Using management accounting to lengthen the time frame of managers

Key findings: • Focus on a company’s separate profit centres, discrete transactions and monthly budget achievement indicates it has a short-term orientation.

• Profitability arises over the long-term ‘customer life cycle’. So managers and salespeople need to have lengthened time frames, redefined conceptions of effective performance and a focus on long lasting customer relationships.

• Building and maintaining long lasting customer relationships requires information gathering and use in a systematic process that can be measured.

• Changing the behaviour of employees to match these requirements involves challenging existing practices, attitudes and methods of communication.

• Performance indicators during the change should focus on both the process and the results, and employees and managers need to be trained in their use.