Professor Paolo Quattrone - Who said accounting was boring? Rhetoric and the making of socie-ties

Name: Professor Paolo Quattrone - Who said accounting was boring? Rhetoric and the making of socie-ties
Uploaded: 2017-10-12T08:35:48.000Z
Duration: 2 h 32 min 29 s

Introduction

In this section, the speaker's background and expertise are introduced. The establishment of the Edinburgh Futures Institute is also mentioned.

Speaker's Background

The speaker is a professor and chair of accounting governance and Social Innovation at the University of Edinburgh Business School.

He is also Dean of special projects at the college of arts humanities and Social Sciences at the University of Edinburgh.

His research and teaching seek to change conventional views on accounting and management techniques.

Edinburgh Futures Institute

The institute aims to redefine how we understand and manage organizations, economies, public policies, and higher education.

Who Said Accounting Was Boring Rhetoric And The Making Of Society Ties

In this section, the speaker discusses how numbers have power in society. He talks about how accounting can open up conversations rather than just closing them with numbers.

Numbers Have Power

Accounting techniques are pervasive in most aspects of our lives.

Numbers have a strong power that can be used to close conversations.

However, accounting can also open up conversations by exploring the space between right and wrong.

Objectivity vs. Exploration

Despite efforts to explore the space between right and wrong, people are still fixated on objectivity, measurement, and transparency in accounting.

Recent regulations such as IFRS focus on producing objective financial reporting.

Conclusion

The speaker challenges conventional views on accounting by emphasizing its importance beyond providing accurate information for decision-making. Instead, he argues that accounting has an impact on organizational actors' behavior and plays a role in society's making. The power of numbers is highlighted, and the need to explore the space between right and wrong is emphasized.

The Problem with Measurement in Environmental Accounting

In this section, the speaker discusses the limitations of using measurement as a solution to environmental problems. He argues that focusing on measures and targets can lead to a "ticking box mentality" and overlooks the complexity of environmental issues.

The Limitations of Measurement

Focusing on measures and targets can lead to a "ticking box mentality" where people only focus on meeting those targets without reflecting on what it means for the environment.

Environmental issues are complex and cannot be reduced to a single set of measures or targets.

The speaker's collaboration with the American Forces of Beauty project ended due to their fundamentally different philosophical approach to measurement.

Transparency presupposes what you want to make transparent, which is too simple for a complex problem like accounting for the environment.

A Historical Perspective on Accounting

In this section, the speaker discusses how accounting techniques have evolved over time and how they were originally designed for managing large estates.

The History of Accounting

The word "inventory" comes from "inventio," which is the first canon of rhetoric.

Accounting emerged as a new practice for managing large estates by translating the entire framework or Ettrick into a new field that was administration.

Dolor de Acción and Dispositional Account of the Ordination

The section discusses the design, organization, and recombination of accounts in accounting. It also talks about how accounting is a pragmatic science that solves problems.

Designing Accounts

Accounts are spaces that are launching which are tall poised which then they began topics.

Once you have designed accounts, you organize them and recombine them to find solutions.

Classification and Inventory

Inventory is an interesting word that originates from two words in the Western world: inventory classification.

You do this classification because you want to invent new solutions so you draw materially your accountant on your chart of accounts then you recombine them to find a solution.

Accounting as a Pragmatic Science

In the preface of Ludovico Florio's book, he says accounting is a pragmatic science that solves problems.

The validity of accounting numbers is not in the truth but in its ability to solve certain problems or not conservation.

Rhetoric and Accounting

This section discusses the link between rhetoric and early modern accounting. It also talks about how medieval and early modern rhetoric was about interrogating what we do not know rather than transmitting messages.

Link Between Rhetoric and Early Modern Accounting

There is a strong link between the development of accounting and the translation of rhetoric into accounting.

The Jesuits were quite keen on using double-entry bookkeeping since it was their big data during early modern times.

Medieval and Early Modern Rhetoric

Medieval and early modern rhetoric was about interrogating what we do not know rather than transmitting messages.

This reflects very much in how early modern accounting was designed.

Cash Account for Jesuits

This section discusses how cash accounts were used by the Jesuits and how they viewed them as a reduction of the complexity of the order.

Cash Accounts for Jesuits

For the Jesuits, cash accounts were too much of a reduction of the complexity of the order to be fooled by numbers.

They say that it is very useful to keep track of things but they have to be careful because they are not just about cash.

The Relationship Between Finance and Non-Violence

In this section, the speaker discusses the relationship between finance and non-violence. He explains how two people had to meet and explore the space in between finance and non-violence before recording any financial transaction.

Accounting as an Instrument of Governing

The speaker talks about accounting as an instrument of governing.

He explains that accounting can be used to interrogate what cannot be counted.

The speaker mentions that data is not just given but also attributed, making planning a political issue.

He gives an example of how accounting was used to keep people together in societies during the Renaissance period.

Erie - A Successful Model for Industrial Reconstruction

The speaker talks about Erie, which was established during the fascist regime for industrial reconstruction.

He explains how Erie was successful in administering funds from the Marshall Plan in Italy after World War II.

The Italian P&L Structure

In this section, the speaker discusses how the Italians structure their P&L and how it differs from the American approach.

Italian vs. American P&L Structures

Italians structure their P&L differently from Americans.

Italian P&L structure starts with sales, cost of sales, gross margin, operating expenses, operating profit, financial income (which is normally negative), profit before tax, tax and profit.

This structure shows that everything done goes towards realizing a profit that goes to shareholders. However, for Italians, profit is a means to an end and not an end in itself.

Value-Added Planning and Budgeting

In this section, the speaker talks about how Italians changed their planning and budgeting system to focus on value-added instead of maximizing profits.

Value-Added Planning System

After negotiation with Americans in the 1940s, Italians devised a new planning system based on value-added instead of maximizing profits.

The new system was based on generating value and distributing it among peers through salaries that remunerated employees.

Employees were no longer seen as costs but as production factors contributing to the production of value just like capital does.

Interests go to banks while income taxes go to states. Dividends go to shareholders while retained earnings go back into the firm.

The Power of IRIE

In this section, the speaker talks about IRIE's power during Italy's boom period.

IRIE's Power

IRIE was a massive corporation that hired up to 400,000 people at one point in time.

The archives of IRIE are possibly as big as the building the speaker is in.

IRIE owned Alitalia, Fincantieri (which built Michelangelo), and Alfa Romeo.

The Italian miracle was done with a system of compromise between production and distribution of value.

Accounting as an Instrument of Social Order and Economic Development

The speaker discusses how accounting is used as a tool for social order and economic development. He explains that accounting offers procedures to invent what is good or bad, and it is used to plan and budget for society.

Accounting Technology for Planning and Budgeting

Accounting technology mediates the process of planning and budgeting.

It offers procedures to invent what is good or bad.

The process of budgeting and planning reinvents itself every time, depending on the needs of society.

Accounting was an instrument of social order but also of economic development.

History in Accounting

Numbers have history, figures, pictures, and history.

Figures were called "figures" because numbers were visualizations that helped with calculations.

Most visualizations are powerful management tools with religious origins.

Economics has always been a religious practice investigating the mystery of value.

Usefulness of Numbers

Nowadays, we consume numbers like snacks without understanding their meaning.

We need to understand how numbers are produced and what political, organizational, epistemological complexities are involved in their production.

Standards like calorie labels on snacks tell us how much we're consuming.

The Grid as a Rhetorical Machine

In this section, the speaker discusses the use of the grid as a rhetorical machine and how it can be used to organize speech and reduce complexity.

The Grid as an Organizational Tool

The grid was originally called "rhetorical machine" or "Mac" in reference to its ability to enlarge knowledge.

The speaker describes an Excel spreadsheet case study he used for teaching program management that utilized a grid to manipulate variables.

Drawing on classical rhetoric, the speaker explains how the grammatical dimension of the grid can be used to organize speech and interrogate unknown objects.

To use the grid effectively, one must assign each line a categorical approach such as grammatical or chronological.

Using the Grid to Reduce Complexity

By reducing complexity through organizing information on the grid, one can augment their knowledge.

However, it is important not to let objects fall into the grid and become oversimplified. Accounting is given as an example of a field that has become too focused on profit at the expense of unfolding complexity.

Accounting and Major Programs

In this section, the speaker discusses how accounting can be better understood by reading three books on rhetoric, art, and memory. They also talk about how major programs are interesting theoretically because they involve multiple stakeholders and unknown factors.

Understanding Accounting

The speaker recommends reading three books on rhetoric, art, and memory to better understand accounting.

Major Programs

Major programs are interesting theoretically because they involve multiple stakeholders and unknown factors.

In major programs, you do not know what you do not know. This makes them a theoretical space for bringing management knowledge to its extreme.

London Heathrow Terminal 2 is an example of a successful major program that was delivered on time and on budget.

Dashboard Design Principles

The dashboard used for London Heathrow Terminal 2 is divided into four areas: schedule, costs, safety, and risk. It looks like a balanced scorecard with tons of data.

Divisions in the dashboard help imagine possibilities by exploring the space in between two opposite meanings. For example, "division" means both "to see" and "to imagine."

Two opposites must be in continuous tension when designing a dashboard to see things better or imagine the future split them in two opposites because these two opposites have to be in continuous tension.

Interpreting Dashboards as Art

In this section, the speaker discusses how he interprets dashboards as a piece of art and compares it to the Middle Ages' perspective in painting.

The Aesthetics of Dashboards

The speaker interprets dashboards not as a business representation but as a piece of art.

He compares the idea of perspective in painting during the Middle Ages to how dashboards are designed today.

The speaker explains that when looking at a painting, your eye should not focus on one single place but actually goes around the painting. Similarly, with dashboards, your eye is made to go around different areas.

Balancing Complexity in Dashboard Design

In this section, the speaker talks about balancing complexity in dashboard design and how it can affect user experience.

Balancing Etta's and Curiosities

To balance complexity in dashboard design, you have to balance very Etta's (different shapes, colors, shades texture) and curiosities.

Very Etta's make your eye move across that painting or dashboard while curiosities can cause your eyes to get lost.

The key is to manage complexity without exaggerating it.

Rationality vs Reasonable Choices

In this section, the speaker discusses rationality and reasonable choices.

The Origin of Rationality

Rationality comes from "rats" which means account in Latin.

An account is drawn in a way there is immeasurable because ratio is a proportion and you want to be balanced.

Rationality is all about making reasonable choices knowing that you cannot know the full story but you can still operate and be reasonable.

Numbers Are Useful If They Help You Raise the Right Questions

In this section, the speaker talks about how numbers are useful in raising the right questions.

Moving from Answer Machine to Question Machine

The speaker argues that we want to move from an answer machine to a question machine.

Numbers are useful if they help you raise the right questions.

The key is not to get an answer right or wrong but to use numbers to help you ask better questions.

Conclusion

In this section, the speaker concludes his talk and shares a quote from Enrico Fermi.

Confusion at a Higher Level

The speaker hopes that his lecture today made us confused but at a much higher level.

He shares a quote from Enrico Fermi who said, "Do we know more about nuclear physics?" and he replied, "No, we're still very much confused but at a much higher level."

The speaker thanks everyone for attending.

Introduction and Q&A Session

The speaker concludes their presentation and opens the floor for questions from the audience. They remind attendees of the reception to follow and encourage participation in discussions over the next two days.

Questions are open for about 15 minutes.

Attendees who need to leave urgently should do so now to avoid disrupting the Q&A session.

A member of the audience asks a question about interpreting history through present-day frameworks.

There is a brief pause in conversation as music plays.

The speaker responds to the question, cautioning against reducing complexity by viewing history solely through present-day lenses.

Another member of the audience makes a comment about portraying information in spreadsheets.

The speaker responds, discussing how maps can be used effectively when they allow users to make choices.

They also mention that every representation has a purpose and different mapping exercises may be appropriate depending on that purpose.

The speaker acknowledges that they have done some work with integrated reporting but express concern that it is still too much driven by one point of view.

Overall, this section covers the end of a presentation and subsequent Q&A session where attendees ask questions related to interpreting history through present-day frameworks, portraying information in spreadsheets, and using maps effectively.

Safeguarding Diversity

In this section, the speaker discusses the importance of diversity and building on the margins rather than on the norm.

Building on Exceptions

The speaker emphasizes that it is important to not kill exceptions as they provide a way for margins to speak.

Rational choice people think like machines and do not have a lot of diversity. It is better to build on extremes, crises, and exceptions.

Building on exceptions opens up possibilities for knowing more.

Negative Approach

A negative approach is better than a positive approach because positively produces negatives.

Enlarging the real will not solve issues; it will multiply them.

Morality and Measurement

Double-entry works well if you follow the procedure, but it could be risky. You can use it to interrogate what you do not know or measure what you believe is right and moral.

The line between morality being a mystery or something that you want to measure is very thin.

Risk in Measuring Things

In this section, the speaker talks about how measuring things can make some other things invisible and highlights risks associated with expanding too much in this digital era.

Risks Associated with Measuring Things

When you measure things, some other things become invisible.

Expanding too much in this digital era can enlarge the real but will also multiply issues.

The Risky Business of Accounting

In this section, the speaker talks about the risks associated with accounting and how education can help mitigate these risks.

Risks in Accounting

Accounting is risky because it involves interrogating the mystery rather than representing the truth.

Giving an answer that does not align with what professors or accounting bodies believe can result in being kicked out of a room.

The institutions responsible for educating individuals on accounting may not be doing enough to prepare them for the risks involved.

Importance of Education

Education is key to mitigating the risks associated with accounting.

Building a Coalition of the Willing that values diversity and creativity can lead to a different kind of education that better prepares individuals for accounting.

Governance Mechanisms and Mediation in Accounting

In this section, the speaker discusses governance mechanisms and mediation in accounting.

Governance Mechanisms

The speaker gave a TED talk on governance mechanisms at Christchurch College, Oxford.

There are many keys around governing body but that body is not about representing around the table in order to...

Mediation in Accounting

Accounting has a huge history of mediation but now it's treated as just a technique.

Platforms are needed to curate agreements, and accounting can serve as a huge platform for mediation.