pc=62401