“We Are Good Bosses,” Says One Boss to Another


Screaming BossSo, that's how these people manage to live with their own shitty selves!  They walk around with a clear conscience; with no doubt in their souls about their actions.  They don't think about the injustices and the insults of different caliber they spread around with every step they take.  They don't even qualify them as injusticies and insults.  Instead, they pat each other on the backs and tell themselves that they are good bosses!  Their self-delusion probably goes even further: I am terrified to think about it, but they might have convinced themselves that they are good people.  Honestly, the idea of these people going through their lives thinking that they are saints makes my skin itch on the inside.  

To tell you the truth, I prefer honest assholes, like the ones whose primary traits are itemized in the list provided by the Time's article attached on the bottom of this post.  They are at least somewhat conscious of their attitudes and  justify their behavior with the "business necessity."  You know: A man's gotta do what a man's gotta do – that sort of thing.  I also think that self-aware bastards are less casual with their cruelty.  Unless they are real sadists, they apply it knowingly and, therefore, sparingly.  

The conversation quoted in the title is not an allegory: I actually had the misfortune of witnessing it.  I had to summon all my will power not to burst out laughing at these jerks.  I've had pangs of suspicion that many business owners felt good about themselves, but this was the first time one of them actually voiced such self-deception in my presence.  Why was it so bitterly funny?  Because, the statement was prompted by their finally adapting a pension plan they promised their employees two years ago

These are employers who pick favorites and treat them with an obvious preference, while discriminating against others.  They forget to disclose new commercial initiatives, thus forcing everyone to run against time in order to turn their ideas into business realities.  They will not hesitate to make a "good-natured" joke at an employee's expense or brazenly comment on someone's deficiency.  The list can go on, and on, and on, and on…  What can I say?  Swell guys! 

But let's see.  What are (in my opinion) the attributes of a really Good Boss???

1.  Fairness and objectivity; no bullshit like, "I don't like that bitch's personality, so I don't care if she's going to leave, even if it'll hurt my company."

2.  Dedication to a merit-based system of rewards comprised of both tangible and moral incentives.

3.  Intelligence and business acumen that perpetuates the company's success and keeps employees gratified that they don't work for an incompetent idiot.

4.  High performance standards applied equally to everyone – first and foremost to his/her own work.

5.  Capacity to fully comprehend the abilities and  values of their direct reports.

6.  Sufficient organizational savvy to match subordinates' abilities with functional tasks.

7.  Acceptance of personal responsibility as a job-creator and human-resources leader.

8.  Strong emphasis on the development of employees' know-how and professional growth.

9.  Balanced combination of delegation and efficient supervision; none of that hands-off micromanagement crap I write so much about.

10.  An actual effort to understand people working for the company.

11.  Sufficient tact and self-confidence (!) to prevent casual personal insults, usually resulting from deeply seated insecurity.

12.  And this one is just for me: For once in my life I would like to work for someone with a good memory, because I'm fucking fed up with their forgetting time after time the stuff I say, write, and report to them.   

So, my dear business owners and other chiefs, try to test your performance against the criteria above and see how you do.  None of the "good bosses" I know would score enough for a "D" grade.

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CFO Folklore: Mortal Kombat – CEO vs. Outlook, FIGHT!


MK 3I am the biggest advocate of an entrepreneurial CEO's freedom from any administrative, technological, and infrastructural minutiae.  They must not busy themselves with making their own reports or calculations in Excel, devising organizational routines, catering to bankers' demands, nurturing relationships with customers, etc.  They have functional executives and senior management for that – CFOs, COOs, CIOs, Controllers, Sales VPs, etc. 

An effectual CEO should be focused almost exclusively on the strategic development of the business and the tactical decisions pertaining to the company's survival and prosperity.  Therefore, he may be, but  doesn't need to be an Excel pro, an IT geek (unless, of course, that's the business), a bullshitting ace, or a financing maverick.  He must be a visionary – that's all.  I stated my position on this issue multiple times and dedicated an entire post to the defense of CEO's limited scope of responsibilities.  I even wrote about it in CFO Techniques.      

I have to say, though, when it comes to technology, for most CEOs outside of the high-tech industry, it's not even the result of division of labor -there's some sort of a pervasive impairment.  Most business owners I know personally or have heard about from other people are not very technologically advanced, to put it mildly. 

There are CEOs who call for help every time they need to insert a column in a table; are incapable of  logging onto a network; and wouldn't touch scanners even if they stand right on their desks.  And that's Ok.  As I said, they don't have to trouble their valuable heads with these things as long as they attend to their primary job and manage to be brilliant at it. 

However, we do live in the second decade of the 21st century and some level of sophistication in the ways of contemporary communication is simply required.  It has nothing to do with being a small business owner, a big-time CEO, or The President.  This is one area of technological advancement, where everyone at a certain point had to overcome their innate resistance to novelties and get on with the program.  Radio, telegraph, telephone, video transmission, cellular connection, etc. – they have simply become mundane tools of every-day existence.   

Nowadays, using electronics as a means of organizing your life and exchanging information is as elementary as turning the pages of an old-fashioned desktop calendar.  And if you don't know how to do it, it makes you look silly and inadequate; it's simply unbecoming for a business leader. 

I currently have a client who comes to the office on Saturdays and Sundays because he cannot follow instructions on how to access his business emails remotely or push them through his iPhone.  His partners, employees, and commercial associates laugh about it behind his back.  It's likely that these inadequacies have an impact on their overall attitudes towards this business owner.

But I am particularly annoyed with those CEOs who are not able to utilize Outlook beyond the most primitive actions of receiving and sending emails.  I mean, for businesses operating in the PC environment, the program has become one of the most vital cross-functional tools since 1997!

I am currently exposed to one of these.  At this point I've already resigned myself to the sad fact that she will never learn how to accept or reject meeting invitations.  I wouldn't even dream of her creating one herself.  She will never get rid of her humongous appointment book, which, due to its instrumental limitations, is incapable of reminding her of important events or tasks at hand.  However, emails are her life, she lives and breathes them.  Wouldn't she treat them with proper care?  Guess again.

The other day she comes over to my office and asks if I still have "that email about…" (the subject matter is irrelevant).  Of course, I do.  She is standing right next to me looking at my screen, prepared to read the email with me when I find it.  I switch to Outlook, which is opened, as always, on the Inbox.  There are maybe 10 emails there, which arrived in the last 30 minutes.  "Where are all the emails?!" she is utterly surprised, "I keep all important emails.  I've got hundreds of them."  "So do I," I reply, "But not in the Inbox, of course."  I slide to my Navigation Pane, go straight to one of my 30 subject folders.

She is not stupid and she is a pretty good CEO.  She understands the importance of time-saving tools.  But she is too proud.  She will not ask me or any of her employees how to do it.  And so, she continues searching through hundreds of messages in her Inbox.             

CFO Folklore: Ignorantly Insolent Bosses


Panda AccountantIn accounting and auditing, first two months of a fiscal year (for most, January and February) make up a period of Subsequent Events, which are directly related to a company's previous year's Financial Statements.  Goods listed as 12/31 inventory are (hopefully) selling; last year receivalbes are being collected; cash being disbursed for unpaid expenses that comprised your year-end payables and accruals.  Financial auditors specifically target these post-12/31 sales, receipts, and payments to test the accuracy of the Financial Statements.  

Business owners, most of them lacking formal accounting knowledge, are especially confused about the expenses: they see payments being made now for the last year's interests, services, and commissions, and it worries them that somehow the current period's profitability will be affected.  Never mind that every year you explain to them that these items have been already recognized as expenses in the previous fiscal period through payables and accruals, and, therefore, impact only current cash flow, not the operational performance.  Even the ones who don't ignore your explanations and, furthermore, remember some of the terminology you've used, can't help but be a little disconcerted.

So, let's say last week (a week of 02/11) you have approved a $75K commission payment due to a procurement agent for the fourth quarter of 2012.  It requires a second signature – your boss's.  Now, she sees the check and your approval.  She knows your qualifications and what you've done for her company.  Before meeting you, she didn't know anything about accounting and finance at all, but she has learned a great deal from you.  Yet, she is a Business Owner – someone who is not capable of making an effort to overcome her impulses.  The strength of the "I-pay-you" sentiment in her subconsciousness is empowering.

So, she comes to your office, announces the topic ("This commission check") and tries to formulate the question.  First, she mumbles something about "the last year's income," and then the light bulb comes on in her head and she asks, "Was the expense accrued?"

Your mind is very fast and in a fraction of a second a swarm of neurotic, childish thoughts storms through your head: "Are you fucking joking me?  This is from someone who had no concept of revenue and costs recognition?  From someone who like a fucking bookie recorded everything when cash exchanged hands?  You, bitch, didn't have proper records, reports, financial statements!  Your tax returns were made up!  Did you forget that the bank demanded you hire a CFO before they gave you the credit line?  Now, everyone gets weekly, monthly, quarterly, annual reports and statements, thanks to ME!  I pass audits and bank exams without anybody finding a single error or omission!  How dare you!!!"

But you have two post-graduate degrees, 20 years of business experience, a book on CFO's functionality, 10 years of age, and a lifetime of hard knocks over this privileged pixie financed by her husband.  So, you look her straight in the eyes and calmly, almost jokingly, say, "Are you checking on my work?  Accruals and prepaids is what I do.  This was a 2012 expense and, in accordance with the Generally Accepted Accounting Principles, it was recognized as such."

Look, the truth is you should not get upset at your bosses for who they are.  "…Forgive them, for they know not what they do," and all that.  I always say, they are like spoiled and unruly children, who cannot control themselves.  And as long as you need the salary, you have to continue swallowing their shit pills. 

I wish I could stop taking incidents like that personally.  People with my intellect, background, knowledge, and experience – professional, psychological, cultural – should just brush it off.  Yet again, if I was able to do it, I wouldn't have had this blog.

If You Are Cheating on Your Taxes, Don’t Step on Anyone’s Toes



I’ve been going to the original Bumble & Bumble salon on 56th Street since… Well, who cares?  Especially when we talk about, to paraphrase Benjamin Franklin, the only two certain things in this world – our attempts to resist aging and taxes.

All I’m saying is that I have a first-hand experience with the house that Michael Gordon built – in this very location, starting back in 1977.  In fact, the masters I come to see here have been at B&B since the very beginning!  This says volumes about the environment of the place. It has a very unique ambiance – you feel special there.  That’s why the company has an impressive record of retaining clients and employees alike.

Up until the 2006 sale of the B&B brand (the salons, the products, et al) to Estee Lauder (most people don’t realize that it also owns Clinique, MAC, Bobbi Brown, La Mer, Origins, Jo Malone, Smashbox, Aveda, and Darphin), from time to time you could catch a site of Mr. Gordon on the premises.  His mannerism always struck me as a peculiar combination of a relaxed composure (grapevine has it that he is into Buddhist spirituality) and a blatant assholiness toward some employees.

But, as I always say, you don’t get to be a successful entrepreneur by being warm and fuzzy.  To survive in business you need to be tough.  Some of us can be tough and decent at the same time.  Unfortunately, that’s very rare.  Well, since I didn’t need to deal with him personally, I was able to abstract Michael Gordon into what he was as a small-business owner: someone, who started from nothing and grew his brand to international recognition.  I admired him for his courage, drive, and strategic savvy. 

Also, one cannot dismiss the fact that for Mr. Gordon it wasn’t just about branding, growth, and money.  He was truly a hair-man, devoted to the idea of creating high-quality products that satisfied a wide spectrum of needs.  Unlike the vast majority of other famous salon owners (Sally Hershberger is one example), who are engaged in “private label” merchandising (i.e. buying generic, mass-produced,  “juice” and pouring it into containers with their names), Michael Gordon actually developed unique mixtures, which are used to great effects in many salons and homes. 

It was his quality standards and unrelenting drive to succeed that fascinated me.  Imagine my surprise, when I read in New York Times that this remarkable and shrewd businessman was arrested for tax evasion.  And it wasn’t even for something cleverly devised (not that I would approve that) – no, it was plainly stupid: he didn’t declare on his tax return the $30 million capital gain generated by that famous sale of B&B. 

The charges (both criminal and that of stupidity) against him are mounting: when he was questioned by IRS about this omission, he claimed ignorance of the fact.   And that’s lying to a federal agent, because apparently there is evidence of his active attempts to hide this money. 

What is the point of lying like that anyway?  Didn’t he sign his tax return back in 2007?  He never heard of capital gains? Weren’t there a horde of lawyers and accountants involved in the closing the deal?  Nobody mentioned the tax liability?  Hard to believe.     

NYT didn’t make it a secret that IRS has acted on a tip received from a “confidential informer.”  Of course, they did.  Truth be told, IRS doesn’t have sufficient resources to look for specific violations of the tax code.  The best they can do is to react to the red flags selected by their algorithms.  Your employer reported your earnings, but you didn’t include them on your tax return – an inquiry will commence.  Itemized deductions  exceed certain levels, even if by $100 – the flag will be raised.  Meanwhile, corporate executives receive multi-million dollar perks and call them “business expenses”; private shareholders transfer stocks and property between related parties and don’t recognize capital gains; owners make equity withdrawals and show them as loans – and none of it ever get noticed.  

However, the situation changes if someone makes a call, sends a letter, or an electronic message to IRS, detailing a case of the tax evasion.  If this someone provides sufficient information and the violation is big enough to prick up agents’ ears, they will be on the case right away.  Especially if it involves a notable figure that can get media interest (hey, you cannot blame IRS agents for wanting some attention). 

Even though IRS has, what they call, a whistleblower reward program, it’s not easy to get paid for reporting tax violations.  Obviously, in most cases, the informants are not motivated by money.  Typically, they have some sort of a relationship with the evader and it resulted in two outcomes: an incredible animosity that goes way beyond a simple grudge and the knowledge that the government is being shortchanged.  The IRS becomes a mere weapon of revenge.

This is why Leona Helmsley went to jail in 1992.  The Queen of Mean dragged behind herself a trail of disgruntled contractors, corporate employees, and household help, who really hated her.  Some of them possessed hard evidence proving that millions of dollars spent on personal properties were billed to Helmsley’s real estate business. 

And that’s why Michael Gordon got arrested.  In his brazen manner, he must’ve rubbed the wrong way someone with the first-hand knowledge of the $30 million unreported gain.  That hurt someone dropped a note to IRS.  

Do I have to state the obvious?  Don’t steal big bucks from government – it’s dangerous.  But if you make a conscious decision to dodge some taxes, make sure that no one knows about it but you.  And I mean NO ONE.  If that’s impossible, make sure that you are super nice to those who are onto you – they have your freedom in their hands.      

Legal Expert’s Rundown on Employers’ Rights to Discriminate


ImagesI frequently write (and talk) about the distortion of bill of rights in the workplace and other similar perks of employees' existence.  Hell, I even have a separate category for posts devoted to nepotism. I always stress out that small-business employers can pretty much define their own rules, as long as they put them in writing and notify new hires of how things are done in their domain.  Not only that labor authorities don't look into employment conditions of companies with less than 50 employees, but, even if one or another wrong-doing is brought to their attention, they will take the corporate side as long as there is a correspondent written policy in place.  And think a hundred times before suing your former employer – you may end up staring at a defamation law suit filed against you. 

Now, I have an opportunity to direct my readers to an expert's list of legally permissible ways employers can discriminated both existing employees and job applicants in a business of any size – big or small.  I have previously quoted a veteran employment law specialist and award-winning writer Donna Ballman on the issues of workers' rights.  And, as you can see, her popular blog Screw You Guys, I Am Going Home is a single proud member of my Blog Roll.  I highly recommend for everyone to follow the link below and read her latest contribution to AOL Jobs – the characteristically concise summary of legitimized discriminatory practices.  I guarantee that at least some of them will surprise you.

8 Ways Employers Can Discriminate Against Workers – Legally by Donna Ballman