Countless companies regularly ignore profitable business opportunities because they look like money losers. "American business leaders have a distorted view of how they make money. They pass up billions of dollars in lost profits each year by trusting flawed measurement tools based on the standard-cost accounting system" says M.L. Srikanth, Ph.D., co-author of the new book; Measurements for Effective Decision Making (M.L. Srikanth & S.A. Robertson, Spectrum Publishing Co., 175 pages, $24.95) "Standard-cost accounting facilitates bad decisions. Using it to guide decision making is about as sensible as trying to control the flow of a waterfall from the bottom," says Robert Miller, assistant controller of Seattle-based Boeing Commercial Airplane Group. Quoted in Fortune, Robert S. Kaplan, Professor of Accounting at Harvard Business School and one of the most vocal critics of the standard-cost accounting system, goes even further, saying: "It's better to have no cost system than a standard-cost system because it is so inaccurate." "Standard-cost accounting distorts what it costs to make things, what prices a company should charge, and how profitable new work is." says Srikanth. His Co-author, Scott Robertson, says the above distortions are "just the tip of the iceberg. The deeper you go, the worse it gets." Without exception, Robertson says, managers who make decisions using standard-cost accounting measurement systems have higher costs, lower profits, more quality problems, longer lead times and slower, less reliable delivery than competitors who have abandoned these out-dated decision making tools. "You could fill a mainframe with the names of companies that tried to adopt new thinking but failed. Ever wonder why? It's because, like a black hole, standard-cost thinking lurks in the background, swallowing up new ideas. After reviewing scores of improvement efforts, there is no doubt in my mind that the primary problem behind those that failed was management's inability to separate standard-cost thinking from day-to- day operational decision making. Trying to graft new competitive practices onto the old standard-cost roots only results in stunted performance improvement initiatives. Change your measurement systems as well and you will see your efforts blossom." This new book and the ideas it presents have received wide acclaim. Srikanth and Robertson, principals of The Spectrum Management Group, a consulting firm that has helped hundreds of manufacturing organizations improve operational performance, recommend management separate standard-cost thinking from their day-to-day operational decision making. Clients say the advice works. CFO Ron Wood, of CT-based Howmet Corporation, an aerospace manufacturer with $900 million in annual sales, says, "The concepts in Measurements for Effective Decision Making helped Howmet eliminate wasteful practices and cut manufacturing cycle times 85 percent in the first plant we tested the new measurements." "Measurements for Effective Decision Making introduces ideas that helped us become a successful agile manufacturer." says, Jim Hasart, plant manager for Horton Industries' Vehicle Components Division, headquartered in Minneapolis, MN. "Between 1990-95, we used this alternative to standard-cost based performance measures to double sales, cut lead times 49 percent, inventory 73 percent and waste 57 percent- four of our key measurements of world-class performance." Michael E. Naylor, senior vice president of operations at Wooster, OH-based Rubbermaid, Inc., says, "Measurements for Effective Decision Making provides, in simple, straightforward language, a new perspective on the importance of performance measurements, a fresh look at how to drive financial performance, and some effective tools to guide decision making. It should be required reading for manufacturing and finance managers in all industries." Alfred M. King, CMA and former managing director of professional services for the Institute of Management Accountants, concurs. Writing in a book review scheduled for an upcoming issue of the Institute's monthly magazine; Management Accounting, he notes that, "This small volume is literally going to be worth its weight in gold."