Category: Professional Recommendations

Big Picture and Staff Training


Closely-held entrepreneurial companies always have some flair of secrecy.  The Owners' lives are intertwined with the businesses and because of that they apply personal privacy rights to everything, including the company's commercial and organizational matters.  This frequently leads to "need-to-know-only" modus operandi when dealing with employees. 

CFOs, Controllers, Directors of Finance are expected to act in the same secretive manner.  And I am not talking about non-disclosure of commercial secrets, compensation details, or owners withholdings – these matters are confidential by definition.  I am talking about organizational structure, commercial partnerships, new financial relationships, transactional details, new venture plans, etc.

The owners who insist on such covertness make a mistake of disregarding the natural human instinct of their employees to fill in the blanks.  In the absence of actual information they will cook up their own assumptions about concealed matters. 

You wouldn't believe what kind of wild baseless fantasies I sometimes uncover: non-existing silent partners, astronomical sales volumes, mythical lines of side business.  In one of my previous employments people even assumed that I was a member of the owner's family on account of my loyalty and strict work ethics. 

That's just laughable, but there are far more serious impacts of secretiveness: people don't understand the mission of the organization, the commercial scope, the structure, the value chain.  Most importantly, they cannot grasp their own place and relevance in the system.       

The unfortunate effect of this disconnect is mechanistic disinterested performance instead of meaningful work.  On one hand, the bosses insist that their employees are kept in the dark, and on the other hand, they would like to see high efficiency and productivity – impossible to coexist.

I have managed to convince most of bosses that while keeping the actual confidential information secret, it is absolutely crucial to provide my subordinates with the Big Picture and their place in it.  I consider this to be the most important step in staff training and development.  You will be wasting your time trying to teach your employees how to apply their expertise and education to the tasks you need them to perform if they don't know why these tasks are important for the company's, and consequently, their own prosperity.

When explaining their role and place in the Big Picture, I frequently tell the employees that the company doesn't employ them to pay salaries.  It is actually other way around: if the company could operate without the employees jobs done, we would gladly do so and save the money we pay as compensation . But it is crucial for the company that the jobs are done well and that is why the employees are retained and paid.  You will be surprised: it is not as clear to most people as you could expect.

Job Search: Is Industry Experience Really Relevant?


All of us have encountered this many times over – you read a job posting for a CFO or Controller position (this is particularly true about recruitment agencies' ads) and the responsibilities list is a perfect match to your experience: you've done budgeting, forecasting, treasury management, BOD reporting; you've designed KPI's and dashboards; you've managed and trained staff, etc…  Then, you get to the end and among mandatory qualifications you see: real estate experience (or broker/dealer, or manufacturing, or consumer products… whatever) "is a must."

Why?  Do hiring execs and managers think that there are some cult secrets separating one industry's accounting and finance from another?  That you can only absorb them through exclusive involvement with that industry's firms? That no one with  deep knowledge of fundamental principles of finance, GAAP, taxation etc. can adapt them to a new industry and quickly digest the technical specifics? 

And wouldn't they be more interested in hiring someone sophisticated enough to be willing and capable of diversifying their experience?  Do they really think that someone who knows Revenue Recognition Cycle in Technology will not be able to dissect standards for the same task in Financial Services? 

I can go on forever with these questions, but I guess you get my point: I don't think that industry experience is relevant for REAL CFO's and Controllers – those who possess broad and deep knowledge of accounting and finance, not just few repetitious tricks they have learned without understanding the underlying principles behind them.

Let me give you a simple analogy.  Multi-lingual children exposed to different languages through their residence, parental ethnicity, foreign nannies, etc. are known to add more and more languages to their arsenal with a greater success than their peers.  The reason is that their anatomical speech instruments become very flexible and can adapt to any new challenges.

The same is true about the professional expertise of those financial execs who were exposed throughout their career to a variety of industrial and organizational specifics.  They usually have deeper understanding of business, sharper commercial acumen and ability to adapt them to any new circumstances.

In yet another excerpt from Marc Cenedella's TheLadders book (Sell Yourself Short), he condecsends that recruiters are now more open to industry crossovers, but that you will have to accept lower salaries and positions. 

First of all, the supposed "openness" is a lie: the job listings are full of specific industry requirements.  Secondly, don't let statements like that lower your self-esteem: if you are capable to cross over without difficulties, it's your asset, not a shortcoming.

Let's not forget that the system of double-bookkeeping (still the foundation of all accounting the last time I checked) was created by the XIV century Venetian sea merchants and first outlined in proper structural manner by Benedetto Cotrugli around 1450 as a chapter in his "Of Trading and the Perfect Trader."  Subsequently, Lucas Bartolomes Pacioli devoted 36 chapters to the subject in his monumental tretese on mathematics.  

These were Renaissance men who also wrote on architecture, medicine, law, art, religion and broad business issues.  It is unfortunate that the employers of today have devolved to preferring the narrow specialization instead.


   

Time Organization as Anti-Frustration Tool


Business strategy, financial plans, cash flow projections – obvious tasks in any CFO or Controller's routine.  These functions are integral parts of our job descriptions and inability to perform them would simply disqualify us as senior financial professionals.  No matter how sophisticated, at the end of the day they have to do with allocating limited resources over specified periods of time. 

Well, what about our very own personal intellectual resources? Are all of us capable to allocate them in an efficient manner?

Practically every single employer (in subconscious recognition of the responsibilities scroll's heftiness) feels obligated to mention multi-tasking, work-under-pressure, and tight-deadlines in their job ads for financial execs.  And yet, nobody ever asks during interviews about the candidates' actual time-management skills. 

It is very flattering to our professional class that bosses simply assume their present and future CFO's and Controllers to have their own self-organizing tools, but the sad truth is very few of them do.  They consistently spend long hours on a single task, while the day runs away from them leaving huge volume of unattended work behind, which over time may pile up into a mountain.  And it applies to other execs as well, but I don't care about their well-being in the context of this blog. 

To my fellow financial professionals in the small and mid-size companies, however,  I want to say three words: schedules, lists and schedules.  Yes, schedules two times – short-term and long-term.  I have briefly mentioned scheduling before in my post on prioritization (The Importance of Prioritization for CFOs and Controllers), but this topic is never exhausted. 

I want to emphasize that the value of time organization lies not only in the increased professional efficiency but, more importantly, in its ability to reduce job-related frustration and anxiety.  Schedules and lists create a framework for your multi-tasking and provide you with stability of a clear action plan.  They especially help those prone to experience anxiety about forgetting the "back burner" projects. 

Once the need for self-organizing tools is recognized, you will be capable to design your own.  And I believe that it is important for every CFO, Controller, etc. to develop their individual practical schedules and lists based on their actual business circumstances and preferences.

Just as a reference point let me share that, at the very minimum, I usually have the following lists: (1) functional breakdown of departments with tasks assigned to each group/person and their time frames;  (2) a list of mandatory daily functions; (3) a list of periodic reports with fixed dates, responsible parties and intended recipients (weekly, monthly, quarterly, annual); (4) a long-term list with projects that are not crucial to immediate commercial goals, but are necessary to bring the company to the next level, with tentative start dates.

Accordingly, at any given moment I have four schedules: (1) today's schedule, which I usually prepare previous night; (2) current and next weeks outlines; (3) current and next months highlights; (4) tentative 4-month plan.   

I would like to emphasize that FLEXIBILITY is a key: don't let yourself to be trapped into an obsessive rigidity.  Changes and diversions are to be expected and there is no reason to get worked up about them – after all, we live in a very fast-changing business world.

 


 

       

Valuable Advice by HR Capitalist


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.

Leadership Means You Cut Out the Negative Body Language… 

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.