Funny Thing Happened On the Way to Ohio, or That Picture of Your Boss You Posted on facebook


UntitledI've said it before and I'll say it again: all entrepreneurial bosses are the same.  Of course, I don't mean it literally – they are not stamped figurines.  Yes, they are the same in their principal qualities (aggressiveness, single-mindedness, drive, vision, impatience, arrogance, callousness, etc.), but they are also different people with their own psychological makeups,  individual quirks, and human peculiarities.  Some can be informal and approachable, others are aloof and snobbish.  Some can be intellectuals, while others are simple and limited.  Some of them are religious conservatives, others are broad-minded libertarians.  Some are healthy and others suffer from an array of ailments.  Some like spicy food and others cannot stand a hint of curry or garlic in the air.

There is one universally common denominator that definitely unites all business owners, though - they are employers.  And as I wrote in CFO Techniques, one should never cross the line with one's employer, if for no other reason than in appreciation for creating one's job.

So, here is a little anecdote that involves a sociable female business owner, her all-male sales staff, and some spicy food. 

First, let me clarify one thing.  This woman, tough as nails and brutal in her nature, nevertheless strives to present a friendly and cheerful demeanor to the outside world.  Experienced people can see through that veneer and know to watch their steps around her.  However, when you get together eight men, even though subordinate, and one woman, even though a boss, the dynamic gets a little muddled.  I mean, when they are in a gaggle, it's especially difficult for men to suppress the testosterone.  It clouds their judgement and they forget for a hot second what's behind that charming smile. 

Oh, yes, and about the food: she really does like it hot.  You'd be in a restaurant with her, she orders a dish and then asks the waiter, "Is it spicy?"  The waiter smirks, probably thinking, "That skinny bitch will be asking now to make it mild," and answers, "Yes, ma'am, it's very spicy."  And she goes, "Could you, please, ask the chef to make it spicier." (Sometimes I actually consider of giving her a present of Pure Capsaicin Crystals, but I know she's going to try them and I don't want to be responsible for the consequences.)

Back in December, she held a three-day sales summit in the company's NYC headquarters – all salesmen came over from their different locations.  This usually means breakfasts, lunches, and dinners together.  Thankfully, in NYC that's not a problem.  The team enjoyed French-Asian fusion, classic American steakhouse, Korean…  An Italian restaurant is always a must, since the sales person with the most seniority comes from a Bolognese family. 

Unfortunately for the boss-lady, Italian food doesn't offer too many possibilities for extra-spicy.  She orders Shrimp Fra Diavolo over linguine, but it's not doing the job.  Red pepper flakes are asked for and happily received.  She starts shaking the plastic thing over her plate and orangy-red bits sparingly drip out (there is a reason the container is designed this way – one must use the hot stuff with a caution).  That's not enough for her – she starts shaking harder and harder…  until the top flies off and most of the pepper from the bottle ends up in the sauce.  All the men at the table are laughing their heads off – the boss slipped up!  Maitre d' sees it (how can you not, with all that violent shaking?) and immediately runs over, offering to replace the dish.  The lady refuses and laughs lightheartedly with her "boys" about her clumsiness.  She removes some of the pepper excess onto her bread plate and proceeds to eat what, I imagine, is an unbelievably spicy pasta without breaking a sweat.

Six weeks later, the same group of people is on the road visiting their Rust Belt customers.  They started in Pennsylvania and are now on their way to Ohio.  I'm sure my readers understand that the food scene in the industrial towns of Western PA is not quite the same as it is in NYC.  Here you go for Italian because it's probably your best choice.  So, there they are again with dishes that vaguely correspond to the Italian names on the menu.  This time around the owner's sauce is not spicy at all, but the generic plastic bottle with red pepper flakes is already on the table.  She reaches for it and the shaking ensues.  The memory of the NYC debacle is too fresh for the boys not to bring it up: "Be careful, don't shake the top off," a few of them warn.

Let me step aside for a second: Just as the bosses' human qualities differ, so are the ones of the subordinates.  A couple of them are of the self-conscious type – they simply don't want to be inside a public spectacle again.  Others are genuinely concerned about her not spoiling her food.  Yet, there are always those resentful, passive-aggressive employees, who secretly cherish the idea of a boss making a fool of him/herself.  One of those had his iPhone at the ready.

Well, as you probably guessed, the container's top comes flying again and a half of the red pepper flakes ends up on the pasta.  Oh, the childish hilarity!  Everybody laughs – some wholeheartedly, some to cover up the awkwardness.  The prepared dude snaps the picture and immediately posts it on facebook.

A young salesman who told me about the repeat performance of the pepper flakes show was visibly hesitant and uncomfortable with the whole facebook posting part.  I was simply appalled at the disrespect.  And what about the owner/CEO herself?  Did she fire that rude fucker?  Of course not.  The emotions should not interfere with business - it's impossible to replace a high-caliber sales exec overnight.  But I know this woman very well.  She's never going to let it go.  You can see it in her unsmiling eyes when she laughs about the whole thing.  She is on the lookout: as soon as she finds someone else, the insolent fool will be gone.  She will not even flinch; just like she doesn't flinch from the spiciness of her food.

Social Media Bewilderment


Social Media Buttons by Cindy KingForgive me for being inattentive to such extra-accommodating bells and whistles, but I only noticed it yesterday night: after you finish watching a TV show's episode or a movie on Hulu Plus, a little window with both facebook and Twitter logos/links appears in the middle of your screen.  I take it that this is Hulu's offer to its subscribers to share the news of just procured entertainment experience with their personal social network.

My God!  Do people actually do that?  Like in self-admiring way, or something?  I just watched an episode of "Brooklyn 99" on Hulu Plus.  So fucking cool!  Or: "Persona" on Hulu Plus, just now.  Fucking rad! Attention seeking much?  How boring are these people's lives? How heartbreakingly pathetic!     

Social Networking May Still Redeem Itself as an Instrument of Commercial Quality Control


 YelpToday, our minds automatically go to facebook, Twitter, Instagram, etc. when someone uses the words "social network." The Rudin/Sorkin/Fincher team made a movie about Mark "I-violate-your-constitutional-rights"  Zuckerberg and used those words as a title!  

And it's absolutely ridiculous, because establishing and maintaining connections with friends and "the right people" have been vital for the human species since, like, forever.  Folks have always built their settlements, villages, towns, and cities with designated places for meetings.  Back in the day (and I don't mean the 1980s), households accepted visitors on certain days of the week; and even on a random day one could come by and leave a calling card with the family's help.  And who can deny that, ever since the first Industrial Revolution, the patterns of commercial and financial developments were determined by the who-knows-who principle.  It's just that the outreach was far more limited.   

Of course, the magnitude of Internet networking is breathtaking.  In the early 1990s, when the Internet has connected all seven continents, the miracle of instant world-wide access to knowledge, culture, entertainment, or people was the most important and alluring aspect of this new technology for me.  I still experience a thrill every time I look at this blog's dashboard and see that during the last 24 hours my posts have been read not just at home, but also in Denmark, Canada, Germany, South Africa, UK, Vietnam, Australia, Portugal, Spain, India, France, and Taiwan.  I love it.

Yet, I hate facebook and Twitter.  Okay, push your eyebrows back down and let me explain. I don't hate social networking per se: It's convenient to receive updates on your favorite artists and it's important for business: I've been on LinkedIn since the times it operated exclusively on the basis of professional invitations.  But I abhor the contemporary "social network" phenomenon and what it represents: the unrestrained hunger for attention, the vile combination of pathological exhibitionism and a sickly kind of voyeurism; the violation of privacy and the desire to be violated.  I cannot stand the stalking by exes, the spying by employers, the snooping by the government agencies – all that shit.

That said, there are some companies with one or another form of social networking at their cores, which I consider not only healthy, but also greatly important due to their positive impact on the commercial environment, especially the consumer sector.  I'm not naive and I don't think that any of the entrepreneurs behind these businesses consciously elected to influence the quality of goods and services.  Most likely they simply shaped their business models utilizing the exploding patterns of collective participation in the Internet experience, but in the process they unwittingly created an influential force that has a power of strengthening and weakening businesses.       

In 1979, Tim and Nina Zagat started imploring their friends into scoring restaurants they visited, eventually turning their social pastime into a ranking business, which was bought by Google in 2011 for a reported $151 million.  Being an old-fashioned medium from the start, however, it remained the same under the new high-tech ownership: It's still unclear how the rankings are formulated.

It was Pierre Omidyar's hobby-project turned international conglomerate with an annual revenue of $14 billion, aka eBay that pioneered the concept of building market-place reputations based on the fully-disclosed opinions of the "community members," i.e. users of the eBay services.  While everyone was screaming (understandably so) that people will cheat, lie and steal, eBay founders stuck to the most fundamental of the commercial principles: in order to succeed you need to keep your ratings high, because one unresolved accusation of unsavory practices may kill your future transactions for good.  It's like what G.W. Bush said, "Fool me once, shame on you.  Fool me – you can't get fooled again."

Today, thanks to rating algorithms utilized by various online businesses, we came to rely on communal ratings and individual opinions whenever we buy electronics, computers, household appliances, books, or select entertainment on Netflix, or order food delivery on Seamless, or pick a hotel on TripAdvisor, or make decisions about telecommunications providers.  Many of us not only peruse the viewpoints of others, but also actively participate in the polling process by sharing our own thoughts about this or that product, service, establishment, thus affecting a new system of commercial quality control.     

It is safe to say, in my opinion, that Yelp has become a flagship of the communal marketing model.  Again, not because the ideas of commercial quality control and merit-based rewards are so important to them, but for the sake of the advertising income ($138 million in 2012).  Nevertheless, assessing performance and assigning rewards (aka ratings) is exactly what "yelpers" (members expressing their opinions) do.  

A few unique traits place Yelp, Inc. in the avant-garde of this movement.  They encompass a wide spectrum of consumer services.  Right now you can find referrals on businesses in 20 main categories – from restaurants to religious organizations, further subdivided into specialties.  In less than 10 years they have achieved an international magnitude.  The listings are essentially combined efforts: detailed information about the business is provided by the commercial participants themselves (for a fee) and consumers supply their reviews, photos, and ratings.  The search engine is geographically oriented allowing users to find what's around them on the map. 

Also, Yelp, Inc. claims that they use an "aggressive" reviews filter, which rejects posts that are suspected to be biased or false.  As a result, according to their public releases, about 25% of entries are being dismissed.  And I can appreciate that. Like I said, rendering communal judgments on commercial establishments is a serious matter: ultimately it has a power of affecting the livelihood of individual businessmen.  So, the filtering is great as long as Yelp conducts their selections, rejections, and other manipulations fairly and without prejudice. 

Unfortunately, as with everything touched by greed, the communal quality control as executed by Yelp, Inc. may be seriously misused.  While I was writing this piece, TypePad's "related-posts" function has presented me with a few reports (including the one attached below) accusing Yelp of manipulating reviews in exchange for business clients' participation in the site's advertising programs (you can also read about it on Wikipedia).  And that's criminal.  Not only because it's nothing short of blackmail, but also because, by using individual consumers' personal and freely expressed opinions in this unsavory process, Yelp corrupts the participants' intellectual property and constitutional rights.  I sure as hell hope that these accusations are not true.  If they are, yelpers should file a class-action suit to bar Yelp, Inc. from using their reviews as the means of racketeering.    

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Pop Culture Impediment and Career Advancement


The-economist-cover-facebookA couple of months ago I was working with a client, primarily concentrating on the improvement of accounting policies and the transition from QuickBooks to ERP. In the process, I interacted a lot with the company's staff accountant.

She is a sharp and ambitious young woman from Pacific Asia. I liked her very much and was particularly impressed by her outstanding work ethics (a rarity nowadays). She's been with the company for nearly two years and this was her first job after she got her BBA in Accounting.

Her knowledge of bookkeeping basics was pretty solid, which gave her much confidence. She was determined to leave the company and look for a job that would give her a faster career track. Never mind the fact that I've discovered a lot of errors and holes in those areas of company's records that pertained to somewhat more sophisticated concepts, such as Inventory/COGS conversion and revenue recognition.

It wasn't entirely her fault. She didn't have a benefit of working with a seasoned supervisor and wasn't savvy enough yet to understand that accountants were expected to look for standards pertaining to a specific industry. She is a capable individual, though, and most likely will get better with years. Hey, under contemporary standards, she is probably in a top 10% of quality workers. Those experience and knowledge gaps are not the reasons why I think it's unlikely for her to have a high-level career in an average American company.

Here is what happened during that consulting engagement.  Facebook filed S1, thus making public its hopes for a $5 billion IPO. The 02/02/12 issue of The Economist arrived at the client's office with a cover spoofing Mark Zuckerberg's profile on his own website, completed with Caesar's boast as a "status" and comments from various "friends," including Bill Gates, Matt Romney, etc.

Unfortunately, the "author" of the most amusing comment was obscured by the embedded subscriber's label – one could only see two letters "ge." I read, "The Death Star is fully armed and operational" and laughed, "This must be Google." The girl was standing next to me. She said, "It's 'ge,' not le' we can see." I explained, it's Larry Page of Google. She looked doubtful and also didn't understand, why I found it so funny. Something hit me and I asked, "Do you know what the Death Star is?" She shook her head, "No."

I didn't show it, but I was very surprised.  I understand that she was isolated from the rest of the world back home, but she graduated from high school and college here, in the States. I took her out for lunch and spent 40 minutes explaining: Larry Page, Sergey Brin, Google – Facebook competition, "Stars Wars," the Dark Side, Jedi, the irony of the reference – all fresh news to her.

This incident put me into an inquisitive mode and from time to time I threw well-camouflaged, unobtrusive questions at her.

"What kind of music to you like?" "Pop." "Like who?" "You wouldn't know them." "Try me. I am extremely eclectic when it comes to all arts. Who is your favorite band?" "They are all Asian."

Some time later she ventures, "What are your favorite bands?" "It's a long list, but there is a Top 10 that I can never rank – like Led Zeppelin, Radiohead, Nirvana, Pink Floyd, Queen…" She said she'd never heard those names. I am ready to give up, but still, "The Beatles is one of my Top 5." She has heard the name, but never listened to their music. My heart aches in utter pity.

Every night she watches funny videos from her home country on YouTube. How about TV? (C'mon, people all over the world watch American TV shows . In 2004, I flew from Amsterdam to Istanbul and saw a Dutch girl watching an episode of "Six Feet Under" on her laptop). Alas, not this girl, "I don't watch American television."

The question is, does this hard-working, diligent, and fairly bright person have a chance of ever becoming a partner in an accounting firm, or a corporate CFO, if the said companies are not under Asian management? Unlikely.

The higher you advance in your career, the more you have to communicate with people around you. Nobody sticks to just business, there is always the small-talk. People will be discussing the latest "Homeland" episode and she won't even know what it is? When everyone starts noticing, what will they think? In this country, pop culture is like English – a common language of the melting pot, and you must be able to speak it, or you will devalue yourself in the eyes of others.

To tell you the truth, in spite of my religious belief in the merit-based system, I don't think that this is wrong. You don't have to like pop culture and, like me, you can criticize its prevailing weaknesses all the time. Yet, not to be aware of it entirely – that's just strange. Someone who does her job well, but is so disinterested in her immediate surroundings, will be considered a reliable functionary, but unlikely to climb too high up the corporate ladder.

“The Social Network”: A Case of a Failed CFO


Social_network_Andrew_Garfield_04 It's the Oscars week.  You cannot escape the promotional hype unless you cut yourself off from all media. 

The movie leading in the preliminary rounds (Golden Globes, various Guilds, etc.) is "The Social Network."   It's not surprising – the popularity of this movie is rooted in public's preoccupation with sudden success and overnight rise to riches.

Well, the reason for me to write about this film is that I cannot miss the opportunity to discuss a character, who in 2004 thought of himself as a CFO of Facebook. 

When Mark Zuckerberg appointed Eduardo Saverin to be his CFO, it was a logical step for the 20-year-old code-writing CEO.  Saverin was a close friend; appeared to be versed in business matters; more importantly, he had personal funds, having just made $300K through savvy oil investments.  Is this enough to make somebody an acting CFO?  Of course, not.  However, one could have learned how to be one.   It was not the case here.

If nothing else, the movie provides vivid illustrations to what a real CFO should NEVER-EVER DO.

1.  The first thing that Mr. Saverin did wrong was not taking his appointment seriously. He did not bother to define his role, his functions, his practical responsibilities.  If you are not creating the product itself, you should be doing other things that make you irreplaceable.

2.  When you accept CFO position, you become your CEO's partner.  That means you develop common vision, you define company's mission.  When it's finalized, you shove your disagreements aside and you do your best to facilitate the success on the chosen path.

3.  You NEVER separate from the company.  All experienced CFOs know that things can happen behind your back even if you seat in the next-door office.  If you are on the opposite coast and out of touch, consider yourself out.

4.  With startups, you should always try to utilize your company's growth potential to the fullest and then capitalize on it.  If Mr. Saverin wasn't so arrogant and argumentative, he most likely would realize that  online advertising brings real money only on a big scale.  Hence the right strategy was to look for more investors for the company growing with an astronomical speed.  Instead, he wasted his time setting up appointments with advertisers.

5.  If you want to stay with the company, you shoud NEVER do anything to damage it out of spite: closing accounts, calling the cops – that's just wrong.

6.  And you ALWAYS, not just read, but study every single legal document you sign.

Following the film's paradoxical leitmotif of an awkward kid creating the largest social network on this planet, the filmmakers suggest that Mark Zuckerberg pushed Mr. Saverin out of Facebook, because Eduardo got accepted into The Phoenix Club at Harvard.   

"You may say that I'm a dreamer," but I want to believe that Mr. Zuckerberg and people around him realized they have no use for someone who couldn't contribute into the exploding enterprise's development.  Just screaming all the time, "I'm the CFO," doesn't make you one.