Month: November 2011

Am I Cursed?


Well, it's definitely feels like I am. Throughout my entire career, every time I start a new job or a long-term consulting project, no matter how exciting and successful the business seems, it takes me under 4 weeks (sometimes less than 2) to uncover hidden losses, cash flow deficiencies, operational problems, strategic mistakes, distortion of accounting principles and policy violations. There has not been a single exception to this rule.

Of course, I devoted my career to dealing with privately-held small and mid-size companies. Frequently their CEOs are entrepreneurs with limited understanding of corporate governance, let alone the makeups of quality accounting and finance functions. These companies develop in a haphazard manner and the staff is usually composed of people who are eager and hardworking, but not necessarily highly qualified. The conceptual thinking, I am always so keen on finding, is rarely present.

I've been studying my current client for exactly three weeks now. Oh boy! The company is a wholesaler, but the operating software they bought for a lot of money was created for manufacturers, and it's so rigid, it will require major re-programming to adapt it to their needs. The principle feature of this type of businesses – the lot-driven operations that require lot-specific data tracking and analysis, cannot be accommodated by the software and, therefore, needs to be performed at a great time-cost in Excel. The chart of accounts is completely screwed up and there is no hope to adjust it properly since they already started making entries. There is an endless duplication (and triplication, and quadruplication) of data in different files kept on their local drives by individual employees… And so on and so forth. They don't even have a backup system in place, let alone business intelligence.

But most remarkably, NOBODY (not the co-owners who buy and sell the product internationally for years now, not the logistics managers, not the internal accountants, nor independent auditors) understands the principles of Incoterms. As the result, the revenue, costs, and inventory recognition is royally fucked up. I restated their 9-months 2011 results to proper values and found… you got it – losses!

Sometimes, it makes me wonder, what would happen if I got a chance to dissect a huge belly of some public mammoth. Would the same rotten bullshit pour out of them? The fact that big-time public companies constantly underperform and require bailouts makes me kind of suspicious.

The truth is I don't believe that I am cursed. I think that the majority of companies manage for some time to ride on the wave of a particular product/service demand, or some market twist, or accidental economic development, or novel idea. Yet, they are drowning in small and large errors affecting every facet of their existence. And when the shit hits the fan in the form of financial or operational problems, their chances for survival are minimal because there is no quality back-office structure to sustain them. Moreover, frequently they don't even see it coming, because they operate blindly in the absence of informational support.

The problems may come to light before the downfall if a perfectionist like me appears on the horizon. Such a person may be either hired as a permanent employee, or come along as a part of a consulting team (an option frequently unaffordable for small and midsize companies). So, this client of mine got lucky – one way or another I will correct all their problems. Others out there… it's scary to think about them. Is it surprising that with this poor quality of back office, lack of informational reporting, and all the errors they commit along the way, the companies are going out of business left and right, and the economy has gone to shitters?

I do have a solution that can help many of the companies precariously hanging on the verge of extinction due to the deficiencies in their policies, procedures, controls, and reporting functions – an affordable and easily accessible electronic consulting solution that covers all these areas of expertise and puts a multitude of tools at the fingertips of executives and financial professionals. Let's hope that I will be able to attract investors to back my ideas and bring this revolutionary development to the millions of small and mid-size companies.

Back-to-Work Jitters


No matter how eager unemployed people are to find a job and get back into wage-earning trenches, when the fortune smiles at them and after months (sometimes years) of looking they finally secure a position, they cannot avoid feeling nervous, anxious, and frequently depressed. The same unpleasantly uneasy state of mind comes over people who return to the full-time employment or undertake a long-term engagement after the semi-freedom of short-project consulting. Even if you went on hiatus to write a book and put your entire life on hold to do so, now that it's over, you fear of returning to the regular job.

Moreover, much smaller gaps in working schedule have exactly the same effect on us. It's difficult to come back from vacations and even weekends. It is an established fact that the number of heart attacks peaks on Mondays in comparison to other days of the week. And it has nothing to do with Monday per se – if we moved the beginning of the week to Wednesday, the statistic would shift as well.

This is true not only for the hired schmucks like us, subordinate to their bosses' rule. One of my former multi-millionaire owners/CEOs confessed to me that he passionately hated Sunday nights (me too!), because Monday mornings loom over them. There was nobody over him. He had an attitude of a royalty, did what he wanted, and his scope of responsibilities was considerably smaller than mine. Who would've thought that he felt about the end of the weekend exactly the way I did. I am sure all my readers who worked in private companies have owners who take long weekends and hide in their vacation houses for the entire summers. Why do they avoid being in the office?

What does it say about our relationship with the activity that we let to occupy the largest chunk of our lives? Do we experience these sensations because we resent our jobs and are unhappy with our existence? Does it happen only with those who made sensible choices in their lives in order to support themselves and their families? I know it's not possible for the majority of people, but would we be more relaxed if we pursued our dreams?

Apparently not. All real writers are terrified of the empty page. Stanley Kubrick, of course, pushed the issue to its scariest interpretation by showing in "The Shining" how the fear of the typewriter with a clean sheet of paper in it can turn a writer into a psychopath. Famous movie directors, including Ingmar Bergman, Michelangelo Antonioni, Woody Allen, and Martin Scorcese, consider being on the set a pure torture. Pro-athletes are ridden with OCDs (endlessly bouncing the tennis balls, or tagging their jerseys in a particular way, or counting the number of times they knock on their locker) and many of them puke their guts out before every game or match. Speaking of puking, after 48 years on stage and screen, Cher still vomits before every performance.

The list of examples is endless. I believe, it's not about the work itself or the workplace. I think our psyche, taught by the previous experiences, tries to protects itself from frustrations and stresses associated with every job. The anxiety and the nervousness are manifestations of the defensive instinct: "Don't go. There will be pain again. You will be judged unfairly. You will care too much for your own good."

I honestly think that the workaholics among us work through their weekends and vacations out of self-preservation. They know that if you slip up, stop for a second and relax, it becomes incredibly difficult to go back. The human beings are addicted to doing-nothing and avoiding pain, but resolve to stay on the occupational wagon in order to provide for themselves, realize their self-worth, or satisfy their urge for creative expression.

Job Search: The Reality and Heartaches of Downshifting


Stock_overqualified158x188 Here is the testimony to the current job market condition: the necessity-driven "downshifting" (taking a position below your lever of qualifications) has become so prevalent that HR consultants start addressing the issue as a separate subject with specific advices on how to do it successfully.  There used to be times when some over-50 empty-nesters wanted to lighten their workload and spend more time at leisure, so CFO's switched to consulting, and stuff like that.  Now, we are talking about highly-experienced middle-aged financial executives unsuccessfully trying to get whatever jobs they can in order to put food on the table and continue to support their post-college children, who have no chance of getting a good job either.  It's heartbreaking!!!

I always had a problem with the concept of "overqualified" candidates.  It goes against all commercial, practical, and common sense – why would anybody say "No" to buying a diamond ring for a price of a cubic zirconia?  Why wouldn't employers want to benefit from high-level expert if he is willing (moreoever, eager) to take a much lower position and pay than the ones he used to have?

The official explanation (especially, if you talk to recruiters at Robert Half, or ExecuSearch, etc.) is always (it's like everything changes around us except for the stupid banalities) that employers don't want to take the risk of hiring someone, who will be immediately looking to leave for a better opportunity.  This outdated explanation begs three responses. 

First of all, nowadays the process of looking for a job is unbearably excruciating.  Anyone who finally finds one is so relieved and enthused, he wouldn't want to continue that struggle for sometime (especially, if his attempts may leak through the Internet and jeopardize the position he already got). 

Secondly,  where are those better opportunities? The whole point is that there are no opportunities.  I remember after the Internet bubble burst, let's say 2001-2002, an opening for a controller position could generate 300-350 good (not garbage) responses.  It was terrifying.  Today, there is a thousand of unemployed financial pros for every CFO, controller, director or VP ad. 

Finally (and most importantly), even if the person leaves soon, what about the cost/benefit analysis of the time he does spend in the company?  Why wouldn't an employer want to sponge a superior knowledge off of him at a lower price?  Is it because the company still uses the outrageously expensive recruiting services?  Well, then the agreement should be negotiated in such a way that no fees are paid until the break-even grace period passes.  And anyway, people should stop wasting their money on recruiters altogether.

But we know that this explanation is bullshit.  In reality, no matter how beneficial it is for the company, CEOs and existing CFO don't really want the brightest and the most knowledgeable person in the position.  They want the non-threatening and obedient, know-your-place employee.  Especially the CFO – what if the newcomer turns out to be better than the present loser (only losers feel threatened by someone strong; winners have nothing to fear).

Anyway, this issue is so prominent that on August 26 Finance Ladder published not one, but two career advice articles on the subject: Getting the Job When You're Overqualified and Packaging Yourself for a Smaller Role, both by Sean Gallagher.  Here is the best quote:

"…Finding a job – even one that pays significantly less, with less responsibility — is still a challenge."

There are some interesting observations and advices as well.  Nothing groundbreaking – most of it you can figure out yourself, but still it may be a useful reading not only for those who are looking now.  Because it is not going to get any better.  If you are employed now, it does not mean you will have a job tomorrow.