You have two weeks until the end of the quarter – which, for many companies, is also the end of the financial year. Instead of developing strategy, or working on long-term plans – let alone buying gifts or dressing the Christmas tree – you’re locked in a windowless office. Your sole objective: to hit your targets for 2012.
Under the circumstances, you may agree with this industrialist: “We’ve chosen some new high priests and called them accountants. They too have a holy day – the 31st of December – on which we’re supposed to confess . . . But if you’re really working on great ideas, you can’t supply these on schedule and expose yourself to view. The December ceremony isn’t really a law of the gods, it’s just something we’ve invented. All right, let’s conform, but don’t let’s do it in a way that will spoil our plans. And some day people will realise that every balance sheet is wrong because it doesn’t contain anything but figures. The real strengths and weaknesses of an enterprise lie in the plans.”
The repercussions of the tyranny of the quarter-end are well known, from irritating but innocuous travel bans and spending freezes to earnings manipulation and management myopia. The colourful array of year-end tricks – window-dressing, book-squaring, channel-stuffing, trade-loading and the alluring concept of “smoothing” – can have real consequences. Surges of orders booked prematurely cause whiplash along the supply chain, turning what should be a business process, with seasonal variations, into a volatile stop-start journey.