FASB Wish List In-Depth Part 3

Toward the end of 2020, we published a Lease Accounting Holiday Wish List for organizations that still need to adopt ASC 842, IFRS 16, and GASB 87. This is the third in a series of articles to provide detail for each of those wish list items.

3: Dedicated Decision Maker(s)

After helping a number of clients get across the so-called transition finish line, we have seen on a number of occasions, the impact a Decision Maker can have on the project.  The best Decision Makers have 3 very critical similarities:

Ability to quickly and soundly say “Yes” or “No”:

What might seem like an obvious trait one must have to make a decision, the inability to say “Yes” or “No” quickly and soundly can cause lasting effects.  These projects can be very linear, where one thing must be completed before the next can start.  If your team is unable to make a thought-out, definitive decision to keep the project progressing, this directly impacts project timing and project budget.

Being the Decision Maker automatically makes you a leader on the Project.  Showing confidence in your decision, whether it’s “Yes” or “No”, requires you to fully understand the details of this decision and truly feel confident.  This confidence is felt throughout the rest of the Project Team and this has a very positive impact on the key team players.

Understanding and Feeling Supported in Wrong Decisions:

Decision Makers cannot be afraid to make the wrong decision.  Support from Management can help the identified Decision Maker feel like the world is not sitting on their shoulders.  Many times, the decision maker will not see direct satisfaction or dissatisfaction with such decision for days, weeks, months, or maybe even years to come.  As you can imagine, not knowing if you made the wrong decision and simply waiting to find out can be daunting and unfamiliar.

If you have the understanding and support from upper management that you are at least making well-informed, thought-out decisions, it can help ease these feelings.  Weighing time and budget can be just as critical as being right or wrong.  Recognizing when being on time is more critical than being right or wrong makes for the best Decision Makers.

Cross-Functional Understanding of Day 1 and Day 2:

In many instances, we have seen our clients appoint one Decision Maker for the project who sits within only one functional group within the company.  Whether that functional group is Accounting, Finance, Real Estate, Legal, or Technology, it is critical this person can do two very important things:

  1. Understand what it takes to get to the Lease Accounting Transition Finish Line
  2. Recognize the Lease Accounting Transition Finish Line is actually the Starting Line for all functions within the company.

Cross-Functional Teams will very quickly become key stakeholders in the data that sits within the client’s portfolio management software.  Setting Accounting up for ongoing compliance while also teeing up the other functional groups to leverage and use the data and system is key for user adoptability.

For right or for wrong, find your team a Dedicated Decision Maker who has the support of management!