Category: Business

Job Search: Out of Work for a Long Time


The media, politicians and economists are trying to convince everyone that recession has ended many months ago.  Well, good for recession, but from what I observe, a lot of folks are out of work.  There have to be a reason why unemployment benefits are extended up to 72 weeks in most states. 

Let's face it, the "employment gaps" are far longer now than they have been in many years.  It is especially true for CFO's and Controllers whose small and mid-size employers went out of business or contracted to the level of not being able to afford senior management.  Even though I never believed the old recruitment fable that every $10K of your desired compensation translates into one month of job hunting, the basic rules of statistics prove that it takes longer to find a high level position simply because there are less of them.  Now the available openings are further reduced by the economic contraction.  There are government aid packages designed specifically to stimulate hiring by small businesses, but it will take long time before we will see significant impact.

Knowing all that, nevertheless, does not prevent recruiters and HR managers from asking you point blank, "Why you have been out of work for such a long time?"  They know why.  They ask because they want to see how you handle the question.  Your ability to present yourself in the best light during an interview and explain the employment gap on your resume in the most appealing way is a very sensitive issue.

That is why I highly recommend that everyone, even those who are not actively looking at the moment, read The Ladders' article Why Have You Been out of Work So Long?

I don't always agree with their material, but what I like about The Ladders' advice pieces is that they give us the point of view of the hiring professionals, the very people on the other side of the table.   Those on the job market need to cater to their expectations and their mind-set.  This particular article has the most straight-forward advice on the employment gap issue I have ever seen.

I have to say, however, that almost until the end they got me worried because it seemed that the article practically recommended to make up a story to fill the gap: say whatever,  except that you were just looking for a job.  Only in the last paragraph the actual activities are implied.

And I would like to elaborate on that.  Please, don't make up stories – you never know where that may lead you.  Nobody looks for a job for 12 hours every day.  So, use your spare time to occupy yourself with one of those recommended activities, and then you can tell people about them.  Even if you buy a SOX manual and study it on your own, you can say that you have significantly expanded your internal control compliance horizons.


              

The Frustrated CFO Plays the Identity Game


Well, not exactly – rather we shall play a slightly modified version.  Instead of matching different profiles to people, I will provide just one set of characteristics and a multiple choice to pick a correct answer at the end.  Ookey-dookey, here we go!

This financial being…

  1. Never produces/makes enough to support himself/itself  and his/its dependents.
  2.  Yet, it habitually spends more than he/she/it can afford.
  3. To sustain his/its spending habit it constantly takes money from others – people and institutions.
  4. When the time comes to fulfill payment promises he/it gets money from another place and pays the old outstanding amounts, thus replacing the old obligation with the new ones.
  5. To keep appearances and convince everyone that  everything is fine, he/it acts very confident, as if he/it is on the top of the world and his/its own dealings are in perfect state.
  6. In the process of such activities, he/it pulls into this bullshit game everyone who depends on him/it, exposing them to the future financial problems.
  7. Eventually he/it runs out of places and people to take money from – some or all obligations remain unfulfilled.
  8. As a result, the entity looses his/its official and unofficial creditability and has to suffer punishment and/or public humiliation.
  9. When that happens, the entity acts as if it does not understand why it happened and claims it to be a misunderstanding on the part of those responsible for punishment.
  10. Of course, those related to the entity, whether formally or informally, closely or remotely, directly or indirectly, all get hurt.
  11. Under the new conditions, it is even more difficult for the entity to survive; the game of obligations replacement becomes more and more expensive, further deteriorating the financial situation.
  12. Yet, he/it tries to put on a smiling face, hiding from the rest of the world that the worst is yet to come and that a complete bankruptcy and collapse are just around the corner.

Who or what is this financial being?  Please select the correct answer:

A.  A credit card junkie

B.  A Ponzi-schemer, such as Bernie Madoff

C.  US Treasury

D.  All of the above. 

 


Everyone Loves Lucy


Images-1 Last week Lucille Ball would have turned 100 years old.  Not every celebrity achieves the level of popularity that justifies posthumous birthday announcements, and I am glad that it applies to this great comedienne, who entertained people for so many years.   (As a side note, I must mention that it is a testimony to our electronic dependency that Google doodles have become integral parts of establishing people's immortality – I love them too, by the way.)

And I love Lucy, who also undeniably belongs in this blog as a brilliant businesswoman – one of the most powerful Hollywood women of all times. 

The business success started with Desi's shrewd decision of setting up a television company Desilu (with Lucy's effigy right there in the logo), equally owned by the spouses and responsible for production of not just I Love Lucy, but also Star Trek, The Andy Griffith Show, Mission:Impossible, The Lucy Show, Our Miss Brooks, The Jack Benny Program, and many others.  Only three years into its existence, the company was considered such a powerful television presence that it became a natural choice of  many consumer product conglomerates, including Phillip Morris, for production of high quality TV advertisement.

Desilu was one of the first entertainment companies to recognize a power of merchandising – an entire line of I Love Lucy products, from pajamas and dolls to furniture sets, was a tremendous success.  In 1954 alone they brought a net profits of $500,000 (over $4 million in today's money).  After purchasing RKO's facilities, Desilu Productions has become the largest studio in Hollywood, running 33 sound stages (more than either MGM or Twentieth Century Fox).  When Lucy bought Desi out in 1962, she became the first female head of a major studio.

I've seen different numbers estimating Lucy's worth at the time of her death in 1989, wildly ranging between $25 million and $65 billion.  It does not really matter.  One thing we can say for sure – she did well for herself. 

Many biographers, TV historians, and ardent fans, have been arguing for decades, about whose contribution was most important in Lucille Ball and Desi Arnaz's financial success.  While Desi did present the company as a President, we may never know whose idea it was was to do this or that deal.  Without a doubt, Lucy was always a bankable asset.  Moreover, it is a known fact that the artistic merits and public appeal of such long-lived franchises as Star Trek and Mission: Impossible, that still continue spawning new feature movies, were evaluated and approved by her personally.  

But the most remarkable lesson in Lucille Ball's shrewdness as a business woman comes from a very personal matter.  Many enterprises fall apart on account of minor tiffs between unrelated partners.  Lucy and Desi Arnaz stuck together through marital problems for a long time and got a divorce only after the final episode of Lucy-Desi Comedy Hour was filmed.  Moreover, they managed their business separation in the most civilized and mutually-beneficial manner, remaining friends for the rest of their lives. 

 

New CFO’s Essential Knowledge Prerequisites


When you start as a CFO, the first thing to do is to get your bearings – to assess your position relative to your surroundings.  As quickly as you can you must grasp general ideas about typical characteristics of your environment, your own role and purpose, expectations of others, as well as primary routes for channeling your talents and efforts.  But as soon as you are done with that, comes the time to get down to the level of firsthand details and study the specific aspects of the business.   You need to draw a detailed map that will help you on your journey as a financial leader.

This is a mandatory activity for a recently hired head of finance, new to the company.  It is a good idea for someone who has been with the company for a while in a lower position and just been promoted – new vantage point may provide you with the better vision of your company.  Even if you’ve held the top post for a few years, but never got around to do this and feel that incomplete picture prevents you from excelling, maybe now is a good time to go back to the drawing board.

This is your R&D stage, necessary for proper functional design.  Your research will help you to improve future performance.  Every CFO and controller must acquire an exhaustive understanding of his employer’s business. There is no doubt, that compilation of, what I call, the big picture is the key element in your strategic responsibilities. However, it is just as important for day-to-day hands-on management.  In the absence of thorough knowledge of all operational and organizational features, it is impossible to construct budgets, define tasks, or determine reporting requirements.

At the very least, your information-gathering activities should be focused in the following four areas:

Study of Corporate Structure

Economic complexity pushes businesses into multiple levels of diversification – wider product ranges, additional services, new geographical and demographic markets, related industries, outsourcing, foreign productions, etc, etc.  As companies pave new ways, their corporate structures adapt accordingly: branches are created, subsidiaries are formed, and satellite offices are opened.  Today, a $10 million service company may turned out to be a surprisingly complicated organism.  This affects nearly every accounting and financial function: local taxation, inter-company transactions, principles of consolidation, financial statements disclosures, banking facilities – just to name a few.

Study of Operational Flow and Value Chain

During your orientation stage this study has immediate practical applications.  It is a prerequisite to identifying accounting cycles, classifying assets and liabilities, pinpointing cost centers, determining analytical and financing needs, etc., etc.  There are transactions happening at every stage of the operational flow that give rise to accounting events.  Without full comprehension of the value chain you run a danger of oversights and errors.

Study of Organizational Chart and Functional Distribution

If the previous section is about processes, in this one we survey people and their positions.  I don’t have to convince anybody that it is important to figure out the chain of command and designation of responsibilities within your employer’s organization – you just need to know who’s who.  It goes beyond just knowing your peers with whom you discuss company-wide issues and inter-departmental relationships.  You have to know people along the value chain – those, who are in charge of cost and profit centers, have relationships with suppliers, vendors and customers, maintain your facilities and receive your mail.   

Study of Existing Policies and Procedures

If you became a CFO or a controller in a company that already has policies in writing and documented procedures in place, even if they are deficient, consider yourself very lucky.  You can study the existing papers, outline blind spots and pinpoint weak or erroneous steps. It is easier to enforce changes, if employees are already comfortable with an idea of adhering to a recorded set of rules.

On the other hand, you must be prepared to deal with a complete lack of anything in writing.  Important thing to remember is that it does not mean policies and procedures don’t exist.  They are there like an oral folklore of an ancient tribe, passed from generation to generation.  It would be a big mistake just to ignore the traditions and try to impose a new order.  You have to uncover and learn them first.   

Excerpted from my forthcoming book "CFO Techniques: A Hands-on Guide to Keeping Your Business Solvent and Successful" (Apress, December 2011)

CFO’s Performance Focus


I frequently talk about psychological trends and general attitude patterns in a broad sort of sense.  Yes, large groups of people share similar traits due to comparability of their backgrounds, environments, occupational qualifications, etc.  The very reason I write for the audience of financial professionals is because I believe that our experiences have common points and the topics would be understood and accepted; that our expert qualities unite us; that metaphorically speaking we all "have been in each other shoes."  I write about our bosses, small business owners, entrepreneurs as a group of people with very strong and easily recognizable idiosyncrasies.  But I never go too far with it.  I acknowledge and value individuality and uniqueness of each person and each situation.  That is why sometimes I describe experiences of specific people, including my own.

This separates me from organizational behaviorists, especially those who popularize their science for digestion by the masses.  In their zealous attempt to fit the entire universe into a simplistic, easily explainable system, they go as far as dividing everything and everyone into 3-4 categories.  And so, they manage to divide all possible motivations, intentions and impulses that guide employees' task performance focus, into just four categories (they even claim that it applies to "any given situation"):

(1) getting the job finished, which supposedly results in speeding up, being aggressive, and careless;

(2) getting the job right, which translates, according to this theory, into nearly OCD-ish fear of making a mistake and slows people down – they are just checking and re-checking everything over and over again;

Note that these two categories are placed on the opposite sides of the matrix.

(3) get along with people – I cannot offer any comments on this motivation nor its behavioral interpretations.  Honestly, I don't know what the hell is that all about;

(4) be appreciated – Ah, this one all executives understand very well, that's what we strive for.   But why is it associated with "being heard, being assertive, contribute to others;" moreover, why is it separated from 1 and/or 2?

This is laughable!  I don't know what kind of subject group the scientists studied to draw these conclusions.   Maybe these are just empirical deductions.  Then, how many personal observations were accumulated to form these opinions?  One thing I can say for sure  – they are definitely not based on hard-working financial professionals like us – CFOs, Controllers, VPs of small and mid-size businesses. There is no possibility for us of separating "getting it done" and "getting it right."  You don't become a CFO by accomplishing either one or another. 

And it has nothing to do with the time frame, as some suggest.  Other humans maybe can switch between the two, depending on how much time they have on their hands.  Us?  We live under constant pressure to get everything done yesterday and there is no room for errors.  Of course, the good news is that if you are for real, if your expertise is not phony, if you got where you are through hard work and exceptional abilities, you cannot do it any other way.  Your qualities and professionalism carry you through and that how you get to be appreciated.  All at the same time!