Peers – Page 2 – The Frustrated CFO

Politics & Promotions: Gil Grissom vs. Conrad Ecklie

I cannot really call myself a CSI fan. I think in eleven years they've released over 250 episodes (!) and I watched maybe 25 or so. It was enough to familiarize myself with the protagonists and even the first level of secondary characters. Their dynamics piqued my interest.

After all, the Crime Lab is a workplace and many actors on the show portray co-workers. Even though they are government employees, the operational localization makes CSI and the human conflicts within similar to a small business.

One antagonistic relationship between two characters I consider archetypal. It is applicable to any workplace. I am talking about professional devotion vs. careerism as represented by graveyard shift supervisor Gil Grissom on one side and Conrad Ecklie on the other side.

It is not that Ecklie is a complete professional failure or a wicked person. Not the sharpest pencil in the box or the most advanced scientist around, he is good enough. He is spiteful, but not diabolically evil. He puts all animosity aside when Nick Stokes is in trouble (in the episode conceived and directed by Quentin Tarantino). Still, his priorities are clear and they have nothing to do with being the best at what he does. His ambitions are all about getting ahead in the organizational structure, and he will do whatever it takes to achieve that.

On the other hand, Grissom is a brilliant scholar whose life's purpose is to never stop learning. The puzzle of crime investigation is his passion. His rise to the shift supervisor position had occurred without his doing anything but the best job he could.

In one of the episodes I've seen, this exchange between the two took place:

Ecklie: "You kept the sheriff out of the loop, that's a career killer."

Grissom: "That's your problem, Eckley, you view it as a career."

And that says it all. So, what happens?

Ecklie consistently rises from dayshift supervisor, to Assistant Director to the Undersheriff of LVPD. Grissom, even though a PhD and a star in his field, holds the same title leading his team until he retires and goes to Paris to teach in Sorbonne.

Obviously, I feel very strongly about this issue – I despise self-promoting careerists who climb up the ranks not because they are the best at what they do, but because they don't step on anyone's toes and know which ass to kiss at the right moment. You, with all your knowledge, intellect and diligence have no chance against them. If promotions and bigger salaries are rewards and it's the mediocre Ecklies who succeed, it means that the merit based system fails.

Whatever was the real reason for William Petersen's departure from the show, the viewers are to believe that Grissom is happier now. But he did leave the job, to which he devoted a big chunk of his life. And so did I – at one point in my career I left a job I liked because someone else undeservedly got ahead of me. It wasn't easy.

Ten Reasons Why “CFO Techniques” Is a Must-Read for Small-Business CFOs

Reason #1.

"CFO Techniques" was NOT written from an academic perspective, such as of a typical university professor with a consulting-for-large-business on the side.

On the contrary, it WAS WRITTEN by your fellow CFO, who earned her professional stripes in the small-business trenches. During more than 20 years of this hands-on experience, with the last 18 in CFO and Controller positions, she was fortunate to gain exposure to all facets of financial management and organizational administration. Just like the most of you, she knows only too well what it means to wear many hats at the same time.

Reason #2.

Yet, the author did not loose a constructive touch of a theoretician. In writing the book, she employed her:

in-depth knowledge of the fundamental principles that govern all areas of corporate accounting and finance,
methodical approach to all tasks that compile ever-expanding scope of a CFO's responsibilities,
and ability to dissect the cause and effect relationships of various concepts.

The result is the crystallization of the vast experience into a streamlined functional system, easily adaptable to various types of businesses and industries.

Reason #3.

"CFO Techniques" doesn't try to rehash official regulations, statistical information, bits of hot technology news, results of narrow studies, and such. The book's mission is to spotlight the most important areas of a CFO's or a controller's functionality:

Reason #4.

These professional cornerstones are broken down into crucial components described in bite-size, easily digestible chapters written in a fun and lithe language. The book presents the most complex financial and accounting concepts in comprehensive forms, which can serve as introductory aids for those who just attained their first controllership appointment and as concise refreshers for seasoned professionals.

Reason #5.

It is an unfortunate truth that millions of small businesses struggle (and frequently fail) to survive not because they are neglected by owners and managers, but because these hard-working people simply have no clue what exactly is wrong with their companies, where are the weakest points, which areas require immediate improvements. Smaller enterprises suffer the most from the lack, even complete absence, of business intelligence and performance analytics. "CFO Techniques" is a part of the author's personal crusade to help small and mid-size businesses by providing them with survival tools (analytical, budgetary, procedural, etc.) that don't require expensive and complicated software.

Figure 25-1

Reason #6.

One of the most unique and valuable devices offered within the book is the proprietary chart

INCOTERMS FOR ACCOUNTANTS.

Originally developed by Eclectic & Dynamic Controllership Consulting (E&D CC) specifically for businesses involved in buying and selling goods, it expands the definitions of standard Incoterms to include such accounting notions as title transfer rules and description of applicable source documents, thus accommodating needs of proper revenue, COGS, and inventory recognition.

Reason #7.

One of the main underlying themes of the book is the necessity for small-business CFO's and controllers to raise themselves above the bean-counting stereotype and become critical thinkers, indispensable members of the executive management team. "CFO Techniques" emphasizes this pressing demand throughout every section and accentuates the tasks that may facilitate such transformation.

Reason #8.

While shedding new light on the day-to-day routines and spinning conventional accounting and finance tasks as crucial and indispensable cogs in the business machine, the author's functional system gives equal rights to new categories of CFOs responsibilities, such as company-wide Information Technology Management, Risk Control, and Strategic Planning.

Reason #9.

The book takes a holistic approach to multi-faceted positions of CFOs and controllers and supplements specific structural guidelines and practical functional advices with discussions of more general topics applicable to any senior professional operating in private-business environment. Among others, it includes observations and suggestions on how to deal with people on different level of corporate hierarchy and what changes to expect in your future, even if at the moment you feel 100% secure.

Reason #10.

Even if you don't learn anything new, or if you'll find the book not applicable to your specific professional niche, at the very least you can entertain yourself with the multitude of eclectic cultural references and business insights from the author's personal experience woven through the book's text.

Audit Season Woes

As a corporate controller, CFO, and consultant, I've been on auditees' side of the table for the past 20 years. Yet, I still remember the gratifying excitement of coming to a company as an auditor and testing the depth of my expert knowledge in an unfamiliar territory, quickly absorbing the business's specifics and immediately identifying the scope of testing. Well, Ok, I've been called a "show-off" and "know-it-all" many times, so forget me. Over the years, there were other public accounting professionals (not many, but some), who impressed me with their knowledge and sharpness, but it doesn't happen anymore.

I've been complaining about the decline of the quality of work across all jobs, from customer service representatives on the phone to the cardiologists in fancy hospitals, for years. But somehow I still get very frustrated when I encounter the same trend in my own profession. I cannot even explain why. After all, I am very conscious of the managerial accountants' limitations. The main reason for writing "CFO Techniques" was the desire to fill their knowledge gaps. Just a few weeks ago I wrote about The Unimaginable Abyss of Accounting Ignorance in the small-business environment. So, I should not be surprised when I am faced with the same situation while dealing with financial auditors. Nevertheless, it still gets me.

It's audit season, so in the past couple of weeks I've been helping my client (a young company) to go through their very first independent year-end examination of books and records. It's conducted by a small CPA firm hired before my consulting engagement commenced.

Under my guidance, the client's accountants did what I always advise to do in preparation for an audit (see Chapter 30, What Guarantees Fast and Painless Audit, in "CFO Techniques"), i.e. they loaded the appointed auditor in advance with statements and schedules of data required to make all testing decisions. He definitely had time to prepare well.

The client is an importer of raw materials. So, the revenue/cost recognition and cut-off tests are very important. Accordingly, the auditor gives a list of sales and purchases he wants to test. We provide all supporting documents to verify the propriety and accuracy of each transaction. After a little while the auditor knocks on my door with a bunch of papers in his hands. "How do I know," he asks timidly, "if these invoices have correct dates?"

Inside my head I scream, "Are you fucking kidding me?" But this is not about my frustration, this is about my client. So, I calmly explain that he needs to compare the recording dates with the source documents proving the product's ownership transfer as defined by Incoterms. I go further and demonstrate with one of the selected items: this sales order states CIF (cost, insurance, freight), which means that the customer owns the product as soon as it's loaded on the transport; hence, your source document is the Bill of Lading (BL) attached right here to the Commercial Invoice and the Packing List; the BL's date is the sale's date.

He soon comes back with another file and he is very apologetic, "I am sorry, could you explain this to me again? I never heard of those… terms… before. What did you call them?" I help him out, "Incoterms?"

Will somebody, please, explain to me, since when it's Ok for an auditor, who is responsible to lenders, investors, and other outside users to verify the correctness of books and records, to come to the client without the full knowledge required to perform his tasks? Why is he not even embarrassed to admit that? Why the hell in 2012 it did not occur to him to get his ass onto the world wide web, as soon as he heard the word "Incoterms" from me, and study them?

I guess, that would be too much to ask. Hey, he didn't even know what a "metric ton" was and asked me for the ton-to-pound conversion ratio instead of finding it by himself. He continued coming over, I continued providing him with definitions and rules. At some point he got so comfortable with this teacher-student setup, he even asked my advice on how to "test for prepaid expenses." Seriously? Did he forget that I was their from the client's side, essentially being audited?

And here I have to bring up my book again. There is Chapter 29 in "CFO Techniques" called Choose Your Auditors Wisely… Dear business owners, CEOs, CFOs, and controllers, please, read it if you want to avoid paying $25,000 – $100,000 (average range for small businesses) for low-quality accounting services.

What If You Don’t Look the Part?

Ah, December! The month of office parties and corporate gatherings. Small or large, every company feels obligated to do something: sandwiches from a nearby deli with soda in plastic cups, or formal cocktails and fancy dinners – whatever fits the budget (frequently, way over budget).

On Monday I had to take part in my client's festivities. The company is small, but has a lot of external relations (bankers, financiers, big-time suppliers, shippers, brokers, lawyers, consultants). So, the gathering turned out to be pretty significant. As their acting CFO I am viewed as an insider and, therefore, was placed at the head of the "finance and legal" table. Funny! Other tables – operations, logistics, etc. were vividly mixed-gendered. At my table – I was the only woman.

"But no matter, no matter!" As all of us – females of corporate finance, I've been working in the predominantly testosterone environment my entire career. I know how men operate and expect them eventually, after obligatory discussions of each other's success, politics, economy, and the stock market, to fall into a football patter. And even though I myself find basketball and tennis far more exciting (and, as my readers know, prefer arts altogether), I am ready. It's not really that difficult – here, in NYC, they are predominantly Giants' fans. All it takes is to remember few key names and events, and they feel like you are "one of the boys."

So, here we are, in the third hour of the event, with enough liquor in all of them to knock a team of stevedores to the ground (ever since the martini lunches have become their industry's long-gone past, the thirsty bankers make up for them in the evenings), when the Giants sneak their way into the conversation. Only this time around, there is a twist – a politely contained and quiet tiff erupts over Eli Manning.

You see, there is this guy, second from me on the left, in his early sixties, who looks like the Nazi who got the scepter's head burnt into his palm in "Raiders of the Lost Ark." Only 30 minutes ago he said that the best presidential candidate right now was Michele Bachmann, which made me bit my tongue so hard to prevent a spontaneous response, I bled a little in my mouth. Now he is arguing with other neighboring boys, telling them how much he hates Eli, and the way he sits on the side, and his smile, and his hat, etc., etc. The fact that he is one of the only three Giants' players ever to be named a Super Bowl MVP apparently means nothing.

Let me tell you, I don't really give a rat's ass about either of the Manning brothers. It's the underlying principle that's important to me. So, I look the man in the eyes through his round glasses and say, "Many conservative men don't like Eli Manning, because he looks like a goofy high-schooler." "Yes, and that stupid grin of his," says the man. And I say, "But that look, and that grin, and that hat – they have nothing to do with his performance on the field." The conversation ended right then and there.

More than a year ago, I finished my post "He Looks Like an Accountant…" by saying that young crowd at rock concerts don't believe that I am a career CFO. The truth is that, unless I am introduced as one, nobody ever guesses it. Moreover, there is always an element of surprise in people's reaction, when they learn about my profession. It doesn't matter that I am very good at it and have a book on the subject coming out, I don't come off as "corporate finance," at least not by American standards. I am not tall, not skinny; I don't have the fake gloss all over me. And that crazy hair I could never tame! I am acutely aware of this discrepancy with people's expectations. That's why "CFO Techniques" doesn't have my picture on the back cover – I don't want to confuse people.

Self-Deprecating Ageism, or Impressions From Tool Concert

When iconic bands like Tool go on tours the good tickets land onto scalping sites almost instantaneously. Well, a middle-aged CFO with uber-eclectic cultural tastes is used to it: the same is true for Radiohead, Kanye West, The Cure, Wilco, Florence and the Machine, etc., and The Met charges scalping prices in its own box office. The biggest concern is handling the crowd: you want to be on the floor, but you are too old to fight off the crashing violent tendencies and the crowd-surfing of the young fans. It's fine to be in the front row of the GA pit at the Radiohead concert as there is no pushing and shoving, but the Tool audience may get carried away in the pit.

So, when fate brings an assigned-seat concert (the audience rocks standing close to their ticketed seats) and as near as East Rutherford, NJ (Tool have not given a full performance in NYC since 2006), you thank the blessed benefactor for the floor tickets and go. After all, who knows if you can summon the courage for the next time.

I guess, the front-man, Mr. Maynard James Keenan, who is mere 3 years younger than me, for a hot second felt middle-aged as well. The sentiment was rather of the nostalgic than the physical nature: he looked as robust as ever and his voice did not loose an iota of its incredible beauty and strength. But this is what happens: you get to a place and a memory of seeing Van Halen there 25 years ago hits you – fuck, I've been alive for quite some time already.

So, Maynard addressed the audience as if it consisted 100% of younglings born before his experience of the band with the most #1 hits on the Billboard Mainstream Rock chart. This was absolutely unjustified – to my quick eye the distribution of attendees was pretty much even over a broad spectrum of age groups, from 19 to mid-50's, with slightly higher density of late 20s to early 30s. But as I said, he felt like it, so he promised us that the band will "try" to perform some tracks that they have not touched for some time… as long as they "don't forget" what they are supposed to do, because they "are old". "So," he said, "if you see us wondering away in search of mashed potatoes…"

This made me laugh. Not because it was funny (Maynard is capable of better jokes), but because it reminded of me of myself always telling younger people how "the most brilliant I've ever been was at the age of 25-27, when I was writing my dissertation," and how "I used to have a near-photographic memory, but it's not the same anymore," and how "when you get older, the expertise replaces originality," and so on and so forth.

Pretty much the same coquettish crap that Maynard was trying to feed us right before him and his band-mates pulled off a set to die for, a performance one can never forget (there was a woman next to us who said that she saw Tool eighteen times and this was THE BEST CONCERT EVER!). Indeed, they were rocking like fucking hell, testing the reality and the nature of humanity with their existential lyrics and mind-blowing visuals. Their force transcended all ages; the generations converged and disappeared, chanting in unison the haunting lyrics of "Forty-six & 2" and "Aenema."

You know what? We, boys and girls born in the 60s, the so-called Generation X – the first generation conceived with The Beatles and The Stones playing in the background, potty-trained with the Pink Floyd's accompaniment and hit over the head by puberty while Led Zeppelin was hitting the Big Time, we should really stop this self-deprecating bullshit.

Nobody bought Maynard's "old-age" tirade, just like nobody buys my "I am not the same" crap. I just wrote a book full of novel ideas, I still enter companies and within a few weeks uncover their weaknesses, embarking on solving their problems and quickly coming up with solutions.

Is anybody going to think of Quentin Tarantino (1963) or Richard Linklater (1960) as "middle-aged" directors? How about Eddie Vedder (1964) or Thom Yorke (1968), would we qualify them as "middle-aged" rockers? If the beloved Kurt Cobain (1967) did not act on his disdain for human existence and kill himself at the age of 27, would we think of him as "old" now? C'mon, his fucking widow (1964) still acts like a juvenile delinquent. I can go on and on.

For better or worth, we are made differently. We count our years and we think, "Oh, I should be changing," but we are not getting "old" and we don't want to. And I don't think we will. 25 years from now, if the world is still in one piece, I intend to be at a Tool concert and expect Maynard to rock his hardest ever.

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