Category: Business

Funny Thing Happened On the Way to Ohio, or That Picture of Your Boss You Posted on facebook


UntitledI've said it before and I'll say it again: all entrepreneurial bosses are the same.  Of course, I don't mean it literally – they are not stamped figurines.  Yes, they are the same in their principal qualities (aggressiveness, single-mindedness, drive, vision, impatience, arrogance, callousness, etc.), but they are also different people with their own psychological makeups,  individual quirks, and human peculiarities.  Some can be informal and approachable, others are aloof and snobbish.  Some can be intellectuals, while others are simple and limited.  Some of them are religious conservatives, others are broad-minded libertarians.  Some are healthy and others suffer from an array of ailments.  Some like spicy food and others cannot stand a hint of curry or garlic in the air.

There is one universally common denominator that definitely unites all business owners, though - they are employers.  And as I wrote in CFO Techniques, one should never cross the line with one's employer, if for no other reason than in appreciation for creating one's job.

So, here is a little anecdote that involves a sociable female business owner, her all-male sales staff, and some spicy food. 

First, let me clarify one thing.  This woman, tough as nails and brutal in her nature, nevertheless strives to present a friendly and cheerful demeanor to the outside world.  Experienced people can see through that veneer and know to watch their steps around her.  However, when you get together eight men, even though subordinate, and one woman, even though a boss, the dynamic gets a little muddled.  I mean, when they are in a gaggle, it's especially difficult for men to suppress the testosterone.  It clouds their judgement and they forget for a hot second what's behind that charming smile. 

Oh, yes, and about the food: she really does like it hot.  You'd be in a restaurant with her, she orders a dish and then asks the waiter, "Is it spicy?"  The waiter smirks, probably thinking, "That skinny bitch will be asking now to make it mild," and answers, "Yes, ma'am, it's very spicy."  And she goes, "Could you, please, ask the chef to make it spicier." (Sometimes I actually consider of giving her a present of Pure Capsaicin Crystals, but I know she's going to try them and I don't want to be responsible for the consequences.)

Back in December, she held a three-day sales summit in the company's NYC headquarters – all salesmen came over from their different locations.  This usually means breakfasts, lunches, and dinners together.  Thankfully, in NYC that's not a problem.  The team enjoyed French-Asian fusion, classic American steakhouse, Korean…  An Italian restaurant is always a must, since the sales person with the most seniority comes from a Bolognese family. 

Unfortunately for the boss-lady, Italian food doesn't offer too many possibilities for extra-spicy.  She orders Shrimp Fra Diavolo over linguine, but it's not doing the job.  Red pepper flakes are asked for and happily received.  She starts shaking the plastic thing over her plate and orangy-red bits sparingly drip out (there is a reason the container is designed this way – one must use the hot stuff with a caution).  That's not enough for her – she starts shaking harder and harder…  until the top flies off and most of the pepper from the bottle ends up in the sauce.  All the men at the table are laughing their heads off – the boss slipped up!  Maitre d' sees it (how can you not, with all that violent shaking?) and immediately runs over, offering to replace the dish.  The lady refuses and laughs lightheartedly with her "boys" about her clumsiness.  She removes some of the pepper excess onto her bread plate and proceeds to eat what, I imagine, is an unbelievably spicy pasta without breaking a sweat.

Six weeks later, the same group of people is on the road visiting their Rust Belt customers.  They started in Pennsylvania and are now on their way to Ohio.  I'm sure my readers understand that the food scene in the industrial towns of Western PA is not quite the same as it is in NYC.  Here you go for Italian because it's probably your best choice.  So, there they are again with dishes that vaguely correspond to the Italian names on the menu.  This time around the owner's sauce is not spicy at all, but the generic plastic bottle with red pepper flakes is already on the table.  She reaches for it and the shaking ensues.  The memory of the NYC debacle is too fresh for the boys not to bring it up: "Be careful, don't shake the top off," a few of them warn.

Let me step aside for a second: Just as the bosses' human qualities differ, so are the ones of the subordinates.  A couple of them are of the self-conscious type – they simply don't want to be inside a public spectacle again.  Others are genuinely concerned about her not spoiling her food.  Yet, there are always those resentful, passive-aggressive employees, who secretly cherish the idea of a boss making a fool of him/herself.  One of those had his iPhone at the ready.

Well, as you probably guessed, the container's top comes flying again and a half of the red pepper flakes ends up on the pasta.  Oh, the childish hilarity!  Everybody laughs – some wholeheartedly, some to cover up the awkwardness.  The prepared dude snaps the picture and immediately posts it on facebook.

A young salesman who told me about the repeat performance of the pepper flakes show was visibly hesitant and uncomfortable with the whole facebook posting part.  I was simply appalled at the disrespect.  And what about the owner/CEO herself?  Did she fire that rude fucker?  Of course not.  The emotions should not interfere with business - it's impossible to replace a high-caliber sales exec overnight.  But I know this woman very well.  She's never going to let it go.  You can see it in her unsmiling eyes when she laughs about the whole thing.  She is on the lookout: as soon as she finds someone else, the insolent fool will be gone.  She will not even flinch; just like she doesn't flinch from the spiciness of her food.

CFO Folklore: A Male Applicant with a Banker’s Resume? No, Thank You.


Banker---_2253484b Sometimes when you open a certain topic, it becomes hard to move on to the next one.  So, again about bankers and genders…

When we hear the word "discrimination," the first thought that comes to our mind is "unfair."  Indeed, in it's most common definition of the last 150 years, discrimination is understood to be an unfairly different treatment of a specific group of people.  We think: race, ethnicity, gender, social class, origin, sexual orientation, wealth, etc.  This is the type of discrimination that I just fucking hate.  And I am not saying this to be politically correct: I truly am a serious opponent of an inequality based on anything other than talent and merit (please keep this in mind as you read on).

People forget, though, that the word "discrimination" has a much older meaning and can be defined generally as a "recognition and understanding of the difference between one thing and another;" frequently even more specific: "the ability to discern what is of high quality."  Truth be told, under this definition I have discriminating tastes – in many things, but especially when it comes to judgments of people.  Particularly, when I have to act as a hiring manager.  

I discriminate against dullness, stupidity, and narrow-mindedness.  I've mentioned it many times in this blog's posts and I spelled it out in the Human Resources section of CFO Techniques: what I really look for in the eyes of a job applicant is a sparkle of intelligence. 

Because of that, I find myself discriminating against a very specific group of people, namely men with a banking background.  I try to refrain from generalizing – it could be my own unfortunate experience with this occupation, but, from my point of view, it is largely populated by male bankers who are limited, slow, and intellectually lazy.

Nowadays, the term "banking" signifies so many different things – every major institution dabbles in several "satellite" industries: investment banking, all sorts of trading brokerage, insurance, etc., etc.  So, to avoid the confusion let me clarify that I'm talking about the plain old conventional bankers, whose job is to keep the excess of your funds in their "vaults" and to sell you money when your needs exceed your availability.  These are your commercial loan officers, relationship managers (RMs), business development VPs.

And, of course, these are primarily men, who are not motivated to rise above their genotype.  Why should they?  They've got the upper hand by default. Women must claw themselves into the tight boy's club.  If they succeed in doing so, they are not only eager to do a good job, they also move to the more sophisticated areas and specialties: treasury management, foreign exchange, trade finance operations, investment banking, etc.

Back in the day I used to blame the inertia of male bankers on liquid lunches: 20-25 years ago they literally worked from 9 am to 12 pm in the office.  Then they would go out for lunches, with clients or with each other, order martinis, and from that moment on the drinking wouldn't stop until evening.  Being intoxicated obviously doesn't make anybody more alert, expedient, or add urgency to one's attitude.  But this banking trait was squashed long time ago – the liquid lunches went away, yet the quality of work remained the same.  Maybe they stopped drinking on the job, but the productive hours remained the same - and it's just so much you can do between 9 and 12.  But are they awake even during those three hours?  

I went with one of my clients (a wiry, fast-talking businessman, who still wins sprinting competitions in his age category) to a meeting with his RM from PNC Bank.  I swear to God, this banker exceeded even my expectations: he epitomized the idea of an "empty space" and he seemed to be half-asleep.  I got a distinct impression that whatever we were saying to him literally entered his left ear and immediately flew out of the right one.  After the meeting I tried to warn my client – I said, "Your Credit Agreement just started.  Before it's too late, please try to ask for the RM's replacement.  You will not be able to work with this guy.  You are going to hate him."  He didn't think that he needed to bother with such "trifle things."  Now, two years later, at least once a week I hear, "Oh, my God!  I cannot stand that guy!  I cannot deal with him – it's like he is in a coma." 

Coma!  That's even worth than half or fully asleep!  Yet, it is true.  I always complain about the lack of urgency in the majority of workforce everywhere, but for this group of institutional employees it's an epidemic.  Here is something from an email exchange between my other client and his RM (with copy to me):  "We initiated this matter with you last summer, almost 6 month ago, and it is mind boggling to me that you could write today that you 'are still in process of writing up the formal approval.'  Ironically, the only related matter for which the bank had no hesitation to proceed post-haste was to deduct legal fees that appear unjustifiable from our account."  Do you sense the level of frustration? 

But lethargy is not even the worst of their traits.  Sometimes I wonder if these people are specifically picked to be so, for the lack of a better word, unimaginative.  I was talking to this one banker recently about his client, explaining how important it is for the company, which deals in bulk liquids, to lease tanks near Georgian ports: when a shipment arrives a hose can be hooked directly from the tank to the vessel and the product can be pumped out at a minimal cost.  A couple of days later he writes to me: "I remember you said they had a tank in Atlanta…"  Atlanta?  I laughed out loud.  It's fucking 250 miles inland!  Some hose would that be!  On the other hand, he is a banker in NYC – Atlanta is probably the only city in Georgia he remembers from his geography classes.      

It couldn't possibly have always been like that.  In the old times conventional banking was entrepreneurial, risky, dangerous business.  A banker who took your money into his safe kept his gun in the holster under the jacket at all times and used his shrewdness and guts in determining whether you worth a loan or not.  And yes, he would hire a meek dude for the back to count money and keep books.  And that guy needed to be meek, so that he would be too afraid to steal.  But even that quiet mouse had to be nimble with his fingers to count money and he had to have quick reflexes to be able to duck for safety when the shooting ensued.      

That's it, isn't it?  It's the cancerous growth of the banking business into these giant monsters that we, corporate financial executives, are forced to deal with now.  They are too fucking big and they need to fill all the seats, so they hire entry levels straight out of colleges (out of specific colleges on their specific lists) as long as they meet the GPA and internships criteria.  And nobody is looking into their eyes: are there any sparks, or they are just good at memorizing textbooks for a hot second and taking tests?  After that it's a hit-or-miss game: the brightest go for stars and big money, but more routine tasks go to the dullest contingent.  And they do that for years: sitting in the same positions, performing the same limited tasks; without the necessity to develop new skills or mental abilities; slowly crawling up the long ladder according to their tenure, never reaching real intellectual heights before their retirements.

It seems, however, that some of the more entrepreneurial banks have finally started realizing that they are being drowned by the incapable, half-asleep, idiots, and they are trying to correct the situation.  As I said in my February 20th post, the number of women in the relationship management is increasing exponentially, and I just met two people who came into institutional finance from M&A.  Well, good for the banks then.  But if they don't want to hire (or keep) the industry-grown nincompoops, why should I? 

Executive Gender Equality: The Perversity of Admiration


ImagesCALEGCPEEver since this company made into a couple of 2013 national lists of the fastest growing entities, we have been accosted by a slew of various business services offering their assistance and support: insurance brokers, real estate brokers, HR management providers, marketing consultants, etc., and most notably for me – bankers. 

The troubles that befell the banking industry a few years back resulted in its consolidation.  The competition among the diminished number of the key players in the field of institutional finance has stiffened.  They are fighting for clients with proven records of steady profitability, growing equity, and assets with high market liquidity, which, of course, are not that easy to find in our "recovering" economy.  Hence, they are after our business.

All the better for us: We are approaching the expiration date of the credit agreement with our current lender and are looking for a relationship that would be a more suitable match to the fast-growing company.  So, I'm doing what I've done quite a few times throughout my career: I'm meeting with a lot of bankers – explaining the business, answering their drilling questions, providing them with extensive data, spinning the info in the most thrilling way. 

While all this is going on, I cannot help but notice the increased percentage of women in the banking mix.  Well, that shouldn't be surprising, actually: according to many statistical reviews, more than 50% of the corporate middle management in this country are presently females.  I hear from our own sales staff that purchase managers of our customers' (industrial sector, by the way) are predominately highly technical women in their 30s.

Of course, as we climb further up the ladder, the numbers diminish: men dominate upper management to the extend of 70-80%, and only 10% of the C-level executives are women.  Still, I used to be the only "skirt" in a room full of male execs and financiers.  Now, there is a female contingent on the opposite side of the table in 3 out of 4 meetings.  Hell, the founder/CEO of this company is a woman.  Hence, our board of directors is 50% female (her and I) – we are the tough side of the directorship.   

So, here I am in our conference room listening to two representatives from one of the 10 largest banks in the world, who are making a presentation of their proposal (aka a Term Sheet in business dealings).  One of them is a diminutive woman of Korean origin in her late 50s – she is the boss, the North-East Regional Director, a big gun brought on to get the deal closer to the finish line.  With her is one of her many subordinates – a young and ambitious man in his early 30s.  If I end up choosing this bank, I will get him as my Relationship Manager (RM).

The menagerie is balanced by a man at my side – COO/owner/our CEO's whity husband.  He has his full charm on: he cannot help it – he has a soft spot for Pacific-Asian women.  Now he admiringly "complements" the banker-lady for being deceptively tough, i.e. looking pretty and soft, while being steely behind her eyes.  I tense up: here goes seclusive male chauvinism, and you never know how a woman will react to it. 

She handles it beautifully, though:  "Well, you know how it is – brain and beauty combined are lethal."  She turns to me: "Right?"  Well, I wouldn't know – never got a chance to rely on no beauty, just my brain.  But I don't say that.  I just smile. 

I wish my COO would do the same, but he somehow takes it as an invitation for further "admiring."  "Yes, you are absolutely right.  I couldn't put it better myself," and he embarks on telling the bankers how his wife, our CEO, is especially successful in sales because she is a woman who can speak "sweetly on the phone."  He actually uses those words.  "It used to take me," he says, "four phone calls before Dow Chemical would call me back.  But she  sweetly leaves a voice mail and they return her call within 5 minutes!"

He is absolutely overjoyed with pride.  The Korean lady's mouth gets very thin and she looks at me again -we both know: this is how it is.  The men will always find the way to treat us as if we were inferior, whether through insults or with "compliments."

I am disgusted, but I'm willing to dismiss this on the principle "forgive them, for they know not what they do."  And right then he turns his head to me, looks straight into my eyes, and says, "You cannot repeat it outside of this room.  L. always gets very upset when I say this, even though I mean it as a good thing."

Seriously, dude?  You've been warned about it before?  By your wife, who is also your boss?  And what?  You cannot help yourself?  Of course, you cannot, because it's written into your genetic code, like a primal instinct.  And you are too insecure to consciously fight it off!  If it was me…  But she is not me, in many ways she is very different.  And that's why he'd financed this business for her.     

Snippets from a Corporate Party: Disappearance of Secure Professions


Poor-doctorThe Frustrated CFO goes to a corporate party and during cocktails mingles with bankers, all kinds of brokers, execs from various industries, business owners, etc.  Everyone exchanges cards, handshakes, hugs, or cheek-pecks depending on the length and the warmth of the relationships.  Some people talk shop, some solicit business and/or advice, some boast about themselves and/or their children, some discuss the Super Bowl without much enthusiasm (it's NYC after all – we only got excited when we saw our very own Eli Manning in the stands watching the event turning miserably for his brother).  Many, of course, discuss the weather – it has been an appropriately cold winter, which makes the clueless schmucks unhappy.

The Frustrated CFO does her duty of actively participating in this business-social hubbub.  She doesn't even have her cards out, because in this room everyone knows her and she knows everyone.  This is great – no pressure, no awkwardness, no need for ice-breaking: she freely rotates herself around the space joining a conversation here and there, mostly listening to others chattering away. 

The party is not very large – just 60 people.  So, it is a testimony to the prevalence of the trend that  she catches two independent dialogues, which support one of her it's-only-gonna-get-worth observations: that there is no such thing anymore as a "secure" profession.

A VP of Acquisition and Investment from a Commercial Real Estate Brokerage humorously tells a story how at a recent RE conference she met a middle-aged gentlemen with a double-sided business card.  One side introduced him as a licensed commercial property broker and another… as a cardiologist.  He told her that he'd been a practicing heart specialist for 25 years before getting into selling corner delis, Korean restaurants, and warehouses.  People didn't know how to react and, therefore, they snickered – a typical response.  Someone said, "I wouldn't trust that guy with my heart."

Well, I've been saying for some time now that HMO's together with malpractice insurers did a pretty thorough job of downgrading the medical profession from one of the highest-earning trades to a regular struggling-to-survive occupation.  This is why it's so hard to find a good primary physician nowadays: the insurance pays $8-$25 monthly allowance for PP patients and the only appointment you are allowed to bill to the provider is the annual full physical.  Every single privately practicing doctor that I know, including specialists, feels obligated to tell me how he is about to lose everything and how he cannot afford his kids' tuition anymore.  But I have to be honest: A cardiologist going into real estate?  That was surprising even to me.               

In another conversation The Frustrated CFO's corporate attorney was explaining how they had to push one of the partners out because "he wasn't bringing enough business."  His arrangement gave him rights to share in the combined profits, while the other partners didn't feel that he was pulling his weight.  So, they simply didn't renew his contract.  Now, the attorney said, the ousted ex-partner went to work for a law firm that kept all attorneys strictly on the eat-what-you-kill basis.  No more sharing in each other's efforts – if you don't bring any business on your own, you don't earn anything at all. 

Well, this has been a shift in many partnership-based professions: not just law firms, but also accounting, managerial consulting, architecture & design, web development, advertising, and some-such companies.  It's not that important anymore whether you are a good lawyer – it's all about the salesmanship, the "rolodex," the ability to snatch a new client.  I keep waiting for the time when these entities start hiring sales execs without the required professional backgrounds and pay them humongous bonuses for selling services fulfilled by someone else.  

As recently as 10 years ago parents still thought that as long as they force their children into being a doctor, a lawyer, an engineer, or a money manager (regardless of the kids' actual talents and dreams), they did their "duty" of making sure that these young men and women were financially comfortable and could provide for themselves and their future families.  But it's not true anymore: there are no more cushy jobs, no security in any profession, no guarantees. 

Quote of the Week: Obama’s Next Move Towards Socialism


Obama_0c245_image_1024w1-300x200From CNN's Breaking News:

"EXCLUSIVE: President Barack Obama told CNN's Jake Tapper on Thursday that some of the country's largest corporations have signed on to a White House plan to boost the hiring of the long-term unemployed.

'What we have done is to gather together 300 companies, just to start with, including some of the top 50 companies in the country, companies like Walmart, and Apple, Ford and others, to say: Let's establish best practices,' Obama said in the exclusive interview…

Obama's move is in line with his pledge to use executive action on his agenda items that he hasn't been able to get through Congress."

The Frustrated CFO Comment:

Alrighty then!  So, this is how we are going to deal with overpopulation and economic stagnation:  Instead of cutting down government spendings, ceasing the preposterous fueling of the financial sector, ending the subsidies to failing industries, letting the stock market to finally adjust to its real value, providing incentives to domestic manufacturers for repatriating their productions from overseas, and reducing business taxes in order to reignite small-business growth, the President proposes to create a new form of Welfare, i.e. to force big-time employers to absorb long-term unemployed people - in exchange for some tax credits, no doubt. 

Hmm…  Not that I'm concerned for the overgrown business superpowers with their blown out of proportion stock values and unjustifiable multi-million-dollar executive salaries, but if they don't experience a labor-force deficit, why would they accept extra employees?  That goes against every single principle of a market economy, even in its degenerative form we have right now!  And where they are going to employ them?  Walmart is planning on opening more super-stores?  They are everywhere already.  So is Apple.  And Ford?  Do you mean Ford Motor Company, the one that posts $5-$6 billion losses every year; the one in Detroit – the city declared bankrupt by US judge Stephen Rhodes two month ago?  You must be kidding!  

And how these companies are going to pay these people?  I can't imagine the execs will let their ballooned compensations to be slashed by 80%.  So, what then?  Everybody, except for a handful of the privileged, will take the same percentage cut to accommodate the unnecessary additions?  Let's make most people equally poor, so that everyone can be "employed" and  bring home something?  Wait a minute!   Didn't somebody already tried this experiment?  Oh, yes, communists in the socialist camp did!  Worked like a charm: destroyed their economies and created hordes of lazy, unmotivated, and unskilled workers!  Welcome to your future, people, courtesy of your elected leader!