I highly recommend this yesterday's post from HR Capitalist. His behavioral insights are applicable to everyone in a senior management position, including all CFOs, Controllers and other financial professionals.
Category: Business
Remote Boss: CFOs & Controllers’ Dream
Don't get me wrong, I don't like global generalizations. There is nothing wrong with logical patterns and trends, but it doesn't mean that they encompass ALL people and ALL situations. So, when I talk about, for example, entrepreneurs or financial execs in general terms I don't mean "every single one." I mean, the majority of the group. The majority of entrepreneurs are brilliant, but some of them are just lucky. The majority of small business CFO's are pedants, but some of them are slobs, and so on.
There are entrepreneurs who are very conscious of their breed's tendencies to squash and frustrate their subordinate execs. They go out of the way to engage in counter-measures and employ the best of managerial techniques. Therefore, there are CFO's out there who truly enjoy constant interactions with their CEO's. Throughout my career I myself have experienced long stretches of time when my boss's personal traveling seemed like a disruption in the work flow, occasional frustration notwithstanding.
However, even those who enjoy the most amicable of relationships, cannot deny that they feel more relaxed and efficient, less frustrated doing their jobs, when the bosses are away, or when financial execs are traveling on business themselves.
Thus, my correspondent J. has the best job in the world. It was not set out to be such a fortunate arrangement, but various factors played their roles in shaping the way things are right now. J, who is an asset-based finance specialist, works by herself on the East Coast, running all operational and administrative functions of a small but very profitable private equity fund, while the founding partners are based on the West Coast.
On an average day J. is in the office by herself, doing her job in completely undisturbed environment. And she is one of the most balanced and upbeat persons I've ever met altogether, let alone the financial professionals.
She speaks to one of the partners only on the rarest occasions, when there is something wrong with one or another investment. The other partner is more hands on: he is responsible for due diligence process of all portfolio prospects. He also comes to the East Coast office once a quarter when their lender's audit is finalized to have a wrap-up lunch with J. and the lender's representative.
A perfect dream set up. How do I know? Because J. is never frustrated with her bosses. I tell her, "It would not be the same, if they were here in the same office with you." And she agrees – it wouldn't.
The Importance of Prioritization for CFOs & Controllers
My very first post CFO's and Controllers' Many Hats addressed (in two parts, as the matter of fact) the inescapable issue of overwhelming span of functional control tackled by all financial execs. The issue has been described as a major source of both frustration and pride.
Well, whether you are proud or not of being a natural choice for a million of high-level responsibilities, keeping all balls in the air is a managerial skill mandatory not only for your professional success, but for taming the frustration as well.
Both mathematical rules of optimization and circus performances teach us that there is a limit to the number of items you can juggle at the same time without dropping them. This is why Prioritization and Delegation are two most important organizational tools for a Controller or CFO.
Let me share with you my own Top Three Rules for each of these tools.
Prioritization:
Rule #1. Assign priority scores to each task. Let's say, 1 to 10 with one being the lowest. The highest priority on your list should always be given to the task that in a long run will benefit the bottom line the most. For example, writing an angry answer to your boss's email asking whether you are busy right now has lower priority (I would say, 2) than looking at your cash position and deciding whether you need to use your credit line or cash availability to finance today's operational expenses (definitely a 10).
Rule #2. As much as you can, try to block certain time periods with periodic tasks of high priority in advance. There are such things as SEC reports, monthly budgets, weekly cash flow projections, etc. etc. that occur periodically. Prevent yourself from cramming at the last moment by assigning priority scores and scheduling these tasks ahead of time.
Rule #3. If you work in a privately held business (and most small and mid-size companies are) and report directly to the Owner/President/CEO, be ready to push his/hers priority higher up on your list. I know it sounds almost psychotic, but being flexible when it comes to your boss's requests sometimes can save you the boatload of frustration. However, it does not mean that you have to drop everything and attend to his needs. Many people make that mistake. Instead, you need to provide him with reasonable time frame and explain why the task at hand is more important for HIS BUSINESS. I will get back to the issue of flexibility in scheduling discussion.
Delegation:
Rule #1. Don't be afraid to delegate important functions to capable subordinates because you are afraid that they will undercut you. First of all, if you are a good match for your position and do your job to the best of your abilities, you should be confident. Secondly, by overwhelming yourself with extra tasks you diminish your own efficiency and undermine yourself.
Rule #2. NEVER do your subordinate's job because you believe that you can do it faster and better. This is a bad mistake many of us make. When we do that, we damage ourselves in two ways: by wasting our own valuable time and by not letting our subordinates to improve and develop.
Rule #3. Always make time for training and advancement of your subordinates. By building strong and reliable accounting/finance staff you better your own chances for success .
Honestly, it took me a while to develop and even longer to start implementing these rules, but I can vouch for their effectiveness.
Further Scientific Evidence of the Entrepreneurial Bug
Over a month ago, in my post Your Boss: Value & Madness of an Entrepreneur I wrote about quirkiness and impatience of people who have brilliance to come up with original start-up ideas and guts to build a company from scratch – people who provide us, CFO's and Controllers, with new job opportunities beyond "Big Business."
I also discussed how their peculiar and difficult qualities are the main source of our frustrations. I called the sum of these character traits the Entrepreneurial Bug.
As if to support my point of view, September 18th issue of New York Times featured this article in their Business Day section – Just Manic Enough: Seeking Perfect Entrepreneurs by David Segal. I highly recommend that everyone interested in the subject of entrepreneurship, start-ups and venture capital investment should read it.
Of course, my own primary interest was the excursion into psychology of the indicators so characteristic of our bosses difficult behavior. Needless to say, the article confirms that not every subject is afflicted with the entire spectrum of symptoms and displays them with the same intensity. Nevertheless, the author clearly states that only "a thin line separates" an entrepreneur from a psychiatric candidate with a hypomanic syndrome.
One of the article's subjects, Seth Priebatsch, echoes my post from 08/19/2010, when he "describes anything that distracts him… even for minutes, as 'evil.'" No surprise here – I've heard this before many-many times from various CEO's. The difficulties of working with people like that on daily basis, especially for CFO's and Controllers, whose job is to keep businesses in order and under control, is basically one of the main themes of this blog.
Mr. Segal goes out of his way explaining that the degree of craziness is what matters: some Venture Capital firms give personality tests to their prospects in order to determine if they are not completely bonkers. But I couldn't help myself thinking that these tests may be also designed to weed out people who are not crazy enough to be satisfactory material for future transition from idea generators into screw tighteners.
Strangely enough, the New York Times' confirmation that my extrapolation of personal experience dealing with business owners to the rest of the entrepreneurial world is completely justified, did not bring any intellectual satisfaction. It's kind of discouraging that if you choose to build your career in dynamic growing businesses, you will always have to deal with bosses who cannot help themselves not to be assholes.
Business Owners’ Favorite Style of Management
Some people are born with incredible natural aptitude for managing people. Many years ago I observed a girl on a playground. She was about 5 years old playing with a group of children the same age. At one point some play rules, or another important issue, needed to be established, and I was amazed not only by the assertion of authority, but also by the uncanny logic exhibited by this extraordinary little person. She started with a commanding, "Children, listen to me!" and continued laying out a proposal that nobody has any inclination to dispute. I remember thinking to myself, "That's a naturally born leader!"
Unfortunately, people like that constitute a small percentage of general population and, strangely enough, they are even rarer among business owners. Just because someone had a great idea and entrepreneurial drive to establish their own business doesn't mean that they also have sufficient managerial aptitude. Only few of them had formal business management education and most of them never worked for anybody else long enough to gain on-the-job expertise.
This pretty much leaves their leadership skills at intuitive level at best. And if the sixth sense fails them… well, all kind of sad things occur: they cannot see the difference between a pompous phony with an impressive voice spewing well formulated lies and genuinely knowledgeable, but quiet workaholic; they have very little or no understanding of delegation of duties; frequently they cannot even figure out their own roles in the company.
The most common executive management conundrum such Presidents/CEO's (especially first generation of business ownership) encounter after the enterprise reaches the "established" stage of development can be described as follows. Their entrepreneurial talents draw their minds to further commercial improvements, to generation of new ideas that will help to expand and strengthen the business. At the same time, the wonderful feeling of accomplishment plays dirty tricks on them: subconsciously they want to rest on their laurels – they feel that they deserve to work less, to take summers off, etc. etc. Moreover, since the business is their child that they have born and reared applying their own talents and titanic efforts, they have incredible aversion to the idea of letting other people to completely take over vital tasks of the company's ongoing functionality and maintenance.
(Side note: I am really tempted to state here that the majority of them are control freaks. However, I don't have scientific evidence for that, just my own and my colleagues experience. More importantly, it does not make a difference, both obsessive and perfectly balanced CEO's display the same symptoms.)
You have to agree that this position is absolutely psychotic. What do they do? They resort to their favorite style of management – what I personally coined several years ago as "Hands-Off Micromanagement."
Let me show with this example how this control style may manifest itself. On one hand, the CEO can completely forget that you are working on establishing a $10 million credit line with a new bank, or that you have just upgraded your accounting system to a new version that basically made the entire budgeting function automatic. But on the other hand, he keeps asking without a fail every month why the Federal Express bill is $2,000 – when he was starting the business it was never more than $100.
I am sure a lot of my fellow CFO's and Controllers have recognized the disease as they have to deal with it and the frustration it causes on daily basis.
The Frustrated CFO 