Month: September 2010

A Canadian Blogger Jailed in Iran


Even though the topic of this AOL News Article Iran's 'Blogfather' Sentenced to Long Prison Term is not related to the topics of CFOs and Controllers' frustrations, it is related to the freedom of expression issues that concern all of us. That is why it should have its place in the spotlight here.

I don't want to diminish the severity of the sentence and the horror of what Mr. Derakhshan is going through in Iran as the result of expressing his thoughts and opinions in cyberspace.  However, essentially everyone who publishes honest and edgy, or even boring and banal, material on internet are exposed to unpredictable consequences. 

In one article, or post, or conversation after another, we are warned that prospective and current employers are searching internet for possible controversial material on you.  So do the political opponents, educational institutions, investors, country clubs, religious congregations, etc, etc. Here is a typical example of such warning provided by the CEO of TheLadders.com Marc Cenedella in his new book "You're Better Than Your Job Search": In a Google World, Prepare to Be Investigated.   Jail sentences in foreign countries are extreme and rare incidents, but we do learn that people get fired, rejected and harassed because they express themselves.

That is the reason so many bloggers are writing under noms de plume.  That is the reason so many people who have something to say don't write at all.  That is the reason I guarantee 100% anonymity to anyone who shares their professional experiences with me. 

And it does not apply just to cyberspace.  One of my future planned posts will address my favorite topic – something I call the Bill of Rights in the Workplace.  There is a reason the new great American masterpiece from Jonathan Franzen is called "Freedom."  Obviously, it is a concern.

And of course, I disagree with Mr. Derakhshan's politics.  Moreover, I am a life-time student of World History and it seems inconceivable to me that any private citizen without diplomatic immunity would actually accept an invitation from any organization sponsored by an authoritarian government.  History is full of actual repatriation incidents that sound like horror stories: China, Russia, etc.

Nevertheless, my disagreement with his ideas, does not mean that I will not support this writer's freedom of expressing them with all my heart.  It's like what Voltaire said, "I may disagree with what you have to say, but I shall defend to the death your right to say it."    


The Importance of Prioritization for CFOs & Controllers


My very first post CFO's and Controllers' Many Hats  addressed (in two parts, as the matter of fact) the inescapable issue of overwhelming span of functional control tackled by all financial execs.  The issue has been described as a major source of both frustration and pride.

Well, whether you are proud or not of being a natural choice for a million of high-level responsibilities, keeping all balls in the air is a managerial skill mandatory not only for your professional success, but for taming the frustration as well. 

Both mathematical rules of optimization and circus performances teach us that there is a limit to the number of items you can juggle at the same time without dropping them.  This is why Prioritization and Delegation are two most important organizational tools for a Controller or CFO. 

Let me share with you my own Top Three Rules for each of these tools.

Prioritization:

Rule #1.  Assign priority scores to each task.  Let's say, 1 to 10 with one being the lowest.  The highest priority on your list should always be given to the task that in a long run will benefit the bottom line the most.  For example, writing an angry answer to your boss's email asking whether you are busy right now has lower priority (I would say, 2) than looking at your cash position and deciding whether you need to use your credit line or cash availability to finance today's operational expenses (definitely a 10).

Rule #2.  As much as you can, try to block certain time periods with periodic tasks of high priority in advance.  There are such things as SEC reports, monthly budgets, weekly cash flow projections, etc. etc. that occur periodically.  Prevent yourself from cramming at the last moment by assigning priority scores and scheduling these tasks ahead of time.

Rule #3.  If you work in a privately held business (and most small and mid-size companies are) and report directly to the Owner/President/CEO, be ready to push his/hers priority higher up on your list.  I know it sounds almost psychotic, but being flexible when it comes to your boss's requests sometimes can save you the boatload of frustration.  However,  it does not mean that you have to drop everything and attend to his needs.  Many people make that mistake.  Instead, you need to provide him with reasonable time frame and explain why the task at hand is more important for HIS BUSINESS.  I will get back to the issue of flexibility in scheduling discussion.

Delegation:

 Rule #1.  Don't be afraid to delegate important functions to capable subordinates because you are afraid that they will undercut you.  First of all, if you are a good match for your position and do your job to the best of your abilities,  you should be confident.  Secondly, by overwhelming yourself with extra tasks you diminish your own efficiency and undermine yourself.

Rule #2.  NEVER do your subordinate's job because you believe that you can do it faster and better.  This is a bad mistake many of us make.  When we do that, we damage ourselves in two ways: by wasting our own valuable time and by not letting our subordinates to improve and develop.

Rule #3.  Always make time for training and advancement of your subordinates.  By building strong and reliable accounting/finance staff you better your own chances for success .  

Honestly, it took me a while to develop and even longer to start implementing these rules, but I can vouch for their effectiveness. 




Further Scientific Evidence of the Entrepreneurial Bug


Over a month ago, in my post Your Boss: Value & Madness of an Entrepreneur I wrote about quirkiness and impatience of people who have brilliance to come up with original start-up ideas and guts to build a company from scratch – people who provide us, CFO's and Controllers, with new job opportunities beyond "Big Business." 

I also discussed how their peculiar and difficult qualities are the main source of our frustrations.  I called the sum of these character traits the Entrepreneurial Bug.

As if to support my point of view, September 18th issue of New York Times featured this article in their Business Day section – Just Manic Enough: Seeking Perfect Entrepreneurs by David Segal.  I highly recommend that everyone interested in the subject of entrepreneurship, start-ups and venture capital investment should read it. 

Of course, my own primary interest was the excursion into psychology of the indicators so characteristic of our bosses difficult behavior.  Needless to say, the article confirms that not every subject is afflicted with the entire spectrum of symptoms and displays them with the same intensity.  Nevertheless, the author clearly states that only "a thin line separates" an entrepreneur from a psychiatric candidate with a hypomanic syndrome.

One of the article's subjects, Seth Priebatsch, echoes my post from 08/19/2010, when he "describes anything that distracts him… even for minutes, as 'evil.'"  No surprise here – I've heard this before many-many times from various CEO's.  The difficulties of working with people like that on daily basis, especially for CFO's and Controllers, whose job is to keep businesses in order and under control, is basically one of the main themes of this blog.

Mr. Segal goes out of his way explaining that the degree of craziness is what matters: some Venture Capital firms give personality tests to their prospects in order to determine if they are not completely bonkers.  But I couldn't help myself thinking that these tests may be also designed to weed out people who are not crazy enough to be satisfactory material for future transition from idea generators into screw tighteners.

Strangely enough, the New York Times' confirmation that my extrapolation of personal experience dealing with business owners to the rest of the entrepreneurial world is completely justified, did not bring any intellectual satisfaction.  It's kind of discouraging that if you choose to build your career in dynamic growing businesses, you will always have to deal with bosses who cannot help themselves not to be assholes.  

Business Owners’ Favorite Style of Management


Some people are born with incredible natural aptitude for managing people.  Many years ago I observed a girl on a playground.  She was about 5 years old playing with a group of children the same age.  At one point some play rules, or another important issue, needed to be established, and I was amazed not only by the assertion of authority, but also by the uncanny logic exhibited by this extraordinary little person.  She started with a commanding, "Children, listen to me!" and continued laying out a proposal that nobody has any inclination to dispute.  I remember thinking to myself, "That's a naturally born leader!"

Unfortunately, people like that constitute a small percentage of general population and, strangely enough, they are even rarer among business owners.  Just because someone had a great idea and entrepreneurial drive to establish their own business doesn't mean that they also have sufficient managerial aptitude.  Only few of them had formal business management education and most of them never worked for anybody else long enough to gain on-the-job expertise.  

This pretty much leaves their leadership skills at intuitive level at best.  And if the sixth sense fails them… well, all kind of sad things occur: they cannot see the difference between a pompous phony with an impressive voice spewing well formulated lies and genuinely knowledgeable, but quiet workaholic; they have very little or no understanding of delegation of duties; frequently they cannot even figure out their own roles in the company.  

The most common executive management conundrum such Presidents/CEO's (especially first generation of business ownership) encounter after the enterprise reaches the "established" stage of development can be described as follows.  Their entrepreneurial talents draw their minds to further commercial improvements, to generation of new ideas that will help to expand and strengthen the business.  At the same time, the wonderful feeling of accomplishment plays dirty tricks on them: subconsciously they want to rest on their laurels – they feel that they deserve to work less, to take summers off, etc. etc.  Moreover, since the business is their child that they have born and reared applying their own talents and titanic efforts, they have incredible aversion to the idea of letting other people to completely take over vital tasks of the company's ongoing functionality and maintenance.   

(Side note: I am really tempted to state here that the majority of them are control freaks.  However, I don't have scientific evidence for that, just my own and my colleagues experience. More importantly, it does not make a difference, both obsessive and perfectly balanced CEO's display the same symptoms.) 

You have to agree that this position is absolutely psychotic.  What do they do?  They resort to their favorite style of management – what I personally coined several years ago as "Hands-Off Micromanagement."  

Let me show with this example how this control style may manifest itself. On one hand, the CEO can completely forget that you are working on establishing a $10 million credit line with a new bank, or that you have just upgraded your accounting system to a new version that basically made the entire budgeting function automatic.  But on the other hand, he keeps asking without a fail every month why the Federal Express bill is $2,000 – when he was starting the business it was never more than $100.

I am sure a lot of my fellow CFO's and Controllers have recognized the disease as they have to deal with it and the frustration it causes on daily basis.