Category: Movies, Entertainment & Media

CFO Folklore: “The Servant of Two Masters”


440940251img1_mediumTwo-headed bosses are common when people work for businesses founded by relatives, which, I am sure, can be a source of fascinating undercurrents and rivalries.  I invite my readers to share relevant stories.

I, on the other hand, worked (more than once) for equal partners who were not related.  Each of the duos consisted of individuals so different, it was a miracle they stayed in business together.  As a CFO, forced into the middle of the co-owners dynamics, I was able to observe common behavioral tendencies in the bosses themselves and people around them.

Business partners' alliances are usually symbiotic.  One is an idea generator, the other is an implementer.  One is brains, the other is money.  One can close a deal in seconds, the other makes sure the company performs.  They always complement each other, or they wouldn't be in the trenches together. 

Either will squeeze all juices out of you, and yet their personalities differ just as much as their abilities.  One is usually more diplomatic, better with people, logical, frugal.  The other is brash, careless, erratic, a lavish spender.  They don't see eye to eye about the majority of business issues and frequently talk to their CFO or Controller separately, presenting contradictory positions.

260 years ago, in "The Servant of Two Masters," Carlo Goldoni depicted the delirium of working for two employers who try to find each other without knowing they live in the same hotel.  Sounds familiar?  Poor Truffaldino is so anxious, he develops a stutter.  Imagine the hilarity!  Well, at least he got double wages.  When your single-salary job depends on maneuvering two conflicting bosses, you don't feel like laughing. 

Most people end up aligning themselves with one of them.  Sometimes, it works out in a natural way: if one owner oversees Production, while another spearheads Sales and Marketing, it is obvious where VP of Ops and VP of Sales allegiances will lie.  

Even when it's not clear-cut, people have a tendency to navigate with their issues toward the boss who is perceived to be "nicer," regardless of his preparedness to make relevant decisions.  As the result, you may end up with a wrong solution, or the issue is brought to the other owner's attention anyway; only now he knows that you tried to bypass him.   Either way, you are screwed.

CFOs and Controllers should not form any alliances when they work for two partners.  When monetary matters are concerned, both must be kept in the loop.  In super-important cases, get them into the same room, whether they like it or not.  I am known for bringing bosses into the office from their summer residencies in the middle of July, when I had to.

Of course, you have to earn your right to do so with hard work and authoritative success.  You also need to be very diplomatic with both of them – either must think you prefer deal with him and inform the other out of courtesy.  It takes Machiavellian skills to boss the bosses.  Otherwise, you will end up stuttering, like poor Truffaldino.

We Are All “Up in the Air”


MV5BMTI3MzYxMTA4NF5BMl5BanBnXkFtZTcwMDE4ODg3Mg@@._V1._SY317_ Back in the Fall of 2009, when "Up in the Air" was released, I didn't see it, but people told me I should have.  I watched it the other day.  Wow!  It is not just an excellent movie and the most realistic piece of American cinema I've seen since 2005.  It is also a gold mine of occupational themes that hit so close to home, it's unreal.  You know, the subtle truths about corporate existence, which are so familiar to those of us, who have been boiling in that soup their entire lives.  Thank you, Jason Reitman!

Our new economic reality of depressed businesses and desperate people serves as a recognizable background to the personal stories unfolding in front of us.  The uncertainty of survival in the contemporary corporate world is so pervasive, nobody knows what tomorrow shall bring.  "Living in the Now" is not a conscious choice of enlightened individuals anymore.  Whether a CFO or a receptionist, in companies large or small – every wage-dependent person lives one day at a time.

As the matter of fact, George Clooney's character, Ryan Bingham, is sent to large companies.  These companies can still afford to hire an outside firm to conduct the "separation" exercise for them, with fancy folders and severance packages. 

In small business environment, even during the best of times, you wouldn't think of spending money on protecting yourself from the brutal necessity of firing people with whom you worked side by side.  As a CFO/Controller, I've had my share of sitting across the table in a conference room, looking into a person's eyes and delivering the bad news.  I developed my own style as well: do it gently, make them feel better, give them hope…  Some even thank me at the end.  Just doing my job, like Ryan Bingham.

He, actually, works for a small company owned and managed by his boss (Jason Bateman), who (how typical!) changes his mind about the company's direction three times in a few depicted weeks.  Ingeniously, the filmmakers reduce smooth and dashing George Clooney to a powerless subordinate: his entire way of life is about to be changed by his boss's decision and there is nothing he can do about it.  "…Here's the boat?.. Do you want to be in the boat?"  You are either in or out.  You have no choice.  You swallow your pride and you go along.  Just doing your job.

What are we doing?  How do we go on and live with ourselves when we fire someone who is good at his job?  How do we sleep at night after dismissing hundreds of hopefuls' resumes?  And what happens when our own resumes get swept into trash?  Do people feel anything at all?  Those are our hopes that get dismantled.  Do we register the weight of what we do?  I don't know.

Everyone's life is up in the air, with no help coming.  Help ourselves? We can try to stay positive and continue struggling on – that's the best we can do.

 

“The Social Network”: A Case of a Failed CFO


Social_network_Andrew_Garfield_04 It's the Oscars week.  You cannot escape the promotional hype unless you cut yourself off from all media. 

The movie leading in the preliminary rounds (Golden Globes, various Guilds, etc.) is "The Social Network."   It's not surprising – the popularity of this movie is rooted in public's preoccupation with sudden success and overnight rise to riches.

Well, the reason for me to write about this film is that I cannot miss the opportunity to discuss a character, who in 2004 thought of himself as a CFO of Facebook. 

When Mark Zuckerberg appointed Eduardo Saverin to be his CFO, it was a logical step for the 20-year-old code-writing CEO.  Saverin was a close friend; appeared to be versed in business matters; more importantly, he had personal funds, having just made $300K through savvy oil investments.  Is this enough to make somebody an acting CFO?  Of course, not.  However, one could have learned how to be one.   It was not the case here.

If nothing else, the movie provides vivid illustrations to what a real CFO should NEVER-EVER DO.

1.  The first thing that Mr. Saverin did wrong was not taking his appointment seriously. He did not bother to define his role, his functions, his practical responsibilities.  If you are not creating the product itself, you should be doing other things that make you irreplaceable.

2.  When you accept CFO position, you become your CEO's partner.  That means you develop common vision, you define company's mission.  When it's finalized, you shove your disagreements aside and you do your best to facilitate the success on the chosen path.

3.  You NEVER separate from the company.  All experienced CFOs know that things can happen behind your back even if you seat in the next-door office.  If you are on the opposite coast and out of touch, consider yourself out.

4.  With startups, you should always try to utilize your company's growth potential to the fullest and then capitalize on it.  If Mr. Saverin wasn't so arrogant and argumentative, he most likely would realize that  online advertising brings real money only on a big scale.  Hence the right strategy was to look for more investors for the company growing with an astronomical speed.  Instead, he wasted his time setting up appointments with advertisers.

5.  If you want to stay with the company, you shoud NEVER do anything to damage it out of spite: closing accounts, calling the cops – that's just wrong.

6.  And you ALWAYS, not just read, but study every single legal document you sign.

Following the film's paradoxical leitmotif of an awkward kid creating the largest social network on this planet, the filmmakers suggest that Mark Zuckerberg pushed Mr. Saverin out of Facebook, because Eduardo got accepted into The Phoenix Club at Harvard.   

"You may say that I'm a dreamer," but I want to believe that Mr. Zuckerberg and people around him realized they have no use for someone who couldn't contribute into the exploding enterprise's development.  Just screaming all the time, "I'm the CFO," doesn't make you one.             

 

The Best Boss in Cinematic History


Ever since I started this blog, I have been searching my memory for a movie character who would exemplify the "ideal boss."  And I don't mean just some harmless person who stays out of your way.  Those are not good bosses – they don't bother you, but they don't improve your professional status either.  I mean a really-really good boss: someone who pays attention to his employees' progress, to their state of mind; someone who facilitates utilization of employees' potentials to the fullest; someone who goes out of his way for the sake of his subordinates' job satisfaction.

I know it is a mythical creature of Gandalf and Dumbledore proportions.  That's why I wasn't looking for real-life examples.  I have never met such a boss.  And even though I try very hard to be a decent manager myself, my professional existence is too erratic for following through with all good intentions.  Moviemakers, on the other hand, are in the business of creating larger-than-life characters that don't necessarily reflect reality, but provide for highly engaging and, in some rare cases, intellectually impactful experiences.  Look, Francis Ford Coppola and Mario Puzo gave us a myth of a person for whom honor, love for his wife and children, and fairness were the most important things in life – Vito Corleone.  Do people like that exist in real life?  Of course, not.

I love and know Cinema.  My tastes are very eclectic.  I don't go for the mainstream adventure crap of the Clash of the Titans type.  But, from Federico Fellini's Casanova to Mike Judge's Idiocracy, from Lars Von Trier's Dogville to Guy Ritchie's Snatch, if it's anywhere between good and brilliant, I saw it.  There are American and foreign directors whose filmography I can recite by heart.  I go to festivals and have an IFC membership.  Surely, I thought, I can come up with a character that fits my description of an ideal boss.

Alas, it was not easy and took me several months of periodic pondering.  But last week, it finally hit me.  Eurika!  I found him!  It's the San Franciso Police Department captain in So I Married an Axe Murderer wonderfully portrayed by the great Alan Arkin.  This guy not only notices that something is wrong with his employee, Charlie's friend, officer Tony Giardino (Anthony LaPaglia), but he actually listens to his complains.  Moreover, for the sake of raising his employee's morale, he goes out of his way and indulges Tony's fantasy.

Just watch (by the way, I am very grateful to whoever smoothly compiled this video, which actually consists of three separate clips from different parts of the movie).



 

Do bosses like that exist in real life?  No, but it's fun to watch and dream. 

   

Sloppy Accountant Steals From Lorne Michaels and Tina Fey


American+Museum+Natural+History+Hosts+Museum+MhOXuAo6hyZl Well, technically he stole from NBC Universal who bankrolls the production of 30 Rock, but Lorne Michaels and Tina Fey helm the show.  I guess, if it has something to do with the creator of Saturday Night Live and the show's former Head Writer, even the embezzlement case must have a bizarre skit flavor.

The media-released facts of this "grand" scam, which yielded the schmuck, formerly employed as an "accountant" on the show, a $13.6K "fortune" in stolen funds, are sketchy (pun is always intended), so I will have to apply my financial forensic expertise and speculate about some of the details. 

The way I see it, he caught on the fact that when expense reports/envelopes are submitted for reimbursement, nobody checks the actual receipts inside.  It is also possible that he was the very person responsible for checking them.  Either way, there were obvious holes in this internal control plot.  So, he decided to pad a few envelopes with fictional expenses, personal use of the business credit card and even altered receipts.  On top of that, he did it stupidly and sloppily: used whiteout to falsify the receipts, faked the NBC Comptroller's initials.  He thought nobody would ever notice. As far as he could see, from his limited to one season and inexperienced point of view (how do these people get employed?), nobody was looking.

Nobody in accounting management did!  Judging by the timing of his employment and arrest, it seems the independent auditors were the ones who discovered the receipts with the whiteout!!!  In a business with big-shot executive producers charging all kinds of perks (limos, flowers and whatnot) to corporate credit cards, the reconciliation of expense accounts is a sensitive area.  That's where diligent auditors would look.  And the SLOPPY WHITEOUT – how can anyone possibly miss that?

So, now he is facing up to 7 years in jail.  That's a year for every $2,000 he stole.  Pretty severe.  However, The Frustrated CFO is the most curious about the consequences of this ordeal for the NBC's Comptroller.   In my book she is ultimately responsible for the lack of proper internal control procedures and the inadequacy of the budget variance analysis.  If those functions were correctly established and executed, this small-time offense, blown out-of-proportion by its show-biz relation, would never have occurred in the first place.  Both her and the arrested one are sorry excuses for accountants.        

What was the perp's self-justification?  Did he think that "it was not fair" for Tina Fey to spend $200 a day in limo charges?  IMDb Pro reports her current 30 Rock salary at $300,000 per episode.  That must've killed him.

However, we are accountants, so let's count.  The show reportedly has 6 million viewers.  That's only in the US and doesn't count reruns or DVD sales. So, on the evening of each episode's airing Tina Fey makes 6 million people laugh and forget their worries.  (Please, appreciate my objectivity here as I personally don't find Tina Fey's comedy funny, intelligent or entertaining.)  And for that she gets paid 5 cents per person.   I think that's reasonable.  Who did that "accountant" make happy?