Author: Marina Zosya

“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.             

 

Job Search: CFO’s References Trap


I have no clue how those big-time CFOs, with seven-figure salaries, manage to get fired for screwing up and immediately land new jobs.  It's like, their skins are coated with teflon and nothing sticks.  And that's fine.  May be they deserve such recognition.   Most definitely, the companies who hire them deserve what they get.

Those CFOs and Controllers who toil in smaller companies, rarely get fired for poor performance.  If they are knowledgeable, diligent and hands-on, they don't screw up.   Yet, no matter how hard they work, they can loose their jobs.  The owner retires; or someone makes him an offer he cannot refuse; or, despite everyone's best efforts, the business goes under.  Very rarely one of us gets fed up with the abuse and quits on his own – I know a few  brave people.

Well, nobody waits for the unemployed small business CFO or Controller with a new position.  Nobody knows who he is.  There are nearly 6 million companies with less than 100 employees in this country.  Recruiters have never heard of them.  So, this erudite, experienced, smart and loyal professional is thrown into the grinding machine of job searching, where every CFO/Controller listing generates thousands of responses. 

It turns out, the trickiest part of the small business CFO's job search is the references list.  Of course, you've got your connections – bankers, auditors, attorneys.  There are former coworkers and subordinates who will be happy to speak about you.  You compiled a two-page long list of excellent professional references.  But… it fails. 

Why?  Because there are no "supervisors" on the list.  Well, technically, if you are a real CFO, no one supervises you.  The only person (sometimes, there are two)  between you and the higher powers of the Universe is the Owner/CEO.   And how many of them did you have in the past 15 years anyway? Two?  Three?

In some instances, they are still reachable and you have permission to use them as references.  However, most of the time…  Who are you going to use?  The one, who sold the company and went back to Thailand?  Or the guy who has  been hiding from creditors and changed all his contacts?

Now you have this prospective employer – another privately-held company.  You passed all interview levels, including the owner.  He seems to like what he is hearing from you very much.  At the end, he asks,"May I have your last boss's number?"  Didn't you just tell this guy that you were cheated out of your annual bonus at that job?

Here is my advice: 

  • ALWAYS expect that someone will want to speak with at least one of your old bosses. 
  • During the interview process, never reveal anything that may come back to haunt you. 
  • If your wonderful reference list is not enough, never show any resistance to providing the former bosses' contacts.  It's very suspicious and will end your chances right then and there. 
  • Give them whatever info you have. Who knows what's going to happen?

This is the best you can do. 

Quote of the Day


"Income tax returns are the most imaginative fiction being written today."

                                                                                            Herman Wouk

The Best Boss in Cinematic History


Ever since I started this blog, I have been searching my memory for a movie character who would exemplify the "ideal boss."  And I don't mean just some harmless person who stays out of your way.  Those are not good bosses – they don't bother you, but they don't improve your professional status either.  I mean a really-really good boss: someone who pays attention to his employees' progress, to their state of mind; someone who facilitates utilization of employees' potentials to the fullest; someone who goes out of his way for the sake of his subordinates' job satisfaction.

I know it is a mythical creature of Gandalf and Dumbledore proportions.  That's why I wasn't looking for real-life examples.  I have never met such a boss.  And even though I try very hard to be a decent manager myself, my professional existence is too erratic for following through with all good intentions.  Moviemakers, on the other hand, are in the business of creating larger-than-life characters that don't necessarily reflect reality, but provide for highly engaging and, in some rare cases, intellectually impactful experiences.  Look, Francis Ford Coppola and Mario Puzo gave us a myth of a person for whom honor, love for his wife and children, and fairness were the most important things in life – Vito Corleone.  Do people like that exist in real life?  Of course, not.

I love and know Cinema.  My tastes are very eclectic.  I don't go for the mainstream adventure crap of the Clash of the Titans type.  But, from Federico Fellini's Casanova to Mike Judge's Idiocracy, from Lars Von Trier's Dogville to Guy Ritchie's Snatch, if it's anywhere between good and brilliant, I saw it.  There are American and foreign directors whose filmography I can recite by heart.  I go to festivals and have an IFC membership.  Surely, I thought, I can come up with a character that fits my description of an ideal boss.

Alas, it was not easy and took me several months of periodic pondering.  But last week, it finally hit me.  Eurika!  I found him!  It's the San Franciso Police Department captain in So I Married an Axe Murderer wonderfully portrayed by the great Alan Arkin.  This guy not only notices that something is wrong with his employee, Charlie's friend, officer Tony Giardino (Anthony LaPaglia), but he actually listens to his complains.  Moreover, for the sake of raising his employee's morale, he goes out of his way and indulges Tony's fantasy.

Just watch (by the way, I am very grateful to whoever smoothly compiled this video, which actually consists of three separate clips from different parts of the movie).



 

Do bosses like that exist in real life?  No, but it's fun to watch and dream. 

   

Your Boss: Value and Madness of an Entrepreneur


Many of my correspondents (CFO's, Controllers, Financial Directors) tell me that the biggest source of their stress and anxiety is the Boss.  I am sure we will be addressing this topic many times in different stories.  President, CEO, Owner, or whatever title they have chosen for themselves, more frequently then not, these entrepreneurs are the main reasons for our frustration.

Some of them are courageous and brilliant who actually foster and lead, others are batty and lucky who succeed in spite of themselves, and the others are lazy and disinterested who ruin everything even with our best efforts in place.  Regardless, they have few things in common. 

First of all, we can never forget that they are the ones creating jobs.  That's a tremendous achievement.  They've got to be madly brave to go out in the world and implement their ideas, sometimes against all odds.  If they succeed, they build companies that not only create products and services, but also employ people and pay them salaries.  They take insane risks and end up with entities that can afford to hire CFOs, Controllers, Financial Directors, i.e. us.  And even if the Bosses are not the founders, but heirs and the business just fell into their lap, until they destroy it, they are the employers and our salaries are coming out of their pockets.

Of course, as financial execs we kill ourselves in order to either facilitate their success and prosperity or stop them from  killing the business.  And even though we are concerned with our own material well-being just like anybody else, at the end of the day all of our efforts in a private company end up to be about guarding the owners' private purses.  That kind of a responsibility to a person in the office few steps down from your own brings the level of pressure to a completely different level.  It is not the same when your "owners" are some unknown masses of mutual fund investors.

But the most prominent common denominator of all small and mid-size CEOs is that they are all afflicted by the same disease – something I call an entrepreneurial bug. The business development machines in their heads run forward ahead of everything else.  They want everything to be done yesterday, and those who cannot make it happen or voice their concerns are considered to be obstacles on their way to success. 

Because it is up to us, CFOs and Controllers,  to make sure that the back office, the financing, the structures, the control procedures, etc. are on the par with new developments, we frequently find ourselves at odds with our Bosses.  We are called negative, uncooperative, difficult, etc. etc.  Nevertheless, we must be strong and do our jobs right, because if we fail to cover their fast running asses, everyone will get hurt, including the Bosses.