More Americans fell below the poverty line last year, according to U.S. Census Bureau data released Tuesday.
The nation's poverty rate rose to 15.1% in 2010, up from 14.3% in 2009 and to its highest level since 1993.
Last year marked the third year in a row the rate increased. All told, 46.2 million people are considered in need. In addition, real median household income last year was $49,445, a 2.3% decline, the Census Bureau reported.
I remember reading Dale Carnegie's How to Win Friends and Influence People when I was about sixteen years old. Early in the book, he talks about dangers of criticism and gives examples of written but unsent letters: by Abraham Lincoln, Theodore Roosevelt, Mark Twain. It made a great impression on me. I cannot avoid being critical entirely – the tongue is difficult to control. However, I made a rule of letting stinging letters to stew for 2 days. Then I re-read them. If I still think it necessary, I send the letter. 90% of the time it doesn't get sent.
This is a recurring topic for management training gurus, self-help writers and bloggers. They say,"Write an angry letter, if it makes you feel better, just don't send it." Unfortunately, no matter how many times people hear that advice, they write and send flaring mail, causing commercial and social damage. If the problem was not persistent, there wouldn't be any demand for products I have described in the Cautionary Tale About Artificial Intelligence Progress.
As CFOs and Controllers, we deal with a lot of irking and ireful people. With my firm believe in therapeutic qualities of writing, I always advise to let the paper or the monitor to bear your negative emotions. As supervisors we also have to manage the anger of our subordinates. How do we prevent hostile writing from going out?
In the times of hand-written letters, it took longer to complete them. Plus, you had to stuff, seal, stamp and post the envelope. By the time you were done, you might have changed your mind about the whole thing. Dictating a letter worked even better. Saying the angry words out loud had a potential of making you sound ridiculous even to yourself, leave alone those girls in the typing pools.
Emails made us more vulnerable to our impulsiveness. In the beginning, at least the ISPs were slow enough for you to recall the unwanted message. Nowadays, soft keyboard, easy mouse, and fast internet create a volatile combination.
Here are few preventive measures I can recommend:
1. Always leave "To", "Cc" and "Bcc" fields of the email header blank until you are absolutely positive you need to send it.
2. Re-read your letter at least three times right away and then yet another time later.
3. I have previously described my habit of putting stick-ons, stating "Please re-read all your emails before sending them out," on the sides of employees' monitors. If you know that you suffer from the short writing fuse, then stick one on your own monitor as well.
4. Whether for my electronic or conventional mail, the 2 days stewing rule works very well. You should try it too.
5. The Frustrated CFO actually offers a healthy alternative allowing you to go a step further than just writing your message. Sharing your stories here lets you spill your frustration onto the virtual page and actually send it. Not to the object of your anger, but to me – an understanding and compassionate reader.
Since Walmart and their subsidiaries (including Sam's Club) are public companies, the Waltons (Jim, Alice and S. Robson) are on the Forbes' billionaires list – numbers 20, 21, and 22 at $21 billion each. That's their holdings in Walmart stock. Well, let's say there is a few more billions in their private holdings. Does not matter. When it comes to bargaining for the Walmart's interests they come as one, so to evaluate their real power we should combine their wealth. That puts them into competition for the first place on the world-wide list – definitely above Bill Gates and Warren Buffet. No question – a very power family.
Many people have problems with Walmart for many reasons – they destroy local business, they discriminate, particularly against women (Funny how that class action suit was dismissed by the Supreme Court on account of women being too different to represent a class. Well, they all have vaginas, don't they?) But you cannot deny the fact that they are the country's largest employer with a steady growth. Remember my previous New-York-Magazine-Intelligencer-prompted post The New Economic Reality of Unemployment? 2.1 million people – where would they go, if it was not for Walmart? Of course, most of them make very little money, but it's still more than the government's help.
Anyway, it's a free country and I love capitalism (not the bastardy, distorted, perverted paper version we have now, but the real demand & supply model). Then again, if they push out of business your local bakery, there is no way you will ever be able to get the same quality bread in Walmart. So, that's kind of sad. But as long as they compete fairly…
Well, that's a bit of a problem. Look, now they are planning on coming to the place that cultivated boutique retailing for decades now, my hometown – New York City. And there is nothing fair about the way they try to get in. As a matter of fact, they do it in the most perverse way – by buying their way through resistance with charity donations. According to Eric Benson's Intelligencer report from the last New York Magazine shown here (you can also read it here Big-Box Rolling), since they started campaigning for the location in Brooklyn, they have spent $13 million on charitable giving in New York. Which small farm-to-table store can compete with that?
And I am sure there are plenty of people who think it's a good thing – "they are helping…" They are helping themselves to increase those $260 billion of annual revenues – that's what they are doing. They did not give a penny to those charities before and, I am sure, if someone told them "No" today, the donations would stop immediately. How sick is that? You cannot openly bribe the officials, so you do this? That's not charity, that perverse marketing, and they shouldn't be allowed to use it as a deduction on their tax return.
Well, what can we do? They are super-rich. As I said in my last post, they can do WHATEVER THEY WANT.
Let’s say, as a CFO or Controller you have all policies outlined and procedures carefully designed. Everything is properly documented and bound into books and manuals, which are readily available for orientation, training, and daily reference. Through intensive internal audit program all components have been examined; everything have been tested in practice. Whatever did not work well has been tweaked; cumbersome procedures were replaced with more straightforward ones; the inferior ones have been improved.
Finally it has been determined that the internal control system is both effective and efficient in accomplishing the company’s goals and the executive management’s objectives. Is it reasonable at this point to expect that everything should be working like that expensive watch I keep mentioning as a model of a perfect mechanism? Unfortunately, not.
We don’t exist in the virtual world of The Matrix trilogy, where everyone is manipulated by the digital code. In real life it is the other way around: our well designed systems and structures depend on being properly handled by people. Their proficiency and diligence determine how well the policies and procedures are being performed. The truth is that every task performed by an employee is vulnerable to occasional unintentional errors, consistent sloppiness, and even deliberate mishandling.
Any designer of functional systems, with frameworks that include people as key elements, knows that humans are the weakest links in the chain of actions. Long time ago, when computers were so huge that a single unit occupied a hall the size of the New York Public Library’s Reading Room, all programs and data were coded on punch cards. A punched out spot was read by the computer’s card reader as a character or a digit. These cards were manually created by operators trained to use a keypunch machine. Guess what? Two separate people produced every card in duplicate. No exceptions. If the cards did not match, they have to be re-punched. Thus, the risk of human error was managed.
Such duplication of staff is unthinkable now. Today, we rely on computer systems to reduce at least the most common of the risks. The rest of flaws must be caught through vigorous and persistent scrutiny of performance quality. Monitoring is the cornerstone of internal control and one of the most important responsibilities of a supervisor. It brings the entire system together and assures that policies, procedures and people concur. A series of timely and thoughtful tests should become a part of your, or your internal auditors’, routine.
Remember: If not corrected, every mistake your employee makes will end up in financial data, documents and reports, for which you are ultimately responsible. One erroneous entry may affect your bank’s collateral statement or a presentation to the board of directors. Omissions will impair strategic decisions. Communication mishaps can impact commercial relationships. These flaws will most definitely be a poor reflection on your reputation as a financial leader. You have to create filters that will catch the debris before they pollute the results of your hard work.
You can read about various practical techniques of reducing accounting and finance systems' vulnerability to human factor in my upcoming book "CFO Techniques" (Apress, 12/02/2011), now available for pre-order at Amazon and Barnes & Noble.
I touch on the gender inequality among financial execs once in a while – an obligatory topic for a female CFO/author/blogger. I mean, everyone writes about it. Entire institutions and organizations compile sociological studies dealing with these issues. None of it seems to be creating any changing momentum, but hey, at least someone is willing to pay the researchers their salaries.
The interesting thing, though, that most of the time these topics (including my earlier posts) deal with the social, rather than practical, aspects of the phenomenon. People talk about advancement rates, compensation levels, female-to-male executives proportions, etc. In a very scientific way, we say: all things being equal (education, achievements, intelligence, etc.), women still don't get a fair shake. And nobody talks about the fact that, on a practical level, things are never equal between men and women, who strive for, or already achieved, top job positions.
First of all, women by nature are more conscientious and responsible than men. That is why we have higher percentage of female straight "A" students both in high schools and colleges (yet, there are more male valedictorians!). Secondly, women know only too well that they are at disadvantage due to the simple fact that they are not men. That makes them work ten times harder than any man in their position would. So, in truth they get rewarded at lower rates not for the equally good work, but for the job done much better.
But the biggest practical inequality occurs on the executive's home front. I remember having a friendly airplane conversation with my CEO, on our way to a meeting in Germany. At one point he said that I was the hardest working person he knew besides him – he honestly believed that he worked as hard as I did. Of course, he was talking about the job itself. Well, I thought that even at that I worked much harder (I did not take Friday's off during summers), but I chose to turn to more obvious facts of life.
I asked, " Who prepares your suit, shirt and tie for tomorrow every evening?" "My wife," he said. "We frequently work until 9 or 10 pm, is the dinner ready, when you come home?" "Yes." "Who writes checks? Who deals with repairmen? Who talks to teachers? Who buys groceries? Who takes kids to the doctors'?" "The wife" was the answer to all the questions. "Now, who do you think does all that in my home?"
He knew the answer, of course. So, every day I was working my executive job, let's say, just as hard as he did, plus his wife's job. And that's true for most of female CFOs, whether married or single, with or without children.
Look, how many unmarried male CFOs or Controllers you know? I don't know any. Even if their wives leave them, they get remarried very quickly – someone needs to take care of the home front.
On the other hand, a woman expected either to give up her personal life for the career, or hide it away, as if she does not have any. It is especially true for those female executives who work in small and midsize companies – the salaries are not large enough to afford a Mr. Mom of a husband. So, we are talking inequality cubed: the majority of women work harder, plus cover the home front (or give up life outside of the job), and still get paid and promoted on a much smaller scale.
Here is the funny part. At the end my boss asked, "How come you still read more than I do and go to the theater all the time?" "Because I don't sleep," I answered.
The Frustrated CFO 