Based on an actual conversation.
New CFO: "Half of your in-transit inventory is not recorded on the books, because you have not followed the cost-recognition rules since you started this company six years ago."
CEO: "The books? Which books? Do you mean the Excel spreadsheet we call Order Book?"
New CFO (doesn't know whether to cry or to laugh): "Your books – your financial records! They are not in accordance with GAAP."
CEO: "GAP? What that cheap store has to do with our inventory?"
"Political history is far too criminal a subject to be a fit thing to teach children."
W. H. Auden
People write about insecure bosses all the time. There are blog posts, articles, book chapters, cartoons, movies, and TV shows devoted to the subject of dealing with a superior who feels threatened by his subordinates. Hey, bosses are people and a vast majority of humanity is plagued by insecurities of various forms and degrees. The authors usually predict two possible outcomes of having such a boss: you will either find a way to overcome the problem and turn this person into your ally, or you get fired. Curiously, in these writings "the boss" in question is usually another hired employee perched on a higher step of the hierarchy ladder. (It has always surprised me, why these advisers never consider a possibility of you finding the way of getting the insecure boss fired.)
However, when your insecure boss owns the company that employs you, it's a completely different situation altogether. Here he (or she, or they) was, the big boss with a business that he's built, thinking that he is the shit, the sharpest tool not just in some lousy shed, but in a suburban Home Depot… Until you came along, with your diverse expertise, broad fundamental knowledge, etc.
Now, you start discovering all kind of stupid stuff. If you are indeed an experienced person, you are not running around like an idiotic show-off screaming that everything is wrong. No, you tread lightly. At the same time you must do your job and, therefore, correct the stupid stuff. So, you say careful things like, "Excuse me, I mean no disrespect, but this and that is not done properly and will result in long-term losses; and, by the way, your accounting doesn't comply with prescribed rules." You have no choice but to reveal painful observations such as, "You know, that operating system you bought just before your hired me (couldn't you wait?) on recommendation of someone you know, sucks! You were misled – it's not an ERP, it's a retarded cousin of a real ERP twice removed."
Moreover, from time to time, things come out of your boss's mouth that are not just silly, they are embarrassingly incorrect. Of course, you can ignore it, and yet you cannot, because if you don't clarify his confusions and educate him, he may say something stupid in front of your bankers, or investors, or auditors. So, you have no choice but to find an appropriate way to straighten him out, raise his sophistication.
And even though you openly express due respect for his entrepreneurial abilities and acute commercial intuition, he cannot avoid feeling inadequate, insecure. It's unpleasant and he doesn't like it at all. Yet, unless you become rude and inappropriate, your job is secure. The idea of firing you wouldn't even come to his logical conscious mind. First of all, he knows that the company (i.e. his wallet) needs you and your improvements. Secondly, you took over quite few tasks, freeing him for business development. Finally, he doesn't have time or desire to go through the search process again.
Still, from time to time the subconsciousness feels pangs of wounded ego. When that happens, he'll do anything to make himself feel better. He will find one or another way to get back at you. If you have an accent (Irish, Italian, Slavic, French), he will interrupt you in the middle of a meeting and ask the outsiders if they understand at least 30% of what you were saying, even though your English is fluent. Your writing skills are likely to be far more superior than his, but he will make you run drafts of emails to important people by him, claiming their "political importance." He may get into habit of reminding you that, considering your compensation, he expects a lot from you, even though you have exceeded all his expectations already. And so on, and so forth…
This behavior is childish. The mere knowledge that it's rooted in his insecurity should help you to brush it off. Don't let yourself to be hurt by it. Don't think, "This is not fair, I am helping his business." Don't take it as an insult. Accept it as a testimony to your superiority.
"When ideas fail, words come in very handy."
Goethe
It has always been my firm opinion that the quality of education depends on a person not the school he or she attended. I even mentioned it in a hiring-advice chapter of my book, "CFO Techniques". And I am always very objective about this issue, giving everyone the same treatment regardless of their educational background.
That said, I am absolutely convinced that one thing the Ivy-League alumni with business degrees do not receive for the price of $220,000 undergrad, plus $130,000 graduate tuition, is an ability to express their thoughts in writing. Maybe it's because the curriculum is so concentrated on molding the future captains of industry, or maybe it's assumed that with their connections and parental support they don't need to be very eloquent… Who knows? But I am telling you, they cannot write to save their lives.
I must admit, though, that this conclusion is purely empirical, based on my personal experience of written communications with business owners, corporate executives, bank officers, hedge-fund bigwigs, private-equity investors and such. Ever since emailing became the predominant method of business interactions, the volume of the evidentiary material that supports my theory increases daily.
And I am not even talking about Columbia MBA's who cannot spell or construct a proper sentence. Those are extreme cases and I entertain people at parties quoting their pearls. No, I mean an average, fairly literate Ivy-Leaguer who cannot make himself clear or understand what others write to him. You know what? Let me just provide you with a couple of examples.
I explained to my client (Brown + Harvard) that it is not recommended to keep excessive credit-risk coverages for inactive customers because the overall creditability of a particular customer is a finite amount and premiums are affected by your share in the overall limit. For example, if underwriters established an overall credit power of a customer at $2 million and you keep a $1 million of that, your share is 50%. Simple, right? This is what he wrote to his credit clerks to explain the issue.
"We need to review our coverage of each account to make sure they are all appropriate; neither too little nor too much credit. We all understand the former need, as we want to be fully protected while maximizing our sales to each customer. However, the latter is important too, as the insurance company will charge us for asking for lots of insurance for a company and then not selling them anywhere close to that amount. The reason is that we are not the only client insuring our customers and the insurance company have a specific credit limit for each company. This reduces their revenue from their other relevant custs who are restricted in their sales to that company."
Sounds like he was trying to digest the information and make sure that he got it right himself rather than give instructions to employees: what to do and (MOST IMPORTANTLY!!!) how to go about it – which criteria to choose in reviewing the coverages, etc. And why all these convoluted details?
Sometimes, they don't understand what they read either. I represented this client (Dartmouth + Yale) in a bank's due diligence audit. During the process the auditor wrote to him (with a copy to me) the following email:
" G&A was listed separately since we expect to include a detail supplementary schedule of G&A with our conclusions, but we normally do not opine on the supplementary schedules." [underline is by the Frustrated CFO]
This was the CEO's reply (I was copied again):
"…if what you are saying is that you will provide an analysis on the G&A, Marina will certainly be happy."
Well, I am certainly not happy, because that it not what the auditor said at all! As I frequently say, it would be funny, if it wasn't so sad.
The Frustrated CFO 