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 