Category: Psychological and Behavioral Topics

CFO Folklore: Delusional Self-Involvement of Business Owners


Bee-catAs my readers know, years ago I've made a career choice of avoiding large corporations and their tall organizational structures.  I prefer small and mid-size companies allowing opportunities of direct interactions with business owners – the very people responsible for recognizing one's efforts and allotting rewards.  It's not for sissies, of course, because in this environment you cannot hide your incompetence or laziness in a mass of indistinguishable drones – you and your work are on the spot and in full view all the time. 

Even for a highly skilled professional with a strong work ethic it's not easy to be constantly exposed to this very special breed of people - the entrepreneurial bosses, who, God bless them, unwittingly provide me with endless writing material.  I guess it will be several years into my retirement (assuming I will live that long) before the urges to highlight this or that aspect of their psychology and behavior will ceise.

It's uncanny how many common characteristics are shared by private business owners.  For example, all of them operate under the same delusion that employees care (or should care) about their companies just as much and exactly in the same way as they themselves do.  It's especially amazing to me because most of them are pretty levelheaded and highly functional people, yet they insist on this deranged assumption that doesn't fit into any rational frame of thought.

For a business owner his company is his life's endeavor, his singular purpose, his channel of expression and fulfillment, his source of pride and wealth, his outlet of personal freedom.  The owner/CEO's opinion overrides everybody else's; he is the only one with a full authority to direct the company's development in any direction (to a success or to a downfall); ultimately he holds all employment strings in his hands; he can say or do whatever he wants (within the limits of the law, of course); nobody watches his time, assesses his performance, addresses his shortcomings.

On the other hand, for an employee, no matter how dedicated, loyal, hard-working, conscientious, and highly positioned, a job is just a job – a line on a resume.  It cannot possibly be anything else, because there is no such a thing as a job security anymore, no matter where you work.  If the current employment ends, there most likely will be another one after.  Nowadays, probably shifting down, but maybe shifting up - who knows?  There must be something, or there will be oblivion.  For many of us, a job is just a source of sustenance, not the means of self-satisfaction.  And when it comes to personal freedom… I already wrote about it four years ago (Bill of Rights in Small-Business Environment ).

Clearly owners and their employees are conditioned to look at the business from different platforms.  It is preposterous to assume equal attitudes from unequal parties.  Yet, the faulty presumption persists and is manifested by various business owners quite frequently.  I'm sure many of you have experienced it first-hand. 

On the rare occasions, when opportunities to be frank present themselves, I try to explain to CEOs that their employees have their own individual life agendas: what's good for you, your business, and your pocket, Mr. Boss, is not necessarily all that important to them.  Sometimes I even draw Maslow's Hierarchy of Needs:  you see, I say, you cannot expect them to be proud of working in your wonderful growing company if they cannot make ends meet and feel overworked. 

Agh, it's no use!  Just the other week I was discussing (via email) with one of my clients, whose company made the 2013 Inc. 5000 list of the fastest growing companies in the nation, whether I should enter them into consideration this year as well.  It's my assessment that the negative outcome (everyone was complaining about the endless solicitation calls from various service companies) outweighed the pleasurable, yet hard to measure, positive impact of the resulted publicity.  He had no rebuttal to that particular argument.  Instead, he replied to me with the following:

"The ranking is something about which we can all be proud, and which thereby directly affects the morale of our staff, who both see results of their hard work translated into an accolade and have the pleasure of working for a company that has been honored.  I know I bathed in the warm glow of the company's recognition."

Of course he did!  It's his company.  He is rightfully entitled to tell about it every single person he meets.  But can you believe the gall?  They "have the pleasure…"!  Seriously?  Even the ones with $40K salaries and one-week-a-year vacations?  Uh-uh, Mr. Boss, the pleasure is all yours. 

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.

Tech-Savvy CFO vs. Technologically Inept Owners: A Boardroom Chronicle


OstrichPremise:  

Based on true facts, this present-day farce unfolded right after the company at the center of the story signed a new office lease.  The entity's CEO, an infamous procrastinator and a successful decision-dodger, has delayed the execution of the document to the point when only 60 days remained before the moving-in day.

Up until now, the fairly young business always occupied a full-service furnished office suite, where everything from pen holders to receptionists is supplied by the landlord, including all telecommunications and IT administration.  However, by this point the successful business outgrew the little rooms and the shared common space of the suites – it was time for the company to obtain its own residence.

As all logical people know, lease signing is only the beginning of a relocation process.  A lot of work needs to be done before a company can feel at home and be fully operational in its new place of business.  And nowadays, the IT infrastructure becomes a prerequisite to everything else.

This flat-structured small business has a misfortune of having a board of directors that consists of three technologically clueless owners (the type who cannot connect a printer to a PC) and a CFO.  The latter has been combining her financial and accounting responsibilities with those of a CTO throughout her entire career.  Needless to say, she understands what needs to be done, knows how to go about it (nobody else does in this company), and is more than qualified to make all necessary decisions.  Yet, the Board has a rule: anything that involves spending money must be approved by all four members.

So, here is the chronology of making a single decision under the described circumstances:

Motion 1 – 60 days till D-Day.  Upon receiving the fully executed lease from the lawyers, the CFO writes an eMemo to the owners requesting a Board meeting in order to develop an action plan that would ensure successful and painless relocation.  The plan should assign responsible parties and establish deadlines for each task.

The owners don't acknowledge that the issue was raised and two weeks pass in a complete silence regarding this matter.

(Side Note: All four executives are actually heavily involved in their day-to-day responsibilities.  They communicate extensively every day discussing various commercial concerns, while avoiding difficult extraordinary topics.)

Motion 2 – 46 days till D-Day.  Recognizing that the owners have fallen into their typical pattern of pretending that the problem doesn't exist (this happens every time an issue lies outside of their comfort zone), the CFO makes another attempt to mobilize the Board to set up an action plan.  This time she speaks to each of them in person.  They all nod in agreement - "Tomorrow," they say.  The CFO squeezes a two-hour time slot into her crazy schedule.

Three days pass without anything happening. 

Motion 3 – 43 days till D-Day.  The CFO feels the time pressure – at the very least she must start working on IT components, regardless of the owners' ostrich behavior.  The business will be simply paralyzed without an adequate infrastructure.  She really has no room in her schedule for all research, comparison, and optimization of  various ISPs, telecoms, and IT administrators…  But who else is going to do it?  So, instead of pestering the owners again about the "action plan," she writes a very specific inquiry:  "Please confirm your agreement with my taking charge of the groundwork for obtaining the Internet service, telephony, and IT administration support."  Without waiting for replies, the CFO starts working on the subject of the highest priority, i.e. the Internet connection, by reviewing nine ISPs whose services are available in the new building.    

Motion 4 – 41 days till D-Day.  At different hours, the CFO receives messages from the owners – all three are worded very similarly: "Thank you for asking and forward thinking.  Please go ahead with the projects." She can almost hear their sighs of relief - somebody else has made the decisions for them!!!  The CFO closes her eyes for a second and thinks, "The same shit every time.  I wish at least once I would let things run their course - just to see what would happen if I didn't worry about all of this, if I didn't jump in."

By carving little chunks of time in her schedule to deal with this shit, the CFO manages to come to her final ISP conclusion in 5 business days: to accommodate all of the  company's needs (including VoIP) she needs a reliable fiber-optics broadband.  She narrows down her choices to two ISPs – the award-winning Cogent with dedicated connectivity and Verizon's newest product FiOS Quantum ran through communal cables shared with all other users in the vicinity. 

Motion 5 – 36 days till D-Day.  She immediately gets quotes from both: Cogent values itself highly – $700/month with a three-year contract, plus $1,000 installation fees; Verizon's rate is only $129/month with a two-year contract.  Even with such a disparity in pricing, it's a simple choice as far as the CFO is concerned – she knows that Cogent will provide uber-fast, uninterrupted connection, and if something happens, she can be on the phone with an engineer within 30 seconds.  Verizon, on the other hand…  well, we all dealt with Verizon at one point or another.  Yet, for the owners all this technical staff is as difficult as Icelandic; the huge price difference, however, that's easy.   So, the CFO goes back to Cogent's salesperson and dangles FiOS Quantum at $129/month in front of his nose (virtually, of course).  He is taken aback – he had no clue that Verizon had started offering this brand new service in that building.  He cannot stop himself from uttering, "That's a compelling alternative."  The CFO doesn't dissuade him from this train of thought; she waits.  And he says that he would go to his director and try to get her a better deal.

Motion 6 – Same Day. Cogent wants the business – the salesperson reverts in two hours, dropping the price to $500/month with a three-year contract or $400/month with a four-year contract.  Both rates are exclusive of taxes and charges.  With this reduction in hand, the CFO immediately prepares a presentation for the Board, breaking down her selection process step-by-step and making a strong case for Cogent through detailed comparison and scoring of all providers.  She sends it out to the three owners and requests a board meeting to make the final decision.

Four days of silence passes.  The CFO understands: it's too fucking much for them, they don't want to deal with this, they are hiding.

Motion 7 – 32 days till D-Day. The CFO has no choice but to write to the owners again: "Let me remind you that installing the Internet connection must precede all other IT and telecommunication actions, including setting up the phone system, the computer network, etc. – basically everything that we need for the business's operations.  And it will not happen overnight!"  This gets CEO's attention.  She comes over to the CFO's office and says, "Let's decide by tomorrow the latest."

Two days passes.

Motion 8 – 30 days till D-Day.  One of the owners (already in possession of the previously distributed detailed presentation) sends an inquiry, "Can you make a comparison for me between Cogent and Verizon?" as if he just woke up to the issue. 

Motion 9 – Same Day.  The CFO prepares a simplified comparison chart intended for a 4-year-old audience.  Meanwhile, she tells Cogent that the decision is not settled yet and that she will appreciate if the provider gives up something else – like do away with the $1,000 installation fees and make rates flat, all-inclusive (taxes, charges, etc.)  The salesperson conferences in his Director and they yield.  The CFO simply cannot lose this deal: she goes around and collects the owners' consents in person. 

Motion 10 – 29 days till D-Day.  The CFO signs the contract with Cogent.

Curtains 

And this is just Act I.  Ahead, there are still decisions on a VoIP system, an IT Administration service, furniture, equipment… 

CFO Folklore: The Illusion of Irreplaceability


Orange-is-the-new-blackThis is what always happens with severely responsible and talented people who take pride in the quality of their work and apply themselves hard, regardless of the rewards and recognition, material or otherwise: They do an extraordinary job in every function they are assigned, they show initiative and undertake tasks beyond their scope of responsibility, they set their own lofty goals and high performance standards, they pull off feats of creativity and miracles of ingenuity.  Truly they accomplish things that no one else would in their place. 

More frequently than not they don't run around screaming about their achievements – after all, they simply cannot operate any other way and they don't care that nobody asked them to be like that.  They themselves know that they are the best.  Plus, people around them acknowledge such efforts in one way or another – subordinates show respect, peers get testy, etc.  And the bosses?  They either don't notice anything, because their heads are usually up their asses, or they are too limited to appreciate the ace-level pilotage they are witnessing. 

As someone afflicted by this condition, I can assert that there is nothing healthy about it.  Privately wallowing in the knowledge that you are "simply the best" and that your work ethic is a cut above everyone else's, while not being adequately rewarded for your efforts, is nothing more than an addiction to one's own ego. It's vanity of the worst kind, because it violates the principles of objectivism and merit-based recognition.  And, like any addiction, it is accompanied by a couple of supplemental attributes. 

One of them is the inevitable development of passive-aggressive behavior: no matter how many times a person is going to say that she does it for the sake of her own self-satisfaction, something deep inside wants to be celebrated for the extraordinary abilities, efforts, and results.  This secret desire is in a constant fight with an extreme dislike of boasting.  Thus, the feelings and impulses get mostly suppressed and come out in the form of classic indirect hostility and resentment.

Another attribute is the illusion of irreplaceability.  The tormented crazies convince themselves that without them the company will not be able to survive; that everything will fall apart and go to hell.  They believe that there is no way somebody else could be found to fill their shoes.  And why not?  Nowadays, people like that are quite rare.  It's most likely that, if an employee in question leaves on her own accord or is let go for some reason (because she becomes unaffordable or her attitude becomes unbearable), the employer will never ever have someone that good in the same position.  But does it really mean that losing these truly invaluable workers is an incurable disaster?  Are they really irreplaceable? Let me answer this question by doing what I frequently do – relating the readers to an example from popular culture. 

In case you have not had a chance to check out the Netflix/Lionsgate's co-production Orange Is the New Black, I urge you to do so – trust me, you will not regret it.  The show's creator, Jenji Kohan (widely known for her Showtime offspring, Weeds), is a member of a still rare breed of entertainment developers, who is able to focus on female characters without reducing the finished product to gender-specific genres.  Orange is the New Black takes place in a women's federal prison, and its ratio of male to female characters is about 1:10.  Yet, 47% of IMDb users who rated Orange is the New Black (8.5 stars overall) were males.

One of the primary characters in the first season of the show is an inmate of Russian origin, Galina "Red" Reznikov (Kate Mulgrew).  This formidable woman runs… no, she rules the prison's kitchen and has an influence on pretty much the entire social canvas of the place.  By the show's start she has apparently been there for years and assumed a role of a Godmother for a tight circle of her "daughters."  She can be a real bitch, and a newbie should think twice before contradicting her.  But the truth is she is doing a remarkable job, keeping her fellow convicts and the staff fed and even rewarded with treats under the conditions of ever-shrinking budget, broken fridge, and oppressive hostility from some nasty guards.  As early as the 5th episode, it is impossible for the audience to imagine the kitchen without Red.  Obviously, she herself thinks she is irreplaceable.

Guess what?  Towards the end of the season, the combination of some people's foolishness and others' unsavory scheming gets her kicked off the throne and out of the kitchen.  So, what happens?  Do the lights go out in the mess hall forever?  Do the prisoners get shipped to another facility to be fed?  Nah ah!  Another head cook is found right there in the general population and installed in front of the range; she brings in her own crew; the cooking continues somehow.  True, there are no more yogurt favors, the menu is severely skewed towards Latin-American cuisine, and even the oatmeal comes out spicy.  But the plates are not empty, people are not starving.  Life goes on, while Red is driving herself insane with displacement anger.        

So, the answer to the above question is: No, you are not irreplaceable.  It may take a whole team of less adequate and more expensive people to pick up your tasks.  And collectively they will accomplish less and it will not be brilliant, but it will be just good enough for the business to continue, at least in the short run.  Let me assure you that nothing will fall apart, because doing things half-assed and with little care has become a widespread norm.  Everyone accepts poor quality at a higher cost nowadays, and so will your bosses.  And you, with your talents, skills and unsolicited attempts to jump over the high-standard bars, are just an ego freak.      

The Knee-Jerk Reaction to KPI’s Showing a Loss


Ren-and-stimpyI fucking LOVE how every time you give small business owners, who are usually personally responsible for commercial side of the business, bad news about the company's performance (i.e. report losses), the first thing they do is start looking for faults in accounting instead of strategically correcting their own buying/selling practices.

"Are you sure no extra/double costs were somehow recorded by accident?"

What the fuck is that even supposed to mean?  And yes, I am fucking sure!  I've only been doing this shit for 25 years!!  You, on the other hand, found out that accounting exists only 2 years ago, and I was the one who told you!!!

The same shit – company, after company, after company…  It's like a fucking natural instinct – the goddamn knee jerk.